Board Of Advisors For Your Construction Company
Large Enterprise Level National And International Construction Companies have a Board of Directors to develop and oversee the Strategic Objectives of their construction company. They can provide insights from a very high level top down view because the board members are already skilled in running similar sized firms which means they know how to navigate the treacherous waters of the ups and downs in the construction industry and the business cycle.
This one thing can dramatically improve your quality of life and everyone around you because it is part of the BPM which is helping you go from working IN your construction company to working ON your construction company.
Follow This Step-By-Step Process:
#1 Find A Commercial Banker
Go to your bank and ask to speak with the commercial banker. Every bank has one and they can be one of your most powerful allies and mentors. The really good news they are on the banks payroll.
Tell them you are working with a construction accountant that is involved with the bookkeeping and accounting and that you have a totally separate firm that prepares your Annual Federal Tax Return.
Bankers like to know you are using tried and true method of "Trust But Verify" to help limit fraud and errors. We recommend you have different companies doing your bookkeeping and your Annual Federal Tax Return because that will provide you with checks and balances in your system. In addition if you need to replace one or the other it will be a lot simpler.
Plan on meeting with your commercial banker monthly, quarterly or semi-annual basis whatever works for both of you. Bring two printed copies of your Profit & Loss and Balance Sheet for them to review with you. If you think a tablet will work, think again and don't bother doing it at all.
Next, always keep your commercial banker updated about any major changes that may affect your business or personal finances. NEVER SURPRISE YOUR BANKER! In many cases they can help you avoid a problem or avert a disaster if they know ahead of time and the credibility you will add will be priceless.
Ask Your Commercial Banker These Three Questions:
1. Is there anything on the financial reports I should pay closer attention too?
2. How can you and the bank help me run my business more profitably?
3. Who is your target customer and how can I refer new customers to you?
No matter what size your construction company is now, whether you need a loan or line of credit or not, you need to understand that lending money is only part of what banks offer to help your construction company succeed. Lots of people need all construction services and some of them will ask their banker for referrals. Would you like to be on the list of contractors that gets those referrals?
Do not catch the dreaded disease I call "Yellow Fever". This Randalism occurs when Caterpillar, the world's leading manufacturer of construction equipment begins to promote their brand new shiny yellow colored backhoe or grader or heavy equipment with all the latest whistles, bells and gadgets.
My advice is "Wait for it" and let your commercial banker know you are interested in some new equipment, keep developing the relationship and whamo! You could get THE CALL...
"Hi Bob... how are things going? Hey we haven't met for a while and I was wondering if we could meet for coffee because we are about to REPOSSES a piece of heavy equipment that you may be interested in? I showed the last Profit & Loss and Balance Sheet you gave me with some folks at the bank and they thought we may be able to work something out if you are interested..."
The bank is does not like storing equipment, they would rather it would go from the repo man to somebody else without stopping if possible. The price and terms are very fair so it is important to remember this Randalism "The Pig Gets Fed, The Hog Gets Slaughtered!" Negotiate a fair deal that allows the bank to get something and you get something, a win-win and you will find more great deals coming your way in the future.
#2 Find A QuickBooks Expert In Construction Accounting
Get a good construction bookkeeping and accounting firm and outsource as much of your construction bookkeeping, payroll processing, complex invoicing and monthly and quarterly tax reports as you can afford. It will free up time to do what you do best and the books will be kept in order.
Choose someone that specializes in your industry because the days of the one-size-fits-all accounting practice has gone the way of the dinosaurs.
Make certain they have current technology which means they have equipment in a secure server farm that allows you remote access to your QuickBooks desktop version on the internet. You do not want the QuickBooks Lite Online Version because you need to see the same QuickBooks software you have on your desktop now. The only difference is you have remote access anywhere you have internet connection and your construction bookkeeper can get to it from their office. No construction bookkeeping service needs to ever be in your office unless you invite them.
Your outsourced accountant needs to provide an easy way to get the paperwork to them with fax, scanning, email, and in person. Make certain they are in an office building, not their home. A more professional environment attracts a better class of professional bookkeepers. And the building needs to have a secure lock box that allows you to drop paperwork off 24/7/365 when it is convenient for you, not just during business hours.
Obviously scanning all your paperwork into a paperless secured server and link source documents to the transactions in QuickBooks for easy retrieval later is a given. This makes it easy for you to get to it remotely, see it, print it or email it without having to dig through a file cabinet or pile of papers.
Finally they need to be available to meet with you online via GoToMeeting or in person if their office is close to you to discuss how your construction company is doing. And they need to be able to explain in easy to understand language what your Financial Statements, Profit & Loss and Balance Sheet mean.
#3 Find An Income Tax Return Preparer
If your bookkeeping is solid you can use any qualified tax preparer to fill in the blanks and generate the return. I used to believe only a C.P.A. could fill out a tax return. Now with the advances in technology and properly setup QuickBooks I no longer feel you need a C.P.A. for this.
#4 Find A Commercial Attorney
If you own and operate a construction company you absolutely positively need a commercial attorney to:
Setup your business entity, LLC, Inc. or whatever is best
Review contracts you will ask your customers to sign
Review contracts you will be asked to sign
Keep you out of trouble wherever possible
Keep you out of litigation if at all possible
Setup your partnership agreements
Two kinds of contractors: ones who have a commercial attorney and ones who will get a one after having locked horns with somebody else's commercial attorney. A good commercial attorney will draw up employment agreements, construction contracts, review insurance policies and more. A qualified commercial attorney is worth every dime they charge.
#5 Find A Financial Planner
Eventually you will want to leave your construction company and pursue other interests so plan ahead now. You could start with Quicken software and play around with it. You can learn a lot about investing and run some scenarios that will show you how much income you will need to retire and develop an action plan.
Once you have some basic knowledge get a Certified Financial Planner. If you do not have a lot of money to ask your commercial banker to recommend someone at the bank and eventually when your reserves build up get a Certified Financial Planner.
That's all I have for now and if you have read this far please do me the honor of commenting and rating this article. Tell me what you liked, didn't like, tell it like you see it because your feedback is crucial and I thank you in advance.
Profitable Construction - Companies have known about the value of online invoicing and bill payment to help increase their cash flow and profitability and now you know about it too!
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About The Author:
Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, QuickBooks For Contractors Expert and Xero Accounting Specialist and Bill.Com Certified Guru. This combination of experience and skill sets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and construction accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and Xero accountants to the benefit of all of the construction contractors he serves across the USA. Visit http://www.fasteasyaccounting.com/randal-dehart/ to learn more.
Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Check out our Contractor Success Map Podcast on iTunes and Follow Randal on Google+Follow Randal on Google+
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