Being in your own business can be the best time in your life. Alternatively, the worst time! No one starts a business, especially a contracting business, and have it rolling perfectly with a profit every step of the way. Between regulations, economic uncertainty, and other outside forces; always a learning curve.

Picking a Get-Me-By Contractor's Bookkeeping Solution in many cases is using an Excel Spreadsheet and a shoebox, file folders all dumped into a file box and looking at the Online Banking once in a while. This accounting method is the "I still got money, so I must be okay."

When you use today's Job Deposit To Pay For the material, labor, and subcontractors from the last job, it is also known as "Rob Peter To Pay Paul." Cash flow is never a problem until the sales stop; then it doesn't matter if it is the economy (your customers get laid off), domino effect (their customer didn't pay them), or you are unable to work due to being hurt on the job or get sick (flu or more serious illness).

 

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Topics: QuickBooks Construction Reports, Key Performance Indicators, KPI, QuickBooks Construction Accounting, Contractor, finance

Some applications make almost everything easy, including accounting software. Too many contractors find out too late the adage "You get what you pay for" still applies.

 

Hundreds of contractors and regular bookkeepers have told us how simple QuickBooks is to use, yet they cannot understand why QuickBooks for Contractors is so hard to use, and it is getting harder every year. I agree with them.

 

Making a lot of money as a contractor is easy if you know what to do, and I don't mean your ability to produce more fieldwork than anyone else, although that does help.

 

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.

 

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Topics: QuickBooks Construction Reports, Profit And Loss Reports, QuickBooks Construction Accounting, Contractor, finance

The pains caused by an economic downturn can be excruciating, which is why most of us dread it.

A recession can mean massive layoffs, jobs becoming harder to find, and wages frozen, which means consumers hunker down and spend less-- often worsening the slowdown unknowingly. 

For most businesses, especially small businesses, recessions can be brutal. Just take, for example, the Global Financial Crisis (GFC) that struck the world in 2008. Between December 2008 and December 2010, approximately 1.8 million small businesses shut down. When Investopedia looked into the financial crisis's impact on small businesses after a decade, they found out that business creation has not yet returned to pre-crisis levels. 

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Topics: Be Do Have, Cash Flow, Construction Marketing, Business Plan For Your Construction Company, Contractor, Contractor Tips, finance, Construction Business After COVID-19

Operating at a loss means you’re spending more money than you’re making. And while it’s not uncommon, especially for new businesses, it’s still not an ideal situation and shouldn’t continue in the long term. Otherwise, you will eventually run out of cash reserves and be out of business.

So the first thing you need to identify is why you’re operating at a loss. If it’s because you’re still in the start-up phase, then you might not need to worry too much as long as you’ve got enough cash to meet your costs. But if the losses are due to a decline in sales, then it’s time to review your construction business and, if necessary, get professional help.

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Topics: Profit And Loss Reports, Construction Marketing, Contractor, Contractor Tips, finance, Contractor Operating Tips

As a construction company owner, you are getting paid, paying someone, or both. Contracting is all about money and taxes. With your job being not only physically demanding but also mentally draining, have you considered valuing your efforts? I understand how challenging it is for you to keep tabs on your employee's schedule, but make sure you also track yours.

 

The primary reason to track Owner's Time On Jobs is to have a more accurate Job Costing Reports. You need to know how much money each job is making or losing. As an employer, you need to adopt the use of a time tracking software to assure accountability and improve productivity in the workplace.

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Topics: Payroll Processing, Contractor Challenges, Contractor, Contractor Tips, finance, Contractor Operating Tips, Payroll For Construction Contractors

Contractors want money; banks want to lend money, what's the problem?

 

Think of all the times:

• You loaned money to a friend or relative
• Provided labor and material for somebody's home or business without a deposit check
• Did change order work that you never got paid for doing and never will
• Gave employees an advance on their paycheck that you never got paid back
  

Multiply that by 100,000, and you will begin to understand why banks seem so tight-fisted about loaning money.

 

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Topics: Contractor Challenges, Contractor, Contractor Tips, finance, Banking

Contractors have often told us that they're "one job away from making it big or losing everything". Our clients usually wonder why some of their competitors appear to be making a lot of money than they do when they seem to be doing similar work. 

 

Not everyone seems to realize that in construction, money is not made in the field by working and pushing boundaries of tactical efforts - working harder and faster. Money is made in the office developing and implementing strategy.

 

For example, a backhoe takes longer and more skill to mobilize and demobilize on and off a job site than a shovel. Tactics mean using a shovel for all earth-moving projects. Strategy means knowing when to use a backhoe and when to use a shovel.

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Topics: Key Performance Indicators, KPI, Contractor Challenges, Contractor, Contractor Tips, finance

Developing a comprehensive strategy for your construction business can be about as much fun as wrestling a pig in the mud because:

• It is slippery and hard to get control over it.
• It will wear you out and frustrate you to no end.
• You will swear it is a complete waste of time.
• Your contractor buddies who are barely making a living will think you're crazy.
• In the end, you will be thoroughly worn out, exhausted and mentally drained.

What separates wealthy contractors from poor contractors?

• It's not a lack of opportunities to bid jobs or get leads because getting leads is easy.
• It's not lack of ambition because every contractor I know is active and ready to get busy.
• It's not a lack of intelligence or the ability to develop a production method and follow it to the end.
• It's not lack of money because if you follow my process, you know how to overcome that using O.P.M. (Other People's Money)

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Topics: Contractor Challenges, Contractor, Contractor Tips, finance, SWOT Analysis

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: QuickBooks Training Online, Contractor Challenges, Contractor, Contractor Tips, finance, Contractor Operating Tips, Construction Books

The business cycle operates like ocean waves that cause a lot of construction business to go out in a year or two. Some grew too fast without reliable financial reporting tools and proper guidance.

 

As you may know, there is an expansion and contraction Isoquant that occurs in all businesses. For construction companies, it is accelerated because of the enormous risks in project work. The changes in demand for Labor, Material, Other Costs, Subcontractors can occur almost overnight which often causes a financial death spiral, and the contractor does not know they are in trouble before it is too late.

 

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Topics: Contractor Challenges, Contractor, Contractor Tips, finance, Contractor Operating Tips