How to Run ServiceTitan and QuickBooks Like a Pro

Diana Lamirand
June 9th, 2020
12 Min Read

While running your own home services business takes skill and technical know-how, it also takes a business mindset to understand your company’s accounting. 

Many contractors turn to QuickBooks to keep their finances in order, including tasks such as calculating payroll, invoicing customers and ordering inventory. Others choose to link their field management software, such as ServiceTitan, to their QuickBooks account for even better operational efficiency.

In a recent ServiceTitan webinar, Business Consultant and Operations Expert Kathy Nielsen shared tips, tricks and must-dos for using QuickBooks, and she explained how ServiceTitan and QuickBooks work together to save your company time and money.

Nielsen’s tips and tricks for Quickbooks include knowing:

  • Pros and cons of employing a self-taught bookkeeper in your office, and how to mitigate associated risks.

  • Trends business owners should look for in their books, and what business decisions they can make based on those trends.

  • The difference between QuickBooks and ServiceTitan—who needs access, who is responsible for making adjustments, and how the integration works.

  • Common pitfalls, including how to reduce the number of manual entries and properly track AR, liabilities and payables.

» Want to grow your business? Click here to get a demo.

QuickBooks Online or QuickBooks Desktop?

Before digging into how QuickBooks works, home service company owners must first decide whether to use QuickBooks Online or QuickBooks Desktop. 

The two programs behave differently, Nielsen says, and each has pros and cons.

For instance, the desktop version offers much better permissions to dial in, which essentially provides more control over who logs in and gains access to your QuickBooks account. The online version doesn’t yet offer dial-in permissions and typically only grants access to the company owner or chief bookkeeper. Certain data entries, such as refunds, are also done very differently in QuickBooks Online vs. QuickBooks Desktop. 

“In QuickBooks Desktop, for example, you go to a customer with a credit balance, click on a button that says ‘use credit to send a check,’ and boom it’s done,” Nielsen says. “In QuickBooks Online, it’s a refund receipt.

“Otherwise, I’m having to set them up as a vendor … customers are not vendors, so we don’t want to do that,” she says.

Pros and cons of using untrained bookkeepers

As small business owners, many contractors do their own bookkeeping or depend on their moms, spouses, siblings or a family friend to keep their company’s financials in good working order. 

That’s fine, as long as your self-taught bookkeepers know their limitations, Nielsen says.

“If you don’t know, don’t just throw something in there,” she explains. “Financials are critical data. If you don’t know, find out.”

She highly recommends hiring a CPA to conduct a quarterly review of financials, especially for companies using untrained bookkeepers. It’s also important to know the difference between a CPA who files your taxes and the one who calculates your P&L.

“One is looking to show your profitability and one’s looking to not show you’re profitable—to save on taxes,” Nielsen says. “Those are different types of accountants, but whomever you use, make them review whatever you do.”

If your CPAs suggest making adjustments, find out why so you can take steps to prevent the accounting problem in the future.

Also, make sure the person performing your bookkeeping is not the same one writing and signing the checks, and doing reconciliation. 

“When I was a bookkeeper, I cut the checks but I couldn’t sign them. When I was a GM, I was the one signing the checks, but I had bookkeepers cut them,” Nielsen adds. “The same person should not write the checks, sign the checks and do the reconciliation. You can get into trouble very quickly.”

Look for business accounting trends, even if you don’t understand finances

Many contractors who start their own companies know the technical side of the business well but feel lost when it comes to reading financials, Nielsen says.

“I’m absolutely OK with that, but learn to watch for trends in your business,” she says. “If you can’t pick up financials and tell me everything about your company, you can at least look at your own trends.”

Search for percentage trends in things such as labor and material costs, marketing dollars, and giveaways. For instance, if your marketing dollars allocation is typically at 8 percent and it suddenly jumps to 15 percent, you’re watching that trend and calculating your next move.

Don’t give away the keys to the farm when hiring out financials

Who has access to your financials, in QuickBooks or ServiceTitan? If you don’t know, you should.

“We are very trusting business owners,” Nielsen says of the home services industry. “In one year, I was at six shops where I found people stealing from the business, and I wasn’t even looking for it.”

Put business policies in place to keep honest people honest, she advises, and curb all permissions for both QuickBooks and ServiceTitan administrative accounts.

“ServiceTitan is data for your customers, it’s what you use to collect (payment),” Nielsen says. “QuickBooks is your financials. There are very few people who need to be in your QuickBooks at any given time.”

Only owners, bookkeepers, and your company’s CPA need access. If you’re not exporting purchase orders from ServiceTitan into QuickBooks, as either a PO or payable, you may have someone else on staff doing that data entry for you. 

“If someone is entering payables, really limit their access and what they can see,” she advises.

QuickBooks verbiage differs from ServiceTitan

Nielsen finds much of the confusion over integrating QuickBooks with ServiceTitan centers around different words used to describe the same things.

For example, a “Business Unit” in ServiceTitan is the same as “Class” in QuickBooks, both of which are commonly known as “departments” within a company.

Other helpful things to know:

  • The Business Unit in ServiceTitan allows for dashboard mapping of your sales and revenue numbers, and you can schedule multiple Business Units to hit one Class in QuickBooks.

  • The Class groupings in QuickBooks allow you to run your Profit & Loss and Balance Sheet statements by class or department.

  • Don’t make the mistake of setting up a Business Unit called “Sales” for tracking revenue from sales. A business unit of sales will not carry revenue, but is only used for mapping and tracking sales made by people.

  • Sales happen when an estimate is sold and converted. 

  • Sections that carry revenue include: Service, Maintenance, and Install. 

  • Install revenue shows on the installer, not the salesperson. A Salesperson’s numbers show in Sales. 

“You want the revenue to show when the labor happens,” Nielsen says. “I see a lot of people changing splits to put revenue back on the salesperson, but that’s technically not correct.” 

The #1 newsletter for the trades.

She’s also not a fan of the “Done for Now” option in ServiceTitan when integrated with QuickBooks, which some contractors use to track larger, multiple-day jobs.

“Your revenue data should match in QuickBooks,” Nielsen says. “It hits here when a job completes that carries revenue. If you use ‘Done for Now,’ it will never hit that revenue. It will also never hit the invoice screen to be batched, posted, and exported to QuickBooks.”

Choosing the “Done for Now” option creates other problems with proper tracking and may leave unclaimed money just sitting there, Nielsen says. One of the first things she does when consulting with companies is to search for “scheduled jobs prior to yesterday.”

“There is no such thing … because a job shouldn’t be scheduled prior to today,” she says, pointing to the “Done for Now” option as the most probable culprit.

Other tips and tricks for running QuickBooks and ServiceTitan like a pro

1. Invoices and payments are separate transactions. 

Keep invoicing and payments separate by changing the settings on batching.

“Your bookkeeper is the one who batches, posts, and exports payments. You usually have someone else doing invoicing. I have CSRs do my invoicing. I want my bookkeeper to do the payments,” Nielsen says. 

“You can create 500 batches a day and call it mashed potatoes, ServiceTitan doesn’t care,” she adds. “Just don’t make it crazy with invoices and payments together.” 

2. Make sure your QuickBooks links to ServiceTitan or other software.

“This seems very basic, but you would be amazed at how many times I go into a shop and find they are not linked,” Nielsen says.

When not linked properly, Nielsen finds some companies just pull in whatever they see on their bank statement. 

“In theory, that makes sense. But the reality is, what happens to all of the things that don’t hit your bank? What happens to the things like people who didn’t pay you, or discounts, or coupons? You have no way to track that if you’re just pulling in from your bank statement,” she explains.

Manual entries also introduce the opportunity for human error, so try to eliminate all that you can.

Another big no-no, Nielsen says, is not batching, posting, and exporting unpaid invoices from customers. 

“That income stream in ServiceTitan should be clean. I do a ‘within 24 hours’— that invoice needs to be batched, posted, and exported,” she says. “If you leave your Accounts Receivable sitting there, it never hits revenue in QuickBooks, so now your financials are off.”

3. Open AR in QuickBooks and ServiceTitan should match to the penny at any given moment.

Run reports for Accounts Receivables in both programs and make sure they match, even though it’s common to find they often don’t match.

“I’m a freak about it,” says Nielsen, who runs her reports once a week. “The beauty of accounting is it’s pretty black and white. Things have to balance and match.”

If a payment is applied to the wrong account, it’s a quick fix to just move it to the right account in QuickBooks but not so much in ServiceTitan. 

Here’s what Nielsen suggests for moving the payment in ServiceTitan to match what’s in QuickBooks:

  • Go to Legacy Accounts Receivable report in ServiceTitan.

  • Choose status as exported. “This is critical because the only thing QuickBooks knows is exported,” she says.

  • Set up a payment type and call it “AR Fix” or “Applied AR,” and make sure it exports as a payment, contains no attributes, and is hidden from mobile view.

“I don’t ever want my techs to accidentally use it,” Nielsen explains. “Having no attributes means it will never accidentally export to QuickBooks. It will throw an error on your pending report and you can just bypass it.

“Then you will do that negative or positive payment entry on an invoice,” she adds. “If I have an invoice with a negative balance because the payment was applied to the wrong one, I’ll apply a negative payment to that invoice and then apply a positive payment to the right one. In the memo, just say ‘Applied to Invoice XYZ’ and bypass, and it zeroes that out.”

4. Find job costing in ServiceTitan, but not QuickBooks.

With QuickBooks, you can take a higher-level profitability look by department, but not by individual jobs. ServiceTitan shows you costs and profitability by each individual job.

In ServiceTitan, a job is a visit and a project is the scope of work. Each job carries an invoice with job-costing information listed on the invoice screen.

On the project screen, you can find job costing for the entire project. For instance, a four-day job might entail a service tech call, a sales visit, then the actual repair or install, so the scope of work might show five or six jobs and all purchase orders for the project.

To do job costing in QuickBooks, you have to put the job on each line item when entering data for each receivable and each payable.  

5. Revenue, discounts, coupons, rebates, etc., feed from your pricebook.

When your techs offer discounts and coupons or waive a fee, make sure they show the “service on” and the “discount or coupon off” in your pricebook.

“You don’t want to just zero out the price. If they don’t show ‘service on’ and ‘discount off,’ you can’t track any of that financially,” Nielsen says. “I need to track how often we’re giving things away.”

Use the General Ledger Account line in your pricebook (under “Service” or “Materials and Equipment”) to specify which income stream (HVAC or plumbing, for instance) or business unit to feed QuickBooks. 

“Globally, it’s revenue or income, but departmentally it’s driven by the job,” Nielsen says. “That way, you can have one service across multiple business units.”

Nielsen considers coupons as marketing deals, and discounts as giveaways. She keeps separate accounts for each.

“How much did I have to give away to make people happy, or is my price too high, what’s happening? Are people using these coupons? And what is that financial impact?” she says.

6. Clean up messy refund payments.

“I see people in QuickBooks just doing a lot of manipulating, because their refunds are messy,” Nielsen says. “The easiest way to handle that is to create a refund payment type for each one (checks or credit cards).”

She created a Refund Check payment type, and exports it with no attributes and hidden from mobile view. She also designated a Refund Credit Card payment type, which exports as a journal entry into undeposited funds. 

“A credit card refund is part of my credit card deposit, but I can’t have it exported as a credit card because it’s a negative payment. So I do this and it will hit correctly, and I add it to my deposit,” she says. “Again, hide it from mobile. Don’t let your techs accidentally use it.”

The key is to reconcile daily.

“I can reconcile every morning—it takes about two minutes. At the end of the month, it takes about 10 minutes,” she says. “If I do it once a month, my financial dashboard in QuickBooks is accurate for about an hour, once a month.”

7. Understand new recommendations on rebates (or buy-downs).

In the past, ServiceTitan labeled rebates as a payment type called “Finance Fees,” Nielsen says, but some of the reporting didn’t work correctly.

She suggests running rebates through the liability account in QuickBooks, which in theory should net to zero. 

“You do these adjustment invoices, which honestly is a little bit messy when you look at a project invoice and email it to a customer,” she says. “Don’t let people who don’t understand accounting do adjustment invoices.”

She also suggests talking to your ServiceTitan Customer Success Manager to learn more about the new workflow for rebates or buy-downs.

Other bits of wisdom learned during the Q&A

  • Make sure your business unit names in ServiceTitan match class names in QuickBooks. This simple fix prevents many errors.

  • Every day your techs work on a multiple-day job, you should be batching, posting, and exporting. It carries a $0 invoice each day, until the last day when revenue happens.

  • When QuickBooks and ServiceTitan are linked, you send an invoice to a customer. When that invoice exports to QuickBooks, it hits receivables and revenue. If you accept payments in ServiceTitan, those hit undeposited funds and receivables in QuickBooks. If you receive purchase orders in ServiceTitan, they hit as a payable and cost of goods in QuickBooks. “What the linking does, it makes that double entry for you very easy,” Nielsen says.

ServiceTitan is a comprehensive home and commercial services business software solution built specifically to help companies streamline their operations, boost revenue, and achieve growth. Our award-winning, cloud-based platform is trusted by more than 100,000+ contractors across the country.

Ready to learn more about what ServiceTitan can do for your business?  Contact our team to schedule a demo today.

ServiceTitan Software

ServiceTitan is a comprehensive software solution built specifically to help service companies streamline their operations, boost revenue, and substantially elevate the trajectory of their business. Our comprehensive, cloud-based platform is used by thousands of electrical, HVAC, plumbing, garage door, and chimney sweep shops across the country—and has increased their revenue by an average of 25% in just their first year with us.

Learn More

Related posts