Accurate Accounting for ETO Manufacturers

Integrate your ERP with your Accounting System

Your ERP should complement your accounting system; helping you balance costs and revenue on every project. They should also work together to provide meaningful insights (preferably in real-time).

When an ERP integrates with accounting systems like QuickBooks or Sage, it makes implementing your ERP easy. It’s also a relief for many organizations that have already started working with an accounting platform.

Custom Machine Builders need to keep their unique workflow in mind when shopping for both accounting and ERP systems.

The goals for implementing both systems are:

• to reduce redundant work such as double-entry on parts, or costs.
• to capture more precise data to improve quoting and estimates.
• to ensure accounts receivable and accounts payable are always working with accurate and current invoices.
• to have customized workflows that fit your team and business.

Which is Right for Your Team

Taking a closer look at the differences between job costing and project accounting, you’ll find there’s three areas that can help you decide which is best for your team.

1. Details

Job costing drills down to specifics, the level of individual jobs within a task. Such detail allows for precise cost allocation.

Project-based accounting focuses on a higher level of aggregation, capturing expenses and revenues across all jobs and tasks associated with that project. It’s a broader perspective.

2. Duration

Job costing is usually used for short-term or sometimes recurring jobs. Costs are accumulated throughout the job. When the new task begins, a new record of accounting begins.

Project-based accounting, however, can include short-term or longer, ongoing projects. Many Custom Machine Builders need this method because it allows for continuous monitoring of project finances.

3. Revenue Recognition

Some Custom Machine Builders don’t recognize revenue until they ship. Costs incurred go into a work-in-progress (WIP) asset account. Money accumulated here doesn’t leave the balance sheet until the project ships. Furthermore, some manufacturers might continue to wait until after the site acceptance test (SAT).

Some ETO manufacturers also prefer the percentage of completion (POC) method, in which expenses and revenue are recognized during the project. In this method, costs incurred usually don’t go to the balance sheet like in the above example. Instead, they’re included on the income statement as cost of goods sold (COGS).

Hil-Man Automation, from Michigan, specializes in building robotic production and assembly cells. They deliver with the highest level of quality and functionality. Their busy team gets more done in less time, thanks to Total ETO. Our ERP integrates with their accounting system, Quickbooks, improving efficiency, accuracy, and profitability.

Total ETO Is an ERP that Integrates with Accounting

1. Keep your existing accounting system.

2. Match AP invoices against received goods by supplier or PO’s to ensure you are paying for what you have.

3. Have payment milestones set up in your sales orders automatically trigger AR for invoicing. Meaning no invoices are missed!

4. Have customized workflows created to streamline T&M invoicing.

5. Create simple views of WIP and use existing details for percentage complete revenue recognition.

FAQs About ETO Accounting

1. Does Total ETO integrate with QuickBooks and other accounting systems?

Total ETO is an ERP that integrates with accounting. We offer seamless integration with QuickBooks, providing a tight link between the two systems. Your accounting data is automatically exported into QuickBooks to pay bills, collect receivables, and produce financial reports.

Total ETO also offers integration to many other accounting packages, including Sage 300 and 50, as well as linking to outside attendance and payroll service providers such as ADP.

Benefits to you:

• Use the best accounting systems available.
• Save time by not having to learn a new accounting system.
• Fewer mistakes as your accounting staff continues to use a familiar program.

2. Does Total ETO provide real-time job costing?

YES! Project managers need to be able to see real-time job costing and labor hours to manage their jobs effectively and to address any potential issues. Total ETO provides practical real-time job costing on many screens and reports, all showing the up-to-the-minute committed costs and labor totals for any project or job.

Benefits to you:

• Management will always have up-to-date real-time costs to compare vs estimate.
• This knowledge ensures that Management can react quickly if a project cost goes off course.
• No one is surprised by unknown increases in project costs.

3. What reports are available within the application?

There are plenty of perks when working with an MRP that integrates with accounting. Total ETO provides users with more than 200+ reports, all accessible from the ‘Report Center’, or from within the various modules themselves. Additionally, custom reports can be developed using Crystal Reports, and can be integrated right within Total ETO itself.

Benefits to you:

• Management has rapid access to all reports for timely information on projects.
• Staff can quickly find and run necessary reports without having to learn how to navigate the system.
• Daily report access ensures that you are on top of any issues within a project.