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The Nine Steps To Construction Bookkeeping And Accounting

Posted by Randal DeHart on Wed, Nov 09, 2011

Contractors Bookkeeping Services Nine Steps

Construction Bookkeeping Services - Is something you understand then learn. Hundreds of people have told us how easy QuickBooks is to use and how hard QuickBooks for Contractors is to use and that is so true!










Operating A Backhoe - Is easy too! I found out just how easy it is to find underground utilities and bring them to the surface with the greatest of ease like the daring young man flying man on the trapeze. A gentle tug on a lever and water was gushing everywhere! It was very entertaining and extremely costly!

This Is Lucy's* Story - One day she answered an employment ad from a general contractor, Bruno Brickman*, who was looking for a cheap bookkeeper who understood construction bookkeeping services and accounting and knew how to use QuickBooks For Contractors to get him the QuickBooks financial reports and Job Costing Reports he needed to operate and grow his construction company. She could get for $15.00 an hour for 10 hours a week. Lucy has a good heart and wants to do her best so she contacted us and I invested an hour of my time to share a quick overview of what I call the Nine Steps.

*The names have been changed

A Short While Later - I stopped by to see how everything was going for Lucy and her employer. We reviewed the Nine Steps to see how she was using what she had learned. 

Step #1 Sort Paper Into Manageable Piles And Be Quick About It!

Lucy Was Not Paying Close Attention - To the contractors, construction workers, USPS mail carrier, shipping and receiving clerks, warehouse workers and other folks that stopped by her desk to leave a few pieces of paper for her to deal with. Always remember the ocean is a collection of drops of water. The piles of paperwork were growing high and wide.

Step #2 Simple Data Entry

After The Sorting - Was done Lucy was having fun putting in checks, bills and simple invoices because that it is easy.

Step #3 Payroll And Tax Reporting

Payroll And Tax Reporting - Can bring out the worst in people as Lucy soon discovered. In fact some of the other employees suggested she was ready to bite the next person who turned their timecard in late and expected to get paid on time.

Step #4 Reconcile Bank & Supplier Statements

Reconciling Statements - Was something Lucy could not understand during our brief chat and she had not done anything to learn about it since then either. It seemed to Lucy that reconciliations were just a waste of time and busy work.

When Checks Started - Bouncing and suppliers were being paid twice for the same bills Bruno got concerned and invited his outside QuickBooks expert and construction accounting and bookkeeping services specialist, Randal, to come to the office and train Lucy how to reconcile bank, credit card and vendor statements. 

After 20 hours - Of attempting to condense the most important parts of a 10,000 construction accounting services skill sets that Lucy needed to be useful in her position of contractors bookkeeping services over a 5 day period at $150 per hour totaling $3,000 Lucy had just enough training to do the reconciliation part of the job. 

Randal's Patience Were Wearing Thin - Because Lucy talked, argued and wanted to continually tell Randal how different things were at her previous job, where the general contractor went bankrupt.

Lucy remembered how nice it was to have plenty of time to shop online, surf the web, text her friends and train her boss like an organ grinder trains a monkey. Lucy wanted to talk endlessly about how stupid and ignorant her previous boss was and how he did not know anything about running a construction company. And if he would have listened to Lucy he never would have gone bankrupt. In fact she posted a running commentary on Facebook and described in detail how incompetent her previous boss was and how she knew the construction company was going bankrupt. Randal just ignored it and continued training her in construction bookkeeping services.

It Was Obvious - Lucy needed a lot more training; however, Bruno was not about to spend any more money on any direct training. Unfortunately Bruno continued paying for training in the form of bounced checks, missed quarterly tax returns and payments which lead to costly penalties and interest, lost early payment discounts and other expensive mistakes.

During The Quarterly Construction Bookkeeping Services ReviewRandal showed Bruno a production report that revealed the cost of having Lucy on the payroll for twelve weeks was in excess of $1,000.00 a week when Bruno had expected to only spend $150.00 a week plus a little money for payroll taxes and overhead. Bruno was not a happy construction company owner.

Fast Easy Accounting Asks Can You Aford Not To Hire Us

Step #5 Complex Journal Entries

Bruno Was Surprised - To learn that complex journal entries like entering a HUD-1 statements and complex Payment Applications similar to the G702 and G703 format was something else Lucy knew absolutely nothing about.

Lucy Refused - To put up with any more training from Randal because decided those things were not in her contractors bookkeeping services job description.

When A Contractors Bookkeeper - Refuses to do something related to the construction bookkeeping services and the accounting functions of the construction company it is usually a sign of bad bookkeeper traits Bruno would have saved a lot of time, money and heartache if he had simply paid attention.

Bruno Outsourced - The complex journal entries, HUD-1 Statements and complex payment applications to Fast Easy Accounting because the construction bookkeeping services work needed to be done right and on time.

Step #6 Prepare Tax Reports

Lucy Had Filed - The Payroll quarterly tax return at her previous job, not always on time. She would eventually get around to doing them eventually so Bruno left her alone to do them.

Step #7 Key Performance Indicators

The KPIKey Performance Indicators are simply five reports take five minutes and they give the construction company owner a snap shot of how the business is doing financially and taken seriously can lead to some serious cash flow coming into their business, and staying there.

They Are - Cash Available / Accounts Receivable / Accounts Payable / Profit And Loss / Balance Sheet as shown below:  For more detail click here

The Five Key Reports Every Contractor Needs

Bruno Asked Lucy - To prepare and print the Five Key Performance Indicators and have them on his desk every day by five PM; unfortunately Lucy had more important things to do which involved Facebook so when Bruno asked about them she would get upset and a bit angry then remind Bruno about some other pressing problem he needed to handle (see bookkeepers train their boss like an organ grinder trains a monkey). (After a while Bruno was trained to quit asking.

Step #7 B No Key Performance Indicators

Bruno Got A Call - From a friendly competitor who said he was going bankrupt and asked if Bruno wanted to buy any of his tools and equipment before the auction. Bruno asked what happened and the fellow mumbled something about a bad bookkeeper took some money, unfiled and overdue taxes, material suppliers cut him off for not paying his bills, his employees quit because their payroll checks bounced and they took a bunch of tools and equipment to the pawn shop and the Washington State Department of Labor and Industries was getting ready to audit him for non-payment.

Step #8 The 5x5 Business Stabilizers

Bruno Remembered - Reading an article titled The General Contractor And The River Of Construction Commerce and there was something about the five key reports in it and some other information that he could review because he certainly did not want his construction company going bankrupt!

Step #9 Good Bookkeeping Leads To Informed Decisions 

Bruno Found - A Construction Bookkeeping services and Accounting firm that offered a Business Process Management System (BPM) for construction companies and got his business on track.

Lucy Found Employment - With a smaller construction company at lower hourly pay and more hours. She had to use her car to run errands, get coffee for the boss in addition to being attempting to perform the duties of a contractors bookkeeping services specialist. When nobody was watching she shopped and played games on the internet, updated her Facebook page and other social media sites, instant messaged her friends and talked with them for hours on her cell phone.

All is well that ends well and everybody went home happy!

For Construction Company Owners who do not need the full power of QuickBooks for contractors and want 24/7 online access we offer Xero Accounting Online and we have custom setup for construction companies. Click Here For More.

This Is One More Example of how Fast Easy Accounting is helping construction company owners just like you put more money in the bank to operate and grow your construction company. Construction accounting is not rocket science; it is a lot harder than that and a lot more valuable to people like you and me so stop missing out! Call Sharie 206-361-3950 or sharie@fasteasyaccounting.com and schedule your no charge one-hour consultation

accounting  consultation

Profitable Contractors and Construction Company owners have known about the value of outsourced bookkeeping services and contractor coaching services like ours for a long time and now you know about it too! 

We Scan Your Receipts And Invoices link the appropriate transactions to QuickBooks or Xero Accounting Online depending on the construction accounting service you are using and provide ongoing Cloud Based Contractors Bookkeeping Services by accountants who understand construction.

Thinking About Outsourcing Your Contractors Bookkeeping Services To Save Time And Money?

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About The Author:

Randal DeHart, PMP, QPA The Construction Accountant Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, QuickBooks For Contractors Expert and Xero Accounting Specialist. This combination of experience and skill sets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and construction accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and Xero accountants to the benefit of all of the construction contractors he serves across the USA. Visit http://www.fasteasyaccounting.com/randal-dehart/ to learn more.

Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Check out our Contractor Success Map Podcast on iTunes and Follow Randal on Google+

Topics: Nine Steps To Construction Accounting, Bookkeeping Services, QuickBooks For Contractors, Construction Bookkeeping, Business Process Management For Contractors, QuickBooks, Accounting, Bookkeeper

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