The easiest way to track project overruns (aka slippage)



Transcript


Hey contractors! Are you looking for an easy way to track project overruns or slippage on your jobs? Well, today I'm going to show you a method that will save you hours of time, make your business more profitable, and the best part, you don't need an accounting degree to implement it! Keep watching to learn more.


Every contractor I've spoken to understands the importance of comparing actual to estimates, because in so doing, you can check whether you're pricing your jobs properly. When I ask contractors, whether they're comparing their actuals to the estimates, I get one of two responses. The most common response I get is, "No, I don't do it."


And when I ask why, the typical response I get is, "It takes way too much time to do so." The second response I get to this question is, "Yes, I do it, but it's a very manual process involving a binder of receipts and an Excel spreadsheet. Sometimes a handwritten document." Today, I'm going to show you how easy Level makes comparing your actuals to your estimates or tracking your project overruns,


also known as slippage. In fact, it only takes a couple of minutes out of your week to track project overruns using Level and to show you how, I'm going to cover three things today. I'm going to cover how you add your budget to Level, how you track your actual cost, so that's typically your labor and other job costs like material costs and subcontractor costs.


And lastly, I'm going to cover how Level syncs with QuickBooks online.


So the first thing we need to do to track project overruns using Level is add our budget to Level. The budget is found in your estimate, and here is an example estimate I did for a kitchen remodel and I've broken it down into two columns. The first column is the labor hours. The second column is my material and subcontractor costs.


And I've totaled these at the bottom. And it's just important to remember these total. So I expect to spend 300 labor hours on this job and my expected material and subcontractor spend is $18,000. Now, I want you to remember those numbers, 300 hours and $18,000. The next thing will want to do is add those budgeted amounts to a Level project.


I'm going to demonstrate how you can do this using the mobile app, but you can follow the exact same steps when using the web version of Level. I'm going to create a project from scratch, so to do so I'm just going to press that big blue plus button. When I tap that button, I have a couple of options here.


I'm going to edit my budget settings. And if you recall, when I looked at my estimate, my total expected expenses, when it came to materials and subcontractors was $18,000. So I'm going to add it into this receipts/invoices row.


And if you recall from the estimate, I estimated that the kitchen remodel is going to take 300 hours and I'm just going to tap done. Now, my budgeted numbers are in there. I'm just going to give this project a quick little title called kitchen remodel example, and I'm just going to hit save.


As always, when you create your project, we give you a project overview. You need to add a receipt or invoice to get that third tile, uh, which is a running total of your receipts and invoices. I recommend adding them directly from the mobile app. Uh, especially if you're getting emailed invoices and I'm going to show you how to do that.


Yeah, through an example because I just received an invoice from my electrician, so here we go. I'm gonna go to my email and here's my electrician, the Sparky invoice. I'm going to open this. I'm gonna tap on the PDF. I'm just going to screenshot this thing, right. So screenshot it, and then I'm going to crop it.


Tap save to photos. I'm going to go back to my Level project, and I'm going to add that receipt or invoice.


I'm just going to hit save. And boom! As you can see that third tile just popped up and there's a little green bar there underneath the tile which shows me that I'm still under budget, which is great! Let's fast forward to see what this looks like a couple of weeks later when I'm near the end of my job.


So fast forward a couple of weeks into the job and as you can see I'm currently clocked into the job for six hours. And when I look at my project overview and look at the hours worked, my tile has actually turned red. And the reason it's done that is because I estimated 300 hours for this job and I've gone over my estimate or over my budget.


And have not updated my budget because I haven't subsequently issued an invoice for this additional work. If I had issued an additional, additional invoice or change order for the additional work that this took, I could have quite easily updated my, um, budget by going to the settings. But I did not do that this time.


And I've actually lost money because I incurred 12 hours of labor hours and did not charge my client for that time. The next thing you'll notice is that my running receipts and invoices total has turned from green to orange. The reason being I am within 25% of my budget total. As soon as you hit that 25% mark, we change the progress bar to orange.


Just to give you a heads up that you're approaching budgeted cost for this job. And I actually came under budget, uh, by a couple of hundred bucks. And that's awesome to see, right. And misinformation you see in real-time, every single day. And I've been speaking to our contractors who have been using Level and they absolutely love this feature.


The reason being when you're in a job, it's very hard to know where you are in relation to the end of the job. By knowing your actual expenses or your actual hours work at any point in time, you at least get a sense of where you are in relation to the end of the job. Right. So if I had spent $9,000, uh, on materials and subcontractor costs, in this example, I would expect that I was halfway through my job.


And you would know whether you're halfway or not, when you're on the job site. So to sum this all up, I want to show you finally how those receipts and invoices are synced with QuickBooks online.


So wrapping up here, if you recall, I uploaded that invoice from my electrician to a Level project. And as you can see, if I navigate to this row over here, which you'll be able to find in your transactions tab under the header receipts within QuickBooks, you can see that that invoice is here to get processed.


How the sync with Level works is we can forward any invoice or receipt uploaded into our software to an email address of your choosing. In this case, it was a QuickBooks email address, but we sync with Sage and other accounting software solutions quite easily through the way we send these emails.


And if you don't want to sync with your accounting software, you just want to forward those, those invoices or receipts directly to your accountant. We could set that up for you too. All we need is your accountant email address. So in this example, I'm going to show you how you can. Process this invoice that you've received from the Sparky electricians.


So you can A) reduce the double entry in your business. B) have the documentation you need to file taxes quickly and easily, and third, keep your accountant happy. So to process that invoice, all you have to do in QuickBooks is tap review. The QuickBooks technology is pretty cool because it pre-populates a lot of these categories or you, we just have to change this to a bill because it's an invoice, not a receipt.


We have to give it a tax type, in this case, it's 13%. Um, and we just need to make sure that that account category makes sense in this case, that should be subcontractor costs of sales. Boom, hit, save, and next. It's going to ask you, is this correct? You just hit create bill. And when I pay that amount what's going to happen is I'm going to have the opportunity to match that invoice to a bank transaction.


And that's it so quick and easy to do. Um, you don't need a lot of time to actually A) track your job costs and even do your bookkeeping through Level. It is so easy to do. It saves so much time. Um, and our contractors love our application. And that's it for me today. I hope you enjoyed this walkthrough of how Level can make tracking your project overrun


so easy to do and give you the data you need to make awesome business decisions. Uh, if you have any questions, feel free to leave them in the comments below or email us at support@checkthelevel.com. And as always let's go out and build better. Cheers.