Why This Matters Right Now (and Why “Mostly Right” Is Still Wrong)
In construction, your numbers aren’t just for taxes, they’re your feedback loop for bidding, scheduling, cash flow, and whether you can afford that next piece of equipment. When AI makes a “confident” guess, it looks helpful at the moment… until month-end reveals a messy over/under billing position or a job whose margin mysteriously evaporated.
Consider three small, common miscodings:
- A supply-house receipt coded to Office Supplies instead of Job 2147 • 02-Earthwork
- A rental bill posted to generic COGS with no job
- A subcontractor invoice mapped to an item that doesn’t match how you estimated
Individually, these don’t feel catastrophic; collectively, they wreck the story your reports are supposed to tell. You don’t just lose accuracy, you lose trust in your numbers. And once your PMs stop trusting reports, they stop using them, which is how margin drift becomes business-as-usual.
Bottom line: “Mostly right” is not good enough in job costing. You need consistent, explainable, and auditable results every month. AI can be part of that, but only inside a guardrail system.
What Intuit Assist + QuickBooks AI Actually Do (and Don’t)
They do:
- Read patterns from your past categorizations and suggest categories or bank rules
- Auto-match bank feeds to open bills/invoices
- Propose class/location tags if you’ve been consistent
They do not:
- Understand job context (what job should get this charge?)
- Understand your cost code structure or how it maps to estimating
- Know your capitalization threshold, retainage, or change-order process
- Infer policy (e.g., CO costs must be invoiced within 7 days)
Treat AI outputs as drafts. Your books should reflect your policies, not a probability model.
Your Governance Stance: Three Default Settings That Save Profit
- Suggestions ON. Auto-posting OFF.
Let the system propose; never let it post to the general ledger without a trained human’s review.
- “No job, no post.”
Any dollar that belongs to a job must have a job before it hits the GL. Ambiguous charges live in an exception queue until they’re clarified.
- Narrow rules that fail safely.
Rules should be ultra-specific (e.g., a known vendor + memo pattern) and default to “park for review” if anything looks off (new vendor, round amount, missing document, over threshold, Amazon/big-box).
These three defaults capture 80% of the risk without slowing you down.
The Field-to-File Workflow (Crew-Proof, PM-Friendly)
Step 1: Capture, same day:
Field staff email or app-upload receipts the day they’re incurred. Required fields: vendor, date, amount, job. For high-risk vendors (big-box, Amazon), expect splits across jobs or categories.
Step 2: Human review:
The bookkeeper compares the source doc to the bank feed, applies policy (job, cost code, capex, tax), and resolves splits. If unclear, it goes to the exception queue for the PM.
Step 3: Post to QuickBooks:
Only approved transactions post to the GL with the job and correct item, not just a broad expense category.
Step 4: Reconcile monthly:
Bank, credit, loans, and clearing accounts are reconciled every month before reports are finalized. If it isn’t reconciled, it isn’t “closed.”
This workflow turns AI’s speed into structured throughput, not chaos.
The Four Controls That Protect Margin (and Make Your Reports Believable)
1) Job Required at Capture
Any materials, subs, rentals, small tools, equipment tied to field work must include a job before posting. No exceptions. If a charge truly isn’t job-related (e.g., administrative office supplies), fine, just be sure it’s intentional and documented.
Pro move: Auto-flag any COGS without a job as an exception.
2) Items That Mirror Estimating
Your item list in QuickBooks should mirror the cost codes you use to build bids. If estimating calls it 02-Earthwork, your item shouldn’t be “Site General.” When your items match your estimating structure, Estimates vs. Actuals (E-v-A) becomes instant insight instead of monthly archaeology.
3) The 7-Day Change-Order Rule
Costs tagged CO need an invoice within 7 days, or you’re financing scope creep. Build a simple alert: if a CO-tagged cost has no related CO invoice after 7 days, ping the PM. You’ll be shocked how much profit stays in your pocket with this one habit.
4) Retainage & WIP Discipline
Track retainage receivable separately and review WIP monthly: earned vs. billed with over/under analysis. AI can suggest matches, but it can’t reason about retainage or progress billing nuance. Your control here ensures revenue timing reflects reality.
Common Failure Patterns (and How to Fix Them Fast)
Pattern A: “The helpful rule that lied.”
A broad bank rule sends every supply-house charge to Office Supplies. You just turned tools/materials for three jobs into overhead.
- Fix: Narrow the rule or kill it. For certain vendors, require job selection before posting and default to review.
Pattern B: Amazon as a single category.
One Amazon invoice can include a drill, software subscription, safety gear, and a book: four different treatments.
- Fix: Treat Amazon as high-risk. Expect line-item splits and attach the source detail to the transaction. If you can’t split it today, park it in exceptions.
Pattern C: Progress billing mismatches.
Deposits get matched to bank feed without reconciling to the schedule of values (SOV) or the retainage math.
- Fix: Map items to SOV, separate retainage, reconcile each cycle, and include this in your month-end checklist.
Pattern D: CapEx missed in the rush.
A $1,600 compressor lands in Supplies. Your tax position and fixed asset register are both wrong.
- Fix: Publish a capitalization threshold (e.g., ≥ $1,000), require a second reviewer for capex, and maintain an asset register with in-service date.
Pattern E: E-v-A happens “when we have time.”
By the time anyone looks, the job is closed and the lesson is useless.
- Fix: Ten-minute Friday huddle: review job variance by code and flag >2% slippage. Correct coding now, issue COs now, learn now.
Month-End “AI Audit” (30–45 Minutes That Pay For Themselves)
1) Rules review:
Which rules fired? Which caused reclasses? Tighten or deactivate anything uncertain.
2) Vendor pass:
W-9s on file? 1099 mapping checked? Any new vendors added without review?
3) CapEx sweep:
Scan for purchases near/over threshold; validate asset register and in-service dates.
4) Job completeness:
Zero COGS without a job. CO costs have a matching invoice. No stranded costs in overhead.
5) WIP pack:
Earned vs. billed, over/under analysis, retainage reconciled. If something doesn’t reconcile, investigate before publishing.
Make this audit a standing meeting on the first business day after you reconcile. You’ll sleep better (and so will your CPA).
Metrics That Keep Everyone Honest (and Improve Behavior)
- Error Catch Rate = exceptions ÷ total transactions
Early on, this should rise (you’re finally seeing the issues) then stabilize as staff and rules improve.
- Time-to-Correction = avg days from exception → resolution
Target < 7 days so problems don’t age into month-end.
- Days-to-Close = calendar days from month-end → final reports
Aim to shorten this over time; faster close = faster decisions.
- Jobs with >2% Weekly Slippage
The percentage should trend down as your Friday E-v-A huddle becomes routine.
These aren’t vanity metrics, they’re the scoreboard for process quality.
Your One-Page Policy (Print This and Hang It Up)
Defaults
- QuickBooks AI suggestions ON; auto-posting OFF
- No job, no post for materials/subs/rentals/small tools
- High-risk vendors (Amazon, big-box) require review/splits
Approval Matrix
- CapEx ≥ threshold: second reviewer + asset entry w/ in-service date
- Atypical/large transactions: second reviewer
- CO-tagged costs: PM review; invoice within 7 days
Exceptions (park for review)
- New vendor • Round amount • Missing document • Amount ≥ threshold • No job • Amazon/big-box ambiguity
Close Checklist
- Reconcile bank/credit/loans/clearing
- Run AI audit (rules, vendors, CapEx, job completeness)
- Prepare WIP pack and publish
Adopt this policy “as is” and you’ll already be outperforming most shops on data quality.
Getting Started This Week (No New Software Required)
- Turn off auto-posting anywhere it’s on.
- Add job required to your capture workflow and publish your exception triggers.
- Align items to estimating (do the messy mapping once; reap the benefits forever).
- Configure the CO alert (no CO invoice within 7 days → PM ping).
- Schedule your first month-end AI audit and make it recurring.
You don’t need to rip and replace systems. You need clarity, discipline, and the willingness to let AI help, but not decide.
Final Thought: Speed Without Surrender
AI is phenomenal at reducing clicks. But clicks aren’t the point. Clarity is. The job isn’t to get transactions into QuickBooks; it’s to get the truth out of the reports. Keep AI in a supportive role, hold the line on human review and policy, and your numbers will do what they’re supposed to do: win bids, protect margin, and keep cash predictable.
By Katherine White
