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Construction Accounting Concepts You Can Benefit From Today

Posted by Sharie DeHart on Fri, Jun 16, 2023

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

The Difference Between A Construction Accountant And A Tax Accountant

Posted by Sharie DeHart on Fri, Feb 17, 2023

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

Common Construction Payroll Implementation Errors You Can Easily Avoid

Posted by Sharie DeHart on Fri, Oct 28, 2022

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

Management Priorities For New And Experienced Construction Company Owners

Posted by Sharie DeHart on Fri, Oct 14, 2022

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

Ways To Get Rid Of Construction Accounting And Bookkeeping Confusions

Posted by Sharie DeHart on Fri, Sep 09, 2022

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

10 Hidden Construction Contract Traps And How To Avoid Them

Posted by Randal DeHart on Fri, Nov 01, 2019

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

Calculating Costs And The Value Of A Construction Bookkeeping System

Posted by Randal DeHart on Fri, Oct 25, 2019

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

What Your Construction Bookkeeper Needs To Generate Useful Reports

Posted by Randal DeHart on Tue, Oct 22, 2019

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

Effective Strategies For Contractor Timecard Issues

Posted by Sharie DeHart on Fri, Jul 19, 2019

Employees need to fill out timecards. The most practical reason is that all employees want to get paid, early, often, and regularly.
 
For those of you that are parents, do you remember when you brought home your newborn baby? They need food, water and diaper changed. You learned all about "Goldilocks and the Three Bears" Some children who are born on a HOT summer day seem to get "overheated" quickly and do not suffer quietly. 
 
If you have employees, you may notice in some similarities to raising children because in some cases you the contractor take over where your employee's parents left off. They want their paychecks (allowance) on a regular basis, and it had better not bounce at the bank due to insufficient funds.
 
If any of your construction worker's paychecks do happen to bounce or they are not able to cash it at the bank because your construction company does not have enough money in the payroll account then most likely you will find whatever tools and equipment they have easy access to at the nearest pawn shop.
 



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Topics: Time Cards, Contractors Bookkeeping Paperwork, Time Card Issues, QuickBooks For Contractors, Construction Bookkeeping, Painless Paperless Contractor Bookkeeping Services

Establishing Your General Contracting Business - TIPS On Starting It Right

Posted by Sharie DeHart on Fri, Jun 07, 2019

Running a business for general contractors like you is an overwhelming yet fulfilling task because there are so many things only the company owner can and should do. In most cases, when the owner's spouse contacts us, it is because they are trying to help with the business, but they know they need outside assistance, so there is more quality time with the family.

Most contractors, and small business owners, in general, haven’t realized that what you don’t know can keep you up at night. Instead of focusing your efforts in maintaining your relationship with your past clients and building a new one, you were up wondering whether you’re making or losing money. Today more than ever, it is necessary to have a properly set-up accounting and bookkeeping file and maintain it. Someone with the knowledge and training combined with an understanding of construction to Set-Up, Clean-Up, Tidy-Up, and manage your bookkeeping system.



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Topics: Contractors Bookkeeping Paperwork, QuickBooks For Contractors, Construction Bookkeeping, QuickBooks Setup Do It Yourself, QuickBooks Construction Accounting, Assisted Do-It-Yourself Contractor Bookkeeping, Painless Paperless Contractor Bookkeeping Services

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