As a construction business owner, you must stay informed about your finances and financial situation. You do this through bookkeeping, the process of recording transactions in your business. This includes transactions, credit card charges, and any other economic activity within your company.

 

Financial management can easily be overlooked when managing projects, dealing with subcontractors, and ensuring customer satisfaction. However, neglecting proper bookkeeping can significantly impact the growth and success of your construction business.

 

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Topics: Bookkeeping For Electrical Contractors, Bookkeeping For Commercial Tenant Improvement Cont, Bookkeeping For Custom Home Builders, Bookkeeping For Remodel Contractors, Bookkeeping Needs, Bookkeeping For Plumbing Contractors, Bookkeeping, Construction Bookkeeping, Systems, Construction Systems And Processes

Managing a hectic schedule and complex projects can be challenging if you're a contractor. You must also ensure that your paperwork, documents, and contracts are in order. It's essential to keep a paper trail of your work and practice due diligence. 

Keeping all your working documents in order shows that you treat your business, customers, and subcontractors responsibly. This is a mark of professionalism and can also help if you have an insurance or legal claim.

Contractor paperwork documentation and procedures

You should develop documentation and record-keeping procedures appropriate for your contracting operation or service if necessary. Once procedures are in place, it is equally important to ensure everyone understands and follows them. 

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Topics: Construction Bookkeeping, Construction Bookkeeping And Accounting, Bookkeeper, contractor bookeeping services, Contractor Guidance

As a small business owner, you know that managing your finances is crucial to the success of your business. But with so many accounting principles and practices, it can be challenging to know where to start. That's where we come in! This guide will break down the essential accounting principles that every small construction business owner should know. We'll discuss how these principles can help you keep track of financial transactions, create accurate financial statements, and make informed decisions for your business. So, let's dive in, shall we?

Why Are Accounting Principles Important for Construction Businesses?

Accounting principles are the foundation for any successful business. They provide a uniform framework for recording and reporting financial transactions, ensuring consistency and accuracy in your financial records. By adhering to these principles, you'll be able to:

• Make better financial decisions based on accurate and reliable data
• Monitor your business's performance and identify areas for improvement
• Meet legal and regulatory requirements for financial reporting
• Build trust with investors, lenders, and other stakeholders

 

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Topics: Construction Bookkeeping, Construction Accounting, outsourced construction accounting and bookkeeping, Cost of Goods Sold Vs. Expense, Job Costing, COGS

How often have you hired someone with the expectation that they know how construction works, and then you found out they did not know about it? You are a master in the construction industry, so you recognize what to look for in your particular field and quickly observe if someone has the skillsets, and you proceed accordingly.

You know what happens when you send your best Rough Carpenter that you pay piece work for framing spec from the ground up in all kinds of weather and working conditions to install some custom-made cherry wood cabinets with gold plated pulls and knobs in the home of your best client (who happens to be in the wealthiest neighborhood in your town). It is not a pretty sight.

Have you pictured a crew with muddy work gear and boots stepping onto your client's pristine floors? The dirty secret is that Tax Accountants operate like Rough Carpenters because they work fast and furious, and they are paid piece work. The main difference is that they earn the bulk of their annual income in three and a half months. This means they do not waste any time going through your receipts to ensure you get all the deductions you are entitled to.

 

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Topics: CPA Vs Construction Accountant, When Contractors Need A CPA, Construction Bookkeeping, Construction Bookkeeping And Accounting, Construction Accountant Who Listens, CPA, Contractor Tips

Small business owners spend an average of eight hours monthly performing payroll functions. That's 12 business days a year that could be spent generating sales, prospecting new business opportunities, improving products or services, or servicing customers.

Upgrading or changing your payroll system comes with a ton of attractive benefits. Saving time and money, making everyone's account more manageable, and better integration are all excellent reasons to consider a change.

But if the switch is mishandled, the results can be catastrophic and lead to long-lasting problems. Read on for tips on avoiding a disastrous payroll system migration.

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Topics: QuickBooks For Contractors, Construction Bookkeeping, Business Process Management For Contractors, Construction Project Managers, Construction Project Managment, Project Management, Project Management For Construction

In the past, Construction Project Managers were laborers or served an apprenticeship in one of the skilled construction trades and were promoted to foreman. This meant many people were more comfortable in manual labor without management skills. And when "things" were put in charge of "people," the results were not usually favorable.

Because of this, many construction companies failed and went out of business due to the Cost of Chaos in their businesses. And it is still happening today.

In the late 20th century, construction and construction management were separated into individual disciplines, each with its methodologies, terms, and definitions.

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Topics: QuickBooks For Contractors, Construction Bookkeeping, Business Process Management For Contractors, Construction Project Managers, Construction Project Managment, Project Management, Project Management For Construction

Doing something different is hard. Do you feel like everyone else is the most brilliant person in the room, and you just don't get it? Getting into a rut and repeatedly doing the same things is easy.

 

If those things work, then yes, continue to do them repeatedly. The problem is when something is not working, and you continue down the same path expecting a different result. The opposite of too much change can create another form of chaos. How do you know what is broken if you change a zillion things all at once?

 

Looking for ways to make your job easier is the goal of all construction contractors. The last thing you want to hear from your staff or a trade contractor is, "Do you want me to do that over?" Your answer is "No!" (thundered, with many extra words). What you expected was that your staff did it correctly the first time.

 

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Topics: Construction Bookkeeping, Construction Accounting, Construction Bookkeeping And Accounting, Contractor Tips, Accounts Payable For Contractors, Accounts Payable

A new contractor meets an experienced customer, and money changes hands and not the way you expect it.

 

Typically, this is what happens when you first get started: You bid on a project, and you are the low bidder. You are given the client's standard contract, which contains the client's favorite set of commercial terms and conditions, to sign as a condition of getting the project. You close and sign the contract because you don't want to ask for changes in the terms or consult your construction attorney. You put the signed contract in your bottom desk drawer and pray hard nothing will happen during the project that will cause you ever to have to reread the contract.

 

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Topics: Construction Bookkeeping, Processes, Contractor Challenges, Contractor, contractor bookeeping services, Contractor Tips

Owning a construction business means you understand that bookkeeping is just one of those mundane, nasty, dirty, aggravating, grubby little chores you get stuck with along with its rotten scoundrel cousin the Monthly/Quarterly Tax Reports. 

If you have employees - look out! On top of everything else you have payroll to process, in some cases, you may decide to provide cash advances to your employees to keep them focused on the job and not on personal issues, and finally there are all the Payroll Taxes you need to keep track of and file the reports for on a regular basis.

Smart Contractors know their time is more valuable spent meeting prospective clients, putting together bids, managing job sites, and a whole lot of other things other than bookkeeping. So they find someone else to do it. 

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Topics: Construction Bookkeeping, Processes, Contractor Challenges, Contractor, contractor bookeeping services, Contractor Tips

Owners of small construction companies like you are the men and women who keep everything moving in the right direction. When the economy changes, you quickly adapt because you are a survivor, not a large giant behemoth dinosaur unable to respond promptly and dies in its tracks.

 

Most articles about Job Costing are for large contractors with dozens of employees, doing millions of dollars in sales every year. This article is not about them; it is about you!

 

Job Costing links the money you spent on a job against the money you received to do a particular job.

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Topics: Construction Bookkeeping, Processes, Contractor Challenges, Contractor, contractor bookeeping services, Contractor Tips