Construction Company Board Of Advisors
Profitable Construction - Companies have a Board of Directors to develop and oversee the Strategic Objectives of the company. They can provide insights from a very high level top down view because the board members are already skilled in running similar firms which means they know how to navigate the treacherous waters of the ups and downs in the construction industry.
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 business to working ON your business.
Follow This Step-By-Step Process:
#1 Get A Commercial Banker You Can Work With
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 them on a monthly, quarterly, semi-annual basis whatever works for both of you and bring two printed copies of your Profit & Loss and Balance Sheet for them to review with you. Always, always keep your commercial banker updated about any major changes that may affect your business or personal finances. NEVER SURPRISE YOUR BANKER!
Ask your banker these 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 business 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 business succeed. Lots of people need all construction services and some of them will ask their banker for 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 Your 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 in person to discuss how your business 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 Your 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 Your Commercial Attorney
If you own and operate a business 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 commerical 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 Your Financial Planner
Eventually you will want to leave your business 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.
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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 and QuickBooks For Contractors Expert. 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 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.