Construction Company Bookkeeping For Contractors All Across The USA Including Alaska And Hawaii

Construction Company Cost Library

Written by Randal DeHart | Sat, Mar 21, 2015

A Cost Library Is Another Secret Successful Contractors Use

To Generate Enormous Positive Cash Flow And Profit

Money doesn't grow on trees; it grows inside your properly setup QuickBooks file that is maintained by people who understand construction accounting. All you have to do is follow the Contractors Success M.A.P. and in due time you can become wealthy. This article is going to cover one of the secrets we share with consulting clients known as The Cost Library. 

A cost library is used to develop construction estimates and there are three basic types of cost libraries contractors use:

  • Heuristics - And experience is the most common method since they are essentially shortcuts that reduce the mental energy or cognitive load of making a decision. Contractors also call them Rule of Thumb, SWAG - (Silly Wild All-Encompassing Guess), Past Experience, Intuitive Judgment or common sense.
  • Excel Spreadsheets - Most common among contractors who have made and lost a lot of money using heuristics. These are normally put together over several years of painful losses followed by more and more painful losses. Contractors will spend a bit of time trying to figure out Job Costing and Job Profitability by generating QuickBooks reports. If their QuickBooks setup was done by someone who truly understands construction accounting vs. regular accounting then they have a decent system and are likely earning over $100K a year.
  • Cost Library - Is built on the Excel spreadsheets mentioned above with one HUGE DIFFERENCE. It takes a holistic approach to the contractor's company by adding the Contractors Success M.A.P. of Marketing + Accounting + Production.

See Contracting In A New Light

Two Sample Remodel Contractors - Each operating in the same geographical area with similar size crews doing roughly the same type of work for homeowners with similar demographic and psychographic profiles.

Contractor #1 Has A Business Plan - And focuses on activities that have the highest likely hood of generating a quick result. The 80 20 rule for construction company owners. They work closely with their business coach to continually update, develop and implement their custom strategy. They needed a business coach who gets his hands dirty, not just a idea people with education and no experience owning an operating contracting companies but an implementation people who have been where you are understands what you need and can teach you how to do it right including The Five Key Performance Indicators.

There Is Duality In QuickBooks Reports

What You See And What You Don't See

What Do You See - When you look at the two Profit & Loss reports above?

Most Contractors See Two Things:

  1. Income is close to the same for each contractor

  2. Net profit is over twice as high for contractor #1 as it is for contractor #2

What You May Have Missed - Are the dozens of things contractor #1 has done to lower the Direct Construction Costs and outsource the bookkeeping services which have resulted in more efficient operations.

Not sure where to go from here?

Let us help you craft your own unique program just for your contracting company and help you gain clarity on how to set your business up to create a 6 Figure income Click Button Below For Your Contractors Success M.A.P. Strategy Session

We Remove Contractor's Unique Paperwork Frustrations

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 all across the USA including Alaska and Hawaii 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 so stop missing out! Call Sharie 206-361-3950 or sharie@fasteasyaccounting.com and schedule your no charge one-hour 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.

Our Contractor Bookkeeping Services System Is A System

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

Click On The Button Below To Download A Free Guide 

Business Process Management (BPM) For Contractors

Need Help Now?

Call Sharie 206-361-3950

sharie@fasteasyaccounting.com

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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, 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+