1) Module HUD
- Module #: 13 / 13
- Time: 10–20 min
- Outcome: “After this, you have a contractor-friendly glossary + cheat sheets you can reference (or hand to a bookkeeper) so your QBO setup stays consistent.”
- Prereqs: None
- Stop here if: you already understand the terms and just need the module library as step-by-step SOPs.
- Level tags used in this module: ✅ Baseline / 🛠️ Operator Upgrade / ⚠️ Advanced
2) Answer Box (snippet block)
- What it is (2 lines)
A plain-English glossary of the QBO terms you’ll see in this module library.
Plus a few cheat sheets that prevent the most common contractor bookkeeping mistakes. - When to use it (2–4 bullets)
- You’re onboarding a bookkeeper or admin
- You need a quick “what does that mean?” reference
- You’re troubleshooting and need to confirm definitions
- You want the shortest path back to clean, consistent workflows
- The common mistakeS (1-2 line)
Using the right words incorrectly (“deposit,” “retainer,” “undeposited funds”), then building the wrong workflow. - The fixES (1-2 line)
Use the glossary terms consistently, then follow the mapped module for the workflow.
3) The mental model (keep short)
- Definitions drive workflows. Workflows drive reports. Reports drive decisions.
- Most contractor messes come from 5 things: duplicates, uncategorized, misapplied payments, missing job assignment, and sloppy items.
- Keep COA simple. Put detail in Products and services + Job Type on the job container.
- If you can’t explain the workflow simply, it won’t survive a busy week.
4) Do this in QBO (step-by-step)
- Bookmark this page in your internal SOP library (yes, even if you “never bookmark things”)
- When you hit a term you don’t recognize:
- Find it in the Glossary
- Jump to the linked module in “Where it shows up”
- When you see a symptom:
- Go to [Module 12 — Problems Hub (index page)] and follow the map
- Use the cheat sheets monthly:
- “Bank feeds: Match vs Add”
- “Deposits/retainers: what posts revenue”
- “Job costing: assignment rules”
- If you’re training someone:
- Make them complete the Lab from each module before they touch live data
Pro tip: “We’ll figure it out later” is how later becomes expensive.
5) Real-world example (mandatory)
Your bookkeeper says: “I put the deposit into Undeposited Funds so it won’t count as income.”
That’s wrong.
- Undeposited Funds is a temporary holding step for payments not yet deposited
- It doesn’t change whether revenue is recognized
Fix: - Use the correct deposit workflow from [Module 6 — Progress Billing, Deposits, Retainers]
Result: deposits stop creating weird A/R and phantom income problems.
6) Run this report now (mandatory checkpoint)
- Report name: Profit and Loss
- Filters/settings:
- Go to Reports → Profit and Loss
- Date range = last full month
- Click Run report
- What “good” looks like:
- Income is believable
- Job costs are not buried in overhead
- Uncategorized is minimal
- What “broken” looks like:
- Duplicates inflate income/expenses
- Job costs missing or coded to overhead
- Big Uncategorized / “Ask My Accountant”
- One fix if broken:
- Go to [Module 12 — Problems Hub (index page)] and follow the symptom map from the top.
7) Lab (do it on your file)
- [PASS/FAIL] You can define Undeposited Funds correctly in one sentence
- [PASS/FAIL] You can explain Match vs Add in Banking
- [PASS/FAIL] You can define what creates revenue (Invoice, not payment)
- [PASS/FAIL] You can define your job container (Projects)
- [PASS/FAIL] You can name where detail lives (Products and services) vs where it should not (COA)
- [PASS/FAIL] You can name your 4 Job Types (service / remodel / new construction / commercial)
- [PASS/FAIL] You know which report to run first when profit looks wrong (Profit and Loss)
- [PASS/FAIL] You know which report to run first when job profit looks wrong (Project Profitability Summary)
8) Knowledge check (3 questions)
- What is Undeposited Funds actually for?
- What creates revenue in QBO: Invoice or Receive payment?
- Where should trade/service detail live: COA or Products and services?
9) Next + Related
- Previous: [Module 12 — Problems Hub (index page)]
- Next: [Module 1 — Contractor Accounting Mental Model]
- Related modules (2–3)
- [Module 4 — Bank Feeds]
- [Module 6 — Progress Billing, Deposits, Retainers]
- [Module 10 — Monthly Close in QBO]
- Don’t do this warnings
- Don’t use Undeposited Funds as an accounting method. It’s a step, not a strategy.
- Don’t build detail in the Chart of accounts. That’s how COA becomes unmaintainable.
- Don’t job cost without job containers (Projects) and consistent assignment.
- Don’t let anyone “fix” reports by changing settings randomly.
Fast now = slow forever.
FAQ (short)
What’s the fastest way to troubleshoot a QBO problem?
Use [Module 12 — Problems Hub (index page)], run the first report, apply one fix, and re-run.
Is Undeposited Funds income?
No. It’s a temporary holding spot for payments before deposit.
What’s the difference between a Customer and a Project?
Customer is the payer. Project is the job container under that payer.
Where should job type live (service/remodel/new construction/commercial)?
As a Project custom field (Job Type), not in the COA.
Where should “profit by service type” detail live?
In Products and services, if you will maintain consistent coding.