It’s OK To Be A Small Contractor
With So Much Discussion - About employees, payroll and payroll taxes; you may feel that you are missing out by not hiring lots of employees. Reality is that as a small business owner you DO NOT HAVE to hire employees.
To Hire Or Not Hire - Employees is one of the few optional things where the business owner gets to choose, change their mind and/or change direction as needed.
Hiring, Maintaining And Feeding - Employees is not the measure of success. Owner-Operators can open his or her business and do all the work themselves.
You May Ask Yourself – What work? This can be everything from estimating, doing the construction work, creating invoices, collecting money, paying bills and having a little bit of money left over. Your goal is to have more of everything than you would be by remaining an employee.
Is There Another Way? - Yes, the next way is outsource the majority of the mundane low value tasks that take time away from what you are skilled in doing. As the owner you can use that time to meet with clients, create estimates, collect money, pay bills and have a little left over.
What About The Physical Work? - It needs to be done by somebody, who will do it? Outsourced labor can be handled several ways:
Hire Sub-contractors to do the work
Use a staffing agency like Madden Industrial Craftsmen, Inc (for a larger projects scheduled projects from several days to weeks to complete)
Labor Ready (for smaller projects usually few days here and there).
Staffing Agencies typically provide your company their employees who are screened and have worker’s compensation and all federal, state and local taxes included as part of the rate charged.
Know The Rules - The Washington Department of Labor and Industry classifies anyone working on the job differently and it changes so we recommend you check with them for the latest updates:
A Licensed Contractor
An Employee of a Licensed Contractor
Licensed contractor and their employees may be under the category of outsourced labor
We recommend you check with Department of Labor and Industries for the most current updates
Employees Acting As Outside - Sales representative are almost always classified as a direct hire employee. It is all about the rules. Internal Revenue Service has a formal definition of an employee. Why? It's all about who owes and is responsible for the Federal payroll taxes.
For Employees - There are automatically some additional state payroll taxes plus depending on the location of your business there may be a local head tax based on number of employees or your employee’s gross wages.
Another Point Of View - From your company’s perspective; do you really want your outside sales rep’s and estimators (working as independent contractors) bidding projects for you and then bidding that same exact project for your competitor? It is hard for anyone to “un-know” the details of your bid, bidding process, unique competitive edge.
A Professional Estimating Service - May be the right answer because they are “Professional’s” who act in a similar fiduciary capacity as other such as your Construction Accountant or lawyer.
Each State Has Its Own Set Of Rules - On who must be licensed, pay additional state and local taxes.
Washington State - Depending on the rules and regulations business professionals may be required to pay business & occupation tax to the Department of Revenue. The List changes on a regular basis. Hello Future Client - Yes, it’s ok to be small we can help your business to be more efficient.
There Is No Such Thing - As being “Too Small”. Many of our clients are one man or woman bands with an idea and the desire to be in business for themselves.
Our Clients Include Not Just Contractors - We serve busy professionals and independent contractors who want someone else to deal with the paperwork so they can do “The Fun Stuff” which is what they do best.
Our Primary Niche Is - Construction Accounting and Bookkeeping Services For Contractors; as businesses in the construction industry have many of the special needs outlined below.
Who Is Our Ideal Construction Client?
New And Seasoned - Small Contractors in Service and Repair, Residential, Commercial, Remodel and Home Building Who Need Bookkeeping, Invoicing (Including variations of: Flat-Rate, Not To Exceed, Time & Material And Cost Plus), Sales Tax Reports, Payroll Processing, Payroll Tax Reports, Job Deposits, Work-In-Progress, WIP, Retention, Pay Applications Residential, Pay Applications Commercial, Insurance Audits and/or Business Processes. We know What To Do!
For The “Best Value” We Use “Flat Rate” Pricing Whenever Possible.
QuickBooks Expert Specializing In Construction Bookkeeping Services
About The Author:
Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. http://www.fasteasyaccounting.com/sharie-dehart/