Internal commitments across divisions

When your own HVAC or dirt-work division does the scope, its agreed price becomes the job's cost — locked at acceptance, with the division's real margin and the company's consolidated profit beside it, and never posted to QuickBooks as a fake bill or sale.

The operating system built exclusively for post-frame and barndominium builders.

Part of The Money Trail
What it is

Barndominium builders with an in-house HVAC or dirt-work division price that work to themselves. The division bids from its own cost and a target margin; the builder accepts, and that agreed price is the job's cost for the scope. Only an approved change order or correction moves it. The division's actual costs set the division's margin; the builder's margin is the client price less the agreed price; and the company view is client revenue less actual cost — the internal price cancels out, so it is never counted as a sale or an expense. Built exclusively for post-frame and barndominium builders, on the Accounting tab, and off until an account turns it on.

Also called: internal subcontract · in-house division · intracompany · division margin · transfer price · self-perform trade · agreed internal price · consolidated profit

See it, piece by piece
01

The agreed price is the job's cost — the division's overrun stays the division's

Try it

The division enters its own cost estimate and target margin, and the bid is cost ÷ (1 − margin): $5,000 at 25% is $6,666.67. Once the builder accepts it on the job's Trades section, that price is what the job budgets for the scope. When the division books an extra day and its costs reach $5,500, its margin falls from $1,666.67 to $1,166.67 — the builder's $6,666.67 doesn't move. Explain walks every step with that job's own numbers.

How HVAC — 4-ton heat pump, ducted adds up
Ridgeline Mechanical & Dirt’s costs booked to this job

How HVAC — 4-ton heat pump, ducted adds up

  1. 1. Ridgeline Mechanical & Dirt estimates its cost$5,000.00
    labor + materials, the division's own estimate
  2. 2. Ridgeline Mechanical & Dirt bids at a 25% target margin$6,666.67
    $5,000.00 ÷ (1 − 25%)
  3. 3. Ridgeline Builders accepts — the agreed price is the job's cost for this scope$6,666.67
    locked once accepted
    Only an approved change order or correction moves it. The division's overruns never do.
  4. 4. Ridgeline Builders prices the scope to the client$8,333.33
    about a 20% margin on $6,666.67
  5. 5. Ridgeline Mechanical & Dirt's actual cost so far$5,500.00
    labor, material and equipment booked to this job
  6. 6. Ridgeline Mechanical & Dirt's margin$1,166.67
    $6,666.67 − $5,500.00
  7. 7. Ridgeline Builders's margin$1,666.66
    $8,333.33 − $6,666.67
  8. 8. The company as a whole$2,833.33
    $8,333.33 client revenue − $5,500.00 actual cost
    The $6,666.67 internal price is a sale for one division and a cost for the other — they cancel, so it's never a sale or an expense of the company.
  9. 9. What reaches QuickBooks
    the client invoice once · Ridgeline Mechanical & Dirt's real costs once · the $6,666.67 internal price never
Switch the division's booked costs: its margin moves, the builder's $6,666.67 stays put. Real screen · sample data.
Without it

The HVAC crew ran a day over and the barndo's job cost quietly went up with it.

Why we built it

The builder can budget against a number that holds, and the division manager is measured against the estimate he gave — not against whatever the builder later charged the client.

Sound familiar?“our HVAC division bills the builder side and it doubles our revenue”
02

Only an approved revision moves it

Try it

After acceptance the price reads Agreed · locked. When the scope really changes — a mini-split added for the shop — an admin records an Approved revision: a Change order or a Correction, the new price and why. The row keeps the original ("1 revision, was $6,666.67"), and the client price for the scope follows when it's set as a margin. It works the same way as a change order on the customer's side: written down, approved, kept.

Approved revision — HVAC package
26-BROOKS-001 · Tyler & Kara Brooks — 40×60 Barndominium
HVAC — 4-ton heat pump, ductedRidgeline Mechanical & DirtAgreed · locked
Agreed
$6,666.67
Client price
$8,333.33
Division actual
$5,500.00
Division margin
$1,166.67
Ridgeline Builders margin
$1,666.66
Company
$2,833.33
HVAC — 4-ton heat pump, ducted

Approved revision

The agreed price is locked at $6,666.67. A revision is recorded with who approved it and why; the old price stays in the history.

Save the change order: the locked price moves and the row remembers what it was. Real screen · sample data.
Without it

The internal price kept changing after the builder had already budgeted the job.

Why we built it

A price that only moves on an approved reason is one both divisions can trust, and the history answers "why is HVAC $800 more?" without a meeting.

Sound familiar?“I can't tell if the in-house trade made money on the job”
03

Division, builder and company — three margins that add up

Try it

Accounting → Divisions shows each in-house division's margin (agreed prices less its real costs), the builder's margin on in-house work (client prices less the agreed prices) and Company (consolidated) — client revenue less real cost, with the internal price left out because one division's sale is the other's cost. Below, In-house work by project lists every package with all six figures side by side. The job's job cost counts the scope at its agreed price and leaves out any purchase order for it, so nothing counts twice.

Accounting — Divisions

Each in-house division’s margin on the work it does for your jobs, and the company’s — with the internal price left out, so nothing is counted twice.

Ridgeline Mechanical & Dirt
$4,187
agreed $20,017 − actual $15,830 · 20.9%
Ridgeline Builders on in-house work
$4,434
client $24,451 − agreed $20,017
Company (consolidated)
$8,621
client revenue $24,451 − actual cost $15,830

In-house work by project

26-BROOKS-001 · Tyler & Kara Brooks — 40×60 Barndominium
HVAC — 4-ton heat pump, ductedRidgeline Mechanical & DirtAgreed · locked
Agreed
$6,666.67
Client price
$8,333.33
Division actual
$5,500.00
Division margin
$1,166.67
Ridgeline Builders margin
$1,666.66
Company
$2,833.33
Pad, driveway base & septic trenchRidgeline Mechanical & DirtAgreed · locked
Agreed
$7,750.00
Client price
$9,117.65
Division actual
$6,350.00
Division margin
$1,400.00
Ridgeline Builders margin
$1,367.65
Company
$2,767.65
26-MARSH-004 · Caleb & Jenna Marsh — 30×50 Barndominium
HVAC — 3-ton heat pump + ERVRidgeline Mechanical & DirtAgreed · locked
Agreed
$5,600.00
Client price
$7,000.00
Division actual
$3,980.00
Division margin
$1,620.00
Ridgeline Builders margin
$1,400.00
Company
$3,020.00
Open Explain on any package for its steps. Real screen · sample data.
Without it

Division profit, job profit and the company's books never added up to the same number.

Why we built it

The owner sees the one profit number the accountant will see, and each manager sees his own — and the three reconcile to the cent.

Sound familiar?“the internal price keeps changing after we budgeted it”
04

Never a QuickBooks bill or sale

A hard rule sits under every push to QuickBooks: anything tied to an in-house package, a vendor that is one of your own divisions, or a vendor merely named like one, never becomes a QuickBooks bill or bill payment. QuickBooks gets the client's invoice once and the division's real costs once, and reads the division's costs back by its Class and the job — see QuickBooks integration.

Without it

Someone set up the HVAC division as a vendor in QuickBooks, and every internal job doubled the books.

Why we built it

Posting the internal price as a bill and a sale inflates revenue and expense on every job; the rule makes it impossible rather than something to remember.

How it works
  1. 1The division enters its cost estimate and target margin; the bid is cost ÷ (1 − margin) — $5,000 at 25% is $6,666.67.
  2. 2Once the builder accepts, the agreed price is locked; an admin-approved revision (change order or correction, with a reason) is the only way it moves.
  3. 3The division's actual costs come in by hand, from a CSV, or read from QuickBooks by the division's Class and the job.
  4. 4Division margin = agreed price − actual cost; builder margin = client price − agreed price; company = client price − actual cost.
  5. 5If the division's costs rise from $5,000 to $5,500, its margin falls to $1,166.67 — the builder's $6,666.67 doesn't move.
  6. 6Explain on any package walks each step with that job's real numbers.
  7. 7The job's Budget & margin card counts the scope at its agreed price and leaves out any purchase order for it, so nothing counts twice.
  8. 8A hard rule keeps it out of the books: anything tied to an in-house package, or a vendor that is one of your own divisions, never becomes a QuickBooks bill or bill payment.
Why we built it

When one company runs two divisions on one set of books, posting the internal price as a vendor bill or a sale overstates revenue and expense on every job — and the division manager still can't see whether his crew made money. Builders end up keeping a spreadsheet beside the accounting system to track what the in-house trade was promised versus what it spent. So the agreed price lives where the job is run, as a commitment that never reaches the ledger. The builder budgets a price that only moves through an approved change; the division is measured against its own estimate; and the owner sees one consolidated number with the internal price left out — the way the accountant will see it.

The problem
  • Internal prices posted as real bills and sales, inflating revenue and expense.
  • A division's overrun silently changing the builder's job cost.
  • No record of what an in-house division was promised versus what it spent.
  • Division margin, builder margin and company profit that don't reconcile.
What you get
The builder's budget holds at the agreed price.
Each division measured against its own estimate.
Consolidated profit with the internal price left out.
Nothing internal ever posted to QuickBooks.
ACCOUNTING

See internal commitments across divisions
on one of your own jobs.

Thirty minutes with Keith — your building, your numbers. Bring the job where “our HVAC division bills the builder side and it doubles our revenue” — we will show you exactly where that stops.

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Internal commitments across divisions — Leads2Build