A significant part of our business requires us to do Flashing. Flashing should be over any piece of trim that runs horizontal. As stated in the title of this post. Caulking should never take the place of flashing! Its not a matter of if, but when its going to fail, and when it does fail, its going to exacerbate any underlying issue. This is a very common issue with painters trying to replace wood rot. Painters believe that they can just apply a piece of trim over the rotten siding at the bottom of a house and caulk it. Even worse yet at the middle sections of a two story home, where the seams meet on panel siding. This goes against every siding manufacture warranty. You are better off not doing anything, because at least the siding will be able to dry out.

WHEN SHOULD FLASHING BE USED?

Skirt boards and band boards are a good way to deal with the rot issues at the bottom of panel siding. Trim boards that are used for the purpose of band-boards need to be installed correctly. All siding manufactures require this to be compliant with their warranty. Flashing should be on all horizontal protrusion of any structure. Windows, Doors, and Roof lines is where you would commonly find or see flashing. One unnoticed area where flashing should be that we find is usually not the case is the deck. The  Leger board that supports a deck on the house is the most overlooked and arguably  the most important. Most decking boards go up the siding of a structure anywhere from 1 to 2 inches above the ledger board. The fact that the decking boards hide that much of the siding is the reason rotten siding above the ledger board leads to problematic water intrusion that goes unchecked.  With out proper deck-flashing, it will cause significant-costly damage. 

What it boils down to is that flashing is one of the least expensive components to the 

exterior of your house and offers the most protection. If you must cut cost, cut them elsewhere.