Your job costs and your books should be one system.
Most builders keep job numbers in one tool and the books in another, joined by a sync. Where the two drift, what it costs, and why one ledger beats two.
Almost every residential builder we visit keeps two sets of numbers. The job numbers live in the project management tool: budget, committed costs, change orders, draws. The real numbers live in the accounting package: what was actually billed, paid and deposited.
The two are supposed to agree. They are connected by a sync, or by a bookkeeper who re-enters what the sync missed. Most months they are close. Close is the problem.
Where two sets of numbers drift
The drift is not random. It shows up in the same four places.
- Change orders. The homeowner approves a $14,000 upgrade on site on Tuesday. The PM tool has it Tuesday. The books get it when someone remembers, sometimes after the next draw went out at the old contract amount.
- Sub invoices. The framer’s bill is entered in accounting against a vendor, but not against the job and cost code in the PM tool. The job looks under budget until it suddenly isn’t.
- Allowances. The selection goes over the allowance. The overage is tracked in one system and billed from the other. We wrote about how that goes wrong in custom home builds fail in selections.
- The sync itself. A renamed customer, a deleted class, an expired login. The connection stops quietly, and nobody notices until month end.
What it costs you
The obvious cost is bookkeeper hours spent reconciling. The bigger cost is that the owner cannot trust either number in the middle of a job.
Ask a builder mid-project what their margin is on the house on Lot 14. If job costs and books are separate, the honest answer is “I’ll know at closeout.” By then it is too late to do anything about it. The margin report we listed in five reports every builder should read weekly only works if it reads from the same ledger that pays the bills.
One ledger, not two that sync
Almost every construction platform handles this the same way: it keeps the job numbers and syncs to a separate accounting package that keeps the books. Better syncs help. They do not remove the second ledger.
We took the other route. In Yglu, the Accounting module is the books of record. The ledger, budgets, change orders, invoices and draws are one set of numbers. A change order approved on site is already in the books. A sub invoice is entered once, against the job and the cost code, and it is the same entry your accountant sees.
Your existing QuickBooks history comes over during the install, so you are not starting the books from zero. Your accountant works from the same numbers your team sees.
Three questions for whatever you run today
If those three answers bother you, that is worth an hour on a fit visit. Bring your bookkeeper.
Written by Kol Dorney, founder of Yglu. Field Notes drops when there is something worth putting on the record, not on a publishing schedule.