QBOchat Interviews Knowify

I recently caught up with Terrin Kalian with Knowify in Atlanta, GA and we interviewed him about Knowify and how they help contractors with their accounting.

Knowify Interview Video Transcript

Welcome to QBOchat interviews. Join us as we interview some of the best apps, that integrate with QuickBooks Online and learn how these Apps are making life better for accountants and bookkeepers.

Hey guys! This is Cathy. I am here with Terrin with Knowify. And, we want to know a little bit more about Knowify and what you guys do.

So, Knowify is an all-in-one project management software for construction contractors. We specialize in job costing, giving real-time job cost reports on labor and materials, and it’s all fully integrated with QuickBooks Online. So, they don’t need to enter anything directly into QuickBooks. They just manage their jobs and we take care of that side for them.

So, then your, then the users, or you setup the users over there and everything moves over into QBO so {Correct} they don’t have to go into QBO. {Exactly}

So, for the contractor using Knowify, it’s almost like Knowify’s an extra employee taking care of entering everything into QuickBooks for them, so they don’t need to learn very much about, you know, how to actually enter into QuickBooks. They just learn how to use Knowify. It’s built for construction so it makes sense to their business. And it takes care of all the accounting.

What types of users are the best fit for Knowify?

Knowify serves a variety of businesses, but we’re mainly built with, for trade contractors, trade subcontractors. So, think plumbing, electrical, HVAC. Painting is another big market for us. We also work with a lot of residential remodelers. Companies that are just starting to do bigger projects than just single trade and maybe they have both their own laborers as well as some people they are hiring to do some subcontracting work on the project.

So, with the trade subcontractors, those are the ones that do the AIA form?

Yeah, absolutely, commercial subcontractors often struggle to put together the AIA form. And, so it’s useful for them to have a system where they just hit a couple of buttons, put in the right values, and it outputs the very complicated G702 and G703 form, so they don’t need to learn how to do it or struggle with Word or Excel to put it together.

Good, and then they don’t have to worry about math not working.

Yeah, absolutely. We’ll take care of the math and it automatically calculates retainage which is always a bit of a pain for them to do. Plus, it’ll build the retainage invoice afterward. So, it’s not like that will escape from them. They’ll always have a reminder that they need to invoice the client for the retained values.

How do you deal with change orders?

Change orders are part of the same contract in Knowify. So, it’s not like you need to go find a workaround of adding a separate job, for the change order management. You just go to the list of line items from the schedule of values that you initially setup and you have an add change order option which is also e-signable. Just like our proposals.

That way the client can actually sign off before moving forward on these, which we found is usually a constant struggle for people who don’t have anything for e-signature. The client will give them verbal, like, please do this additional work and they will not end up paying them for it. And, so it’s nice to have a little bit confirmation from the client first.

What are the features that users love about Knowify?

Well, a little bit of everything mentioned so far, but I’d say, you know, the automation of being able to manage your proposals and having that go to e-signature. Plus, we customize the proposals documents for all the contractors, so if they want to have a specific field that goes with their company and they want to send it through Knowify, that is an option.

And then just gives the client a more professional feeling of your company, when your initially communicating with them. You know, being able to send something from a cloud-based software. It looks a little bit better to be present yourself, rather than just scribbling on a napkin, this is how much I’ll do the job for and handing over in person.

What are some misconceptions about Knowify?

I think a lot of people, especially working in the QuickBooks network, kind of would compare Knowify to some of the apps that you kind of just plug it on to QuickBooks and it does one small thing. Knowify for the contractor is the main point of input. So, it’s a lot to learn, it’s a big piece of software. But obviously we keep it simple to learn and we do free customer support and training, so we’re always happy to work with anyone who wants to learn how to use Knowify.

Are you ready to see Knowify?

So, just to show a little bit more about what the inside of Knowify looks like here. This contract jobs screen is kind of the home base where you can see an overview of where you stand in your jobs. You know, since Knowify is a project management tool beyond just the accounting side of everything, I get also see statuses. You know, whether or not the job is active or waiting on a response on a change order. Jobs that are still in the bidding stage or waiting on a lead to be processed. And, you do get this real-time cost versus budget reporting as we go through jobs. I get see work in progress, you know, my earned revenue.

And setting up these projects is pretty simple as well where I can add a new job, I can choose a job name, I can choose a client right from my QuickBooks database so I don’t need to re-enter any of this. It just keeps syncing in both directions.

We do have progress invoicing for fixed-price contracts that will allow change order management. Plus, we also have that same format of contract-style, but we can export the AIA-style invoice document using professional style for job costing is how we can set up a budget for quoting a price to the client. And, the idea is that with Knowify you can get a really detailed budget in a matter of seconds by adding what we call job phases. So, I can say, we need to use a certain sorry, by using what we call, service templates.

So, when I choose a service template, I can choose what kind of service we’re offering. Type in the number of units and Knowify will automatically build a budget for this project, saying how many of each material we’re going need to buy, how many hours it’ll take our workers. If necessary, it’ll pull in a subcontractor budget. And, it can even include a description of the work that we’ll be performing here.

I can go through a project plan as long as we have a consistent list of phases here. All I have to do is write in these different units and Knowify will continuously put together all of my information that I’m going to need before I quote a price to the client. We’ll just do these two phases for now to keep this simple. But, when I click this create bid button, we really start automating the process even further, by using that information to let you quote a price to the client.

This is all about our automation, organization keeping you from having to reenter any of this information. So, I can use the interior drywall budget from earlier, write in a markup percentage and it’ll automatically apply the pricing to the contract for me. And, aside from just generating the document, because we do, we build very detailed proposal documents in Knowify. And we can customize these for you as well.

So, we actually can change around the layout to make sure it prints out the layout that you like as opposed to our default which we’re looking at here. When I hit send out for signature, and I’ll send this to myself so you can see what this looks like. It’ll mark the job as out for signature so I know where the current status is with this project. I can even add a reminder for myself to follow-up with a customer and I can send them a reminder to let them know we need a response on this.

And the customer will actually get this layout of whatever your custom document looks like and they can respond right through Knowify. Once it’s signed, we email you back letting you know you won the proposal and you’re good to start tracking all of your costs and invoicing the client. Plus, we’ll actually switch this job from Knowify from out for signature to active.

So, if I need to submit an invoice for this job. All I need to do is click invoice now, since it’s been approved and actually since this is an AIA form, it’ll ask for some final information to put on the AIA invoices, such as retainage values. I’ll go ahead and hit invoice now. I’ll put in the last date of the billing period and then I just put in the percentage completion of each line and, if necessary, and amount of stored materials.

It’ll generate the classic AIA-style invoice document, which I can actually email to my client right through Knowify. So you can see I don’t really need to reenter any of this information. It’s just that same info from my budget being used to manipulate it to actually give me proposals, to create invoices, and if you need to do AIA invoices, you see that it automatically generates this format. So, it’s a huge time saver so I don’t have to do any of this stuff in Excel. Knowify will just generate it all for me.

Creating invoices in Knowify also will push them to QuickBooks. You don’t have to actually log these invoices directly into QuickBooks, but using Knowify, sending out your invoices through our system, will make sure it shows up in your accounts receivable so it never needs to be entered a second time there.

Same thing goes for payments where I can record that receive payment from the client in Knowify which will push to QuickBooks but I can also pull that payment from QuickBooks into Knowify. So, it’s really whatever flow works best for you. That’s the invoicing side of Knowify.

Again, we like to track the cost, you know, being a job costing platform, this is obviously a very important thing to our system. And, so I can actually just click order materials, choose these items from the list. And, when I start PO process, it’ll just ask for a vendor and create a purchase order for me using all that info. That way I don’t have to retype any of this. I just hit submit, and it generates the PDF and I can email it out right to the vendor.

Last part of this material costing process would be actually logging the bill. So, when the vendor sends me a bill, I can log that right into my Knowify account as well. Again, it doesn’t need to be logged directly into QuickBooks, since when we log a bill in Knowify, it syncs with QuickBooks. So, I say add a new bill with ABC Supply. And, we can even upload the bill document image if you want to do that.

When we log a bill in Knowify and choose a vendor, it shows us a list of everything we’ve submitted in purchase orders and it shows the different purchase orders and their corresponding jobs. So, all I have to do is choose which items in the list that we’re being billed for and I can submit this, and it will send it to my QuickBooks account.

Now, when I go to my job costing, if I look at my contract jobs page, I can see that project updated to show me my current profitability. It shows me my contract value, the amount I’ve billed out of the contract. The amount paid. And, then if necessary the amount that is being retained by the client. And, it’ll also show me my material cost-to-date versus my budget for materials and the same with our labor costs versus materials as well.

And, again, just so we have some management of our contract and the whole change order flow, instead of having to create a new job or having any kind of work around to change orders, I can open up the contract that I initially quoted to my client. I can say, add change order, additional supplies needed. I can write in the price here or I can actually break this down here where I can say I’m going to need extra lumber. We’re going to need to buy 300 more studs with a 50% markup.

It’ll quote the pricing here plus I can also include labor if necessary. I’ll say I’m going to need laborer hours. It’ll take us 50 hours and it’ll quote a price that way. And our change orders are also available for digital e-signature, so if you want to actually get the client to write off on all these before you send it out, sorry, before you invoice that’s an option as well. Now we just have a little bit more of a formal document and it’s a little bit more professional for when your communicating with your client.

Then once this is active, it’ll be another invoiceable line. And since we keep track of all your progress invoicing, if I click invoice now, it’s going to show me the amount billed to date. So I can make any final adjustments. So let’s say I want to invoice 100% of my drawable work now, it’ll even remove the value from our stored materials that we’ve invoiced previously since now they’re part of our completed work.

I’ll invoice my change order as well. And, it’ll generate my second pay application. And that’s a little bit more about how our invoicing works in Knowify as far as our progress invoicing and change order management goes. I’ll just go ahead and manually record this payment. And, since I’ve logged a lot of different invoices and not a lot of costs, we’ll be looking at a hefty 89% profit on this project.

How do you handle a difference between a PO and the bill?

Yeah, absolutely. If you receive a bill and you log it in Knowify, we give you the ability to adjust the pricing in this screen. So, if you send out a PO and you have for your own internal reference, the unit price set to $4.00 and then you receive the bill and it comes out to be $5.62 or something very specific, which is much more likely. When you log that bill that’s the value that will be sent to QuickBooks and that’s the value that we’re going to apply to the cost of the job. So, you know that all of your job costing and your accounting are going to be as accurate as possible.

How are service templates created in Knowify?

Yeah, it’s actually a pretty quick process. It’s done in your catalog just as if you were adding a new service. You choose this is a template and I could say something like, Widget Installation. I could put in a quick description, Installation of widgets, and say, this includes the following (1) site prep (2) rough-in (3) installation as per plans.

Or, I could say we budget this per each widget. The default price is only if you want to skip the budgeting process and say, we know that no matter what we charge $50 per widget. And I get to choose either the ability to write in the labor budget by saying, you know, $10 per widget or I could say, laborer 1 hour per widget, or I could put in minutes, a little bit smaller with this. You know, 20 minutes per widget.

And for materials, again, I can just write in it’ll cost us $20 in materials cost per widget, or I could say budget by materials. So if I have an item in the catalog called widget, I guess I don’t have anything in here, but this is where I’d be able to put in the specific materials I need. So like, if I need wire for this, I could say, you know, for each of these, it’ll cost me 20 feet of wire, and then when I have a subcontractor that needs to help, I could say we also need to hire a subcontractor that will charge us $10 per widget, and it just creates a service like that and now I can use this whenever I’m setting up a budget in my system.

How does time tracking work in Knowify?

Yeah, absolutely. So, we do have a smartphone app. It’s a little trickier for me to pull an example here, but if you go to our time tracker you can actually see that we have the ability to enter time per employee, and this can be automated through scheduling. So, what did I number that job?

So, this is our corporate calendar. This is where I see all the different open projects that we have going on for this month. And then I can add someone to the calendar by saying we started a new job on the 26th, it was project 1413, and our framing work will take us 10 days to complete. This adds it to the calendar so I can see what’s actually happening here over the course of the month.

But if I click on the job board, I can actually set up what shows up on everyone’s smartphone app. So I can grab my crew and assign them to a job on specific days or what we call full-time which just means that they’re scheduled across every day this is scheduled.

And then when someone goes to track time, they can open up their app and it’ll show them what they’re supposed to be working on this day. And, if you need to send them more information, you can notify them right from the job board to give them more information.

And then when people check-in and check-out their time will be submitted into this check-in and check-out view where I can see information about what day they checked in, what they checked into, the time in and the time out, and their distance from the job site at each location, or I should say, each time.

How does Knowify transfer that time to job costs?

Yeah, so, all this will go into the review time section, we also have a foreman view, just to show you this, whoever is in charge of time can enter it by pulling up a phase and writing in the hours. This is just who’s scheduled to work on this, and you’ll see how this affects the cost of the job here. Plus, if I open up that project plan it’ll update my labor costs to date.

Do the labor costs include taxes and like, all the burden stuff on top of it?

Yeah, so when you’re setting up your account, in your rates section you can set up as much detail as you want with your base salary, any benefits, taxes, insurance, workman’s comp, union wages, and the other is just for an overhead factor. So if you want to put in anything else that’s not included in our calculator, that’s fine.

And, the important part is to get the hourly rate for the sake of job costing on each entry so if you don’t want to use our calculator, you can always just write in one manual value that’ll update the right-hand side of the screen, and that’s how we’ll be job costing whenever they enter their hours.

What does the integration with QuickBooks look like?

This is one of my QuickBooks synced accounts. It’s actually connected to a QuickBooks accountant account, QBOA. And we have this tab where I can see all different transactions that have moved back and forth between Knowify and QuickBooks, and if I go this expenses default, I can control how anything on the accounts payable and expenses side sits in QuickBooks.

We’ll choose an overall expense account for everything that we push to QuickBooks from Knowify, but if we want to get more specific, you can choose an individual expense account for each vendor. Same thing goes with payment accounts. And then it also works like this for income. Only instead of choosing an income account, you choose a specific service, so you can actually use QuickBooks products and services catalog and you can have an overall one, or you can choose per each client which income account you’re going to use, which income service you’re going to use.

But since you can also use all of your products and services from QuickBooks when you’re using Knowify, you actually don’t need to have the default per job, but within each job you can create each line item using a different service, so you can really get down into granular detail of how this is going to be syncing with QuickBooks or each individual transaction.

Then we also have the ability to track classes and locations. You just set which one you want to use for each job. So, let’s say I have residential and commercial as my standard classes. We can set these so all of our different transactions use when they sync over to QuickBooks. And then is just for when we add new items to our products and services database in Knowify. This controls how we sync them as far as their default income and expense account goes. Plus if I enter an expense with one of these items, we’ll reference this expense account before we reference the expense account for the vendor, so that way we can get even more granular expense account reporting all the way down to the individual line of each expense.

What is the pricing for Knowify?

All of our pricing shown on the page is our base price. We do present the pricing for a yearly subscription here. We generally start people on a monthly account. That’s the starting price, but then if you need to add additional users since the account only comes as one, it’s $15 per user per month for a full access user. It’s $5 if they only need mobile access, so think for tracking time and entering purchases, images from the job site, comments from the job site… And then if you have a user that isn’t entering their own information but someone logs it for them, that’s a non-access user, $1 per user per month.

So what’s an example of a non-access user?

Some people will still prefer to have a foreman track time for all the employees, and so if the employees don’t actually need to log themselves in and out, you don’t need to spend $5 on them a month since they’re not actually getting access to the phone.

Are you ready to learn more about Knowify?

You can visit their site to request a demo or set up a free trial. You can also learn more about becoming a member of their Construction Company Advisor Network here.

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Cathy Iconis

Cathy Iconis, CPA is the creator and facilitator of the weekly tweetchat #QBOchat and the website QBOchat.com - a community for QuickBooks Online Users. She is also the founder of Iconis Group, an Intuit Top 20 Firm of the Future, that supports small businesses all over the United States with their bookkeeping needs. She is a five-time recipient of the prestigious CPA Practice Advisor 40 Under 40 Award, given annually to just 40 people nationwide.

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