Master Builder Constructs a CPA Base


By Carly Lombardo

Intuit's evolving Master Builder professional program helps construction firms and accountants work together to offer estimating, scheduling, billing, and full accounting.

The software "does everything but hammer the nails," claims Dan Smith, creator of Master Builder and vice president of Intuit’s newly-organized Construction Business Solutions group.

Partner Insights

The new business unit is taking steps to increase Master Builder’s exposure in the accounting profession. Most recently, it has entered into a partnership with Construction Industry CPAs/Consultants (CICPAC), a national not-for-profit association of CPA firms that specialize in providing financial services and consulting to construction companies. The two entities will work together to recruit independent financial experts to serve the construction industry’s financial and business management needs.

"Intuit is committed to the construction industry and committed to working with accountants, making this alliance an ideal match. CICPAC member firms deliver the expertise and caliber of service we want to offer our customers," notes Smith.

Last year, Mountain View, Calif.-based Intuit acquired OmWare, maker of Master Builder, for $46.1 million. OmWare, headquartered in neighboring Santa Rosa, has been serving the construction industry for more than 20 years. It currently has 120 employees, ten regional offices, and approximately 500 Professional Advisors and Solution Providers. While OmWare’s revenues were not disclosed, Intuit’s form 10-K shows that vertical market operations, principally Master Builder, had $14.7 million in revenue, 60.5 percent from new licenses, for November 2001 through July 31.

"As a small company, the marriage of the two companies brings us resources we never had before. We are now able to utilize Intuit’s usability groups to improve the product from the customer’s perspective," says Smith.

Master Builder organizes construction processes into four steps—estimating, production, accounting, and analysis—and then identifies and automates each task. It includes General Ledger, Accounts Receivable, Accounts Payable, Job Costing and Reporting, Scheduling, Purchase Orders, Subcontracts, Change Orders, Payroll, and Billing. Master Builder’s sweet spot is mid-market companies with annual revenue from $1 million to $5 million.

"The construction industry is diverse, and contractors have different needs depending on the work they do and the size of the company. Master Builder solves complex tasks inherent to the business," comments Smith.

Delivering Expert Services

Accountants have two Master Builder programs to choose from, Professional Advisors and Solution Providers.

In January, Intuit launched the Professional Advisors Program. There are now about 500 members, about 40 percent of these are CPA firms, and Intuit wants to have another 100 in the field within the next year.

If only one person at the CPA firm is certified to sell and implement Master Builder, Smith insists that person remains actively engaged with promoting Master Builder even through tax season. "We don’t want to have to re-teach people. We want them to be focused on the construction industry, and stay focused," he says.

Advisors, who join for $1,495, must complete a three-day workshop on core accounting, project management, and standard payroll. They also must take certification tests in accounting, job costing, and standard payroll.

Advisors receive a not-for-resale copy of Intuit Master Builder and regular product updates and enhancements, and toll-free tech support. Pro Advisors also get training and consulting referrals from Intuit.

The Solution Provider program, begun in August, is geared toward CPAs and consultants who have active sales and marketing programs. The main difference between Pro Advisors and Solution Providers is that the latter are focused on active sales and marketing, while the Pro Advisors are focused more on service, training, and implementation. There were 30 Solution Providers as of late October, and plans call for adding at least 50 more by year-end.

Solution Providers receive the same benefits as Pro Advisors, but also get sales and marketing tools, such as collateral literature, sales training, and sales leads. Solution Provider margins are based on sales volume and range from 30 percent to 50 percent. The Annual Support and Service Fees for both programs range from $1,000 to $2,500 per company, per year depending on the number of advisors, sales people, or IT staff.

Intuit has also implemented an Internet-based service, the Master Builder Live Advice Center, similar to its Live Tax Advice Center for tax practitioners and their potential clients. On the Master Builder Live Advice Center customers are able to seek advice from accountants via e-mail or phone. Customer can select accounting advisors based on geographic location, subject matter expertise, and background.

Accountants can post their own fees, schedule, and means of interaction with their clients. The center automatically collects the accountant’s fee after completion of a transaction.

And, it allows accountants to choose one-time, incremental business opportunities or to pursue long-term business relationships by assisting the same client over an extended period of time.

Ushijima: Bringing Order to Construction Numbers

A custom homebuilder served by Steve Ushijima had grown from $2 million to $10 million in annual revenue in three years. Yet, the company still used a combination of QuickBooks, Excel, and an outside payroll service to keep track of project and overhead costs

With the data scattered, it took several hours just to compile a job cost report or progress billing for a single project. With 15 to 20 jobs going on simultaneously, the client had to dedicate one employee to virtually do nothing but prepare billings for their clients and reports for the owners.

"The principals knew the company was making money overall, but often had to wait until the project was completed to accurately determine the profitability of a particular job," says Ushijima, a CPA and owner of Abacus Consulting. "Often they found they lost money in certain areas, and had overpaid certain subcontractors and vendors. Because these mistakes were not identified on a timely basis, the same mistakes were also reflected in their current bid figures for new work. They needed to take control of their business by becoming proactive instead of reactive."

Ushijima, a Pro Advisor, now has 50 percent of the clients of his Redondo Beach, Calif.-based firm using Master Builder. More importantly, about 75 percent of his new business comes from the program. Abacus provides accounting, financial and business management assistance to the real estate, construction, and recycling industries.

For Ushijima, the main benefits of being an Intuit Master Builder Pro Advisor are a significant increase in business from training and consulting referrals from Intuit and Solution Providers or from his company’s listing in the Intuit Master Builder Pro Advisor directory.

Ushijima, whose typical billing rate is $90 to $100 an hour, implemented a comprehensive training program to teach the company’s project accountant the system’s capabilities.

"I designed a program to incorporate most of their existing procedures with new ones such as standardized cost codes and a standardized coding system for their job costs," says Ushijima. "We assigned predetermined ‘default’ account codes to each subcontractor and vendor to minimize the miscoding of invoices. The plan was to use Master Builder to monitor and manage all new projects."

In fact, the client was so pleased that they have engaged Ushijima to train several other members of their staff on Master Builder’s estimating and scheduling capabilities.

Carly Lombardo is Associate Editor of Accounting Technology and can be reached at .

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