There is a common misconception in roughly 20% of all contractors who believe "Making deep noises from the chest will be received by the bookkeeper as important messages from the contractor's brain" - Randalism.
It works for a short while until it doesn't. It is another example of the little boy who cried wolf too many times when there was no wolf, and after a while people stopped coming to help. Until one day there really was a wolf and the little boy did not get help in time because everybody thought it was another false alarm.
The underlying psychology is important. Most people are conditioned to help someone in need and especially in an emergency. The heart beats faster and the adrenaline starts to flow and energy is consumed at high rate of speed; however, this condition is like driving the family car on a race track as fast as it can go...it will only go a short while before it breaks.
Most bookkeepers are conditioned to be guardians of the financial health of a contractor's company and will do whatever the contractor asks them. Some contractors, roughly 20%, are conditioned to believe (Paradigm) that it's their duty to push for every last bit of production from every employee, subcontractor, supplier, vendor, professional services provider until they say no more.
The bookkeeper rarely says no, so the contractor thinks there is unused capacity and they continue piling on more and more work. See Contractor's Secretary Does Everything Including Bookkeeping.
Here Is What Happens When Contractors Overload Bookkeepers
QuickBooks setup is not streamlined which means they waste their time and your money entering transactions See Cost To Have A Bookkeeper In Your Office
Invoices to your customers are late, not prepared, lost or ignored
They hide documents and get angry when you ask too many questions about them
They only put in transactions that you are paying attention too
The shrink the Chart of Accounts to make data entry easier and faster
Lots of transactions are put in the wrong account which can increase taxes and make your reports inaccurate
Payroll is late because the timecards were incomplete, lost or late
Payroll tax reports filed late, overpaid or not filed at all and the contractor is unaware until it is too late
Sales tax reports are filed late, overpaid or not filed at all and the contractor is unaware until it is too late
Bills pile up and do not get into QuickBooks until they are overdue and vendors put the contractor on C.O.D.
Checks bounce because there is not enough time to reconcile QuickBooks with the bank statement
None of the financial reports make sense including The Key Performance Indicators
Eventually you end up with a Bad Bookkeeper who either quits or worse yet stays on your payroll and costs you more money than you will ever know until after your construction company goes bankrupt
Most contractors do not have a Construction Accounting System simply because they do not have $500,000+ to hire qualified construction accountants and project managers to set up a construction accounting office with proper infrastructure and maintain it. Let alone the resources to sift through resume's and applications to find someone with 10,000+ hours of practice and training that is required to become a Professional Construction Bookkeeper.
The Answer Is Simple
Do What You Do Best And Outsource The Rest
Let us help you and your bookkeeper by finding tasks your bookkeeper can do that will actually save you time and money and we can handle all of your contractor bookkeeping services remotely.
We work with a lot of contractors with annual sales between $0 - $5,000,000 and we have a Construction Accounting System complete with Professional Construction Accountants And Bookkeepersworking in a construction accounting office and the resources to handle most of your construction accounting, payroll, payroll tax reporting and key performance indicator reports.
QuickBooks Expert Specializing In Construction Bookkeeping Services
About The Author:
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 and QuickBooks For Contractors Expert. This combination of experience and skillsets 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 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.