A wise business owner once said, "Happiness is positive cash flow." As a business owner, I'm sure you agree. Everything is better when your cash-in exceeds your cash-out.

A cash crisis can be emotionally devastating, and it can even kill your business. If you've ever had to beg, borrow, and steal to cover tomorrow's payroll, you know what I mean.

Having a proper cash management system allows you to:

• Know when, where, and how your cash needs will occur.
• Know what the best sources are for meeting your additional cash needs.
• Be prepared to meet these needs when they occur by keeping good relationships with bankers and other creditors.

The starting point for avoiding a cash crisis is allowing your accountant to develop a cash flow projection for you. Your construction accountant can help you develop both short-term (weekly, monthly) cash flow projections, help you manage daily cash, and long-term (annual, 3-5 year) cash flow projections to help you develop the necessary capital strategy to meet your business needs.

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.

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.

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?