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    Contractor Bookkeeping In Ten Minutes A Day Using QuickBooks

    Posted by Sharie DeHart on Fri, Jan 15, 2021

    Each contractor type has unique construction accounting needs, which means if the QuickBooks process is custom-fitted to each construction company's needs, it is a beautiful thing.

    We have listened as our contractor clients have described to fellow contractors how "fast and easy QuickBooks is and what wonderful reports it generates," while the other contractor will tell in no uncertain terms what a piece of junk it is. The difference is in the QuickBooks set up. Two woodsmen will cut and stack vastly different firewood piles in a day if one uses a chainsaw as it was intended and the other uses it as a cross-cut saw. Same tool, different result!

    QuickBooks users are generally not stumped by the software; they are confused by the accounting information necessary to complete the transactions. Quick access to correct information is essential to maintain the accuracy of your financial records.

    There are no limits to the number of items that can be entered into QuickBooks improperly. Messy files build transaction by transaction or merely put invoice by invoice, receipt by receipt can all be entered into QuickBooks incorrectly. No pop-up will say, "This Is WRONG" – Do It Over.

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    Topics: Ten Minutes A Day To Increased Construction Profit, The Contractors Account, Construction Bookkeeping And Accounting, Systems And Processes, Contractor Tips

    Hidden Costs When Choosing The Right Construction Accounting Software

    Posted by Sharie DeHart on Fri, Jan 08, 2021

    Typically, in the first month of the year, many contractors with expensive high-end construction software are re-examining if QuickBooks for Contractors is all they need and if switching over to it makes sense.

    I chat with Contractors every day. You tell me your stories - about your challenges in running a business, keeping up with the bookwork, estimating and bidding jobs, doing the work and collections from clients, and having or not having employees and paying their taxes. 

    The first thing we ask is which of The Four Types of Contractors best describes your company?

    Salt of The Earth

    Dog And Pickup Truck

    Professional

    Enterprise Level

    Having used several high-end construction software programs costing over $60,000 and a few low-cost programs under $500 like QuickBooks and Peachtree, and some free online bookkeeping programs, I have concluded that for contractors with annual sales volume under $5,000,000, the only answer is QuickBooks For Contractors. For an in-depth comparison of QuickBooks versions, click here.

    We started using QuickBooks when it was first released in the DOS version in the early 1990s and had been raving fans of it ever since. It's had problems and growing pains; however, Intuit, the parent company of QuickBooks, is right about finding and fixing the issues as evidenced by the number of contractors using it compared to their competitors.

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    Topics: QuickBooks Product Information, The Contractors Account, Systems And Processes, QuickBooks Construction Accounting, Contractor Tips

    A Guide On How To Provide Year-round Value To Your Contracting Clients

    Posted by Sharie DeHart on Fri, Jan 01, 2021

    Markets are dynamic and continually evolving, so no business can afford to stand still. Many construction business owners have learned that in the last few months as COVID-19 spread around the world. No matter how excellent your products or services, they have a finite lifespan, so they must be developed, improved, or replaced if you're continuing to grow your business.

    New products, services, and ways of providing more value to your clients and prospects are the hallmarks of a go-ahead business.

    Improvements and extensions

    You can lengthen your services' market life through a process of continuous improvement in response to customer feedback. You can also work on extending your range through complementary products or services.

    However, there's a limit to the extent you can keep on refining, and in many cases – in the end, you'll need something new. Besides, if you are a trade contractor specializing in a specific skill and service, how can you translate your expertise to show that you have your prospective clients' best interest year-round?

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    Topics: The Contractors Account, Thoughts And Inspirations, Systems And Processes, Contractor Tips, Trade Show

    How To Avoid Overpaying Your Construction Business Tax

    Posted by Sharie DeHart on Fri, Dec 18, 2020

    Contractors want to maintain control without making any changes. "Keep doing the same thing but expecting a different result." 

    Throwing the receipts in a shoebox (behind or under the seat in the truck) is the favorite way to deal with paperwork. This is "Under Managing" and frustrates everyone around them who is playing "Where's Waldo?" Job costing is nonexistent; bills are usually paid late, customers are unbilled, lost, and forgotten.

    On the other hand, micromanaging every detail is an over-reaction from years of doing as little bookkeeping as possible to prepare the tax return. Knowing what to do, however, will stop you from making a big mess of it.

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    Topics: How To Lower Your Tax Bill, Construction Profits, Construction Accounting, Reduce Taxes, Contractor, Contractor Tips, Contractor Operating Tips

    Costly Bookkeeping Mistakes That Kill Profit And Growth

    Posted by Sharie DeHart on Fri, Sep 25, 2020

    Most construction business owners like you understand that effective financial management is key to your success. But lack of knowledge, frustration, and even avoidance can add up to your bookkeeping mistakes that derail future company growth.

    With everything contractors like you need to do every day, including weekends and holidays, it's too easy to let crisp, timely Financial Reports go unread, and in some cases, you may not fully understand what they are telling you when you do read them.
     

     

    Protect your construction business and reduce stress by avoiding these costly bookkeeping errors:

    Mixing personal and professional finances

    From day one, business owners should have a separate bank account to deposit their income and pay their business expenses.

    It's also crucial to designate a business-only credit card. Come tax time; separate statements will make submitting claimable expenses quick and easy while reducing painful audit risk.

    Letting accounts receivable slide

    It's frighteningly easy to lose track of which customers have paid you and which clients are late. Implement a strict policy and schedule for tracking accounts receivable and pursuing unpaid invoices. 

    • Ask customers to pay at the point of purchase or no more than 30 days later;
    • Contact clients to confirm they have received your invoice and to agree on a payment date;
    • Follow up immediately when payment dates are missed; and
    • Keep accurate, up-to-date records of each client's payment history.

    Investing in a cloud-based accounting solution can make AR a breeze by automating your monthly invoicing – and contacting late payers with a reminder email. 

    Not tracking direct construction job for each job or project

    If you want to know where you are making and losing money, you need to implement a system of Job Costing. 

    Not allocating overhead to jobs

    For your Job Costing and Job Profitability Reports to be useful, you need a way to allocate overhead among jobs. Overhead generally refers to costs that benefit all jobs.

    For Example:

    • Office And Shop Rent
    • Office Supplies
    • Admin Staff Salary
    • Officer Owner Salary
    • Marketing And Advertising
    • Consulting, Legal, And Accounting
    • Other Overhead Costs

    Not using tech to track your expenses

    Tired of chasing down missing receipts and struggling to justify claims come tax time? There's an app for that! Our outsourced bookkeeping clients have mobile apps specific to their company needs that integrate seamlessly with QuickBooks or Xero.

    Neglecting to strategize for long-term growth

    Practical accounting means managing day-to-day finances while making provisions for future growth. Software and cloud-based solutions offer easy ways to track your financials, but they also generate reports and provide analytic tools construction business owners can use for future forecasting.

    Familiarize yourself with the reports your software can generate to track long-term trends, identify and mitigate risk, and discover new ways to increase profitability. Talk to your accountant about which reports and metrics are most important for your particular business and how to utilize them. 

    Final thoughts

    You don't have to go through it alone. 

    Construction business owners like you are rarely trained accountants. Don't try to manage your company's finances all by yourself. 

    Collaborate with a trusted professional, invest in quality IT solutions, and spend some time familiarizing yourself with relevant tools and trends. 

    You'll feel empowered, which is step one to forging a more love-filled relationship with small business accounting. If you need help avoiding these mistakes, fill out the form on the right and I'll be in touch with you.

    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. Call 1-800-361-1770 or sharie@fasteasyaccounting.com

     

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    Topics: Construction Profits, Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips

    Contractor Clients' Four Critical Words That Leads To Change Orders

    Posted by Sharie DeHart on Fri, Sep 18, 2020

    Are you sick and tired of customers continually changing stuff on you and creating delays or extra work?

    Is your customer leaving you "love notes" regarding minor changes they would like to make on the counter or someplace you can easily find them when you first arrive in the morning? Or the never-ending chain of emails. Or greeting you with "I/we thought we would like to have...."

    Do these notes, emails, or greetings send you into a mental or alone verbal rant about why they can't leave you alone to get your work done?

    Are you concerned they expect you to do the additional work for FREE, NO CHARGE, NA-DA, ZIP, ZERO?

    You needed to be compensated for your time and your crew's time, and you need to do it right away.

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    Topics: Construction Profits, Construction Accounting, Profitable Leads For Contractors, Change Order, Customers, Contractor, Contractor Tips, Contractor Operating Tips

    How To Grow Your Construction Network Without In-Person Events

    Posted by Sharie DeHart on Fri, Aug 28, 2020

    Networking can be a crucial way to keep your construction business growing.
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    Topics: Networking, Clients or Customers, Contractor, Contractor Tips, Contractor Operating Tips

    Contractors, Know What You're Good At And Generate More Leads

    Posted by Sharie DeHart on Fri, Aug 14, 2020

    The pressures of owning and operating a construction company can be, at times, almost unbearable. Unlike any other business, there's no "one size fits all" solution in your toolbox to fix your dilemma.

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    Topics: Construction Profits, Construction Accounting, Profitable Leads For Contractors, Customers, Contractor, Contractor Tips, Contractor Operating Tips, SWOT Analysis

    Five Ways To Increase Your Construction Business Profit

    Posted by Sharie DeHart on Fri, Aug 07, 2020

    First, we always ask our clients to decide what they want from their construction company. Do you want to get rid of the boss? Do you want to work in a more structured environment? Are you sick and tired of working for the boss's son or daughter? Do you want to make much money? Do you wish to make enough money to pay the bills and enjoy a vacation now and then? There are no wrong answers, whatever is right for you is the correct answer; however, you need a reason to do it otherwise when the going gets tough, and it will, you will either win or lose depending on your purpose. With a big enough reason, you will find a way to win.
     
    For many small construction companies, the best way to improve profitability is to increase turnover, as there's no limit to sales, but there is a limit to how much you can reduce your costs.
     
    Let's look at how you can focus on each of the five ways in our profit increase calculator to achieve your goal of improving profits.
     
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    Topics: Construction Profits, Construction Accounting, Profitable Leads For Contractors, Customers, Contractor, Contractor Tips, Contractor Operating Tips

    Troublesome Customers Every Contractor Should Learn To Recognize And Deal With

    Posted by Sharie DeHart on Fri, Jul 24, 2020

    Customers are disloyal price buyers who purchase commodities and services with cost as their primary consideration. Clients are loyal value buyers who purchase goods and services with suitability as their primary consideration.
     
    Every businessperson knows that customers and clients are not created equal. Clients are loyal, while customers will stray if they're offered a slightly lower price elsewhere. Some customers are demanding, while clients only call when they wish to hire you right away.
     
    Every business must deal with a variety of customers and clients. But there are certain types of customers who do more harm than good to your construction business - they drain your resources while adding little to your revenue. 
     
     
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    Topics: Construction Accounting, Clients or Customers, Customers, Contractor, Contractor Tips, Contractor Operating Tips

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