583: Building On Solid Ground: Your Construction Bookkeeping Foundation

Contractor Success Map with Randal DeHart | Contractor Bookkeeping And Accounting Services

This Podcast Is Episode 583, And It's About Building On Solid Ground: Your Construction Bookkeeping Foundation As a construction business owner, you must stay informed about your finances and financial situation. You do this through bookkeeping, the process of recording transactions in your business. This includes transactions, credit card charges, and any other economic activity within your company. Financial management can easily be overlooked when managing projects, dealing with subcontractors, and ensuring customer satisfaction. However, neglecting proper bookkeeping can significantly impact the growth and success of your construction business.

When your construction bookkeeping is set up right

It gives you insights into your income and expenses, such as:

• How much money you've made
• How much money needs to be paid for bills or salaries
• How much money should be put away for taxes or other unexpected costs

Bookkeeping also helps keep track of all your business transactions. A good system will serve as an audit trail showing every transaction that has taken place within your company. This includes purchases from suppliers, sales made to customers, and bills paid out by suppliers or employees (like salaries).

This information will quickly become apparent if there are any irregularities, such as missing items on purchase orders. You get transparency into your business, a way to ensure you remain compliant with laws, and valuable insights to help you make smarter decisions.

While factors such as market trends, technological advancements, and customer demands undoubtedly play a significant role in shaping your business, financial insights are an often underestimated aspect that can substantially impact growth. Understanding the intricacies of your company's financial data and leveraging this insight effectively can be a powerful tool for driving growth in your construction business.

When to hire a construction bookkeeper

There are many scenarios where hiring a bookkeeper makes sense. These depend on your construction business setup and your abilities.

You should consider hiring a bookkeeper if you have

• More than one employee
• Multiple business locations
• A complex business structure - yes, like a contracting business
• Concerns about making errors in your books that could lead to fines or penalties
• Too much work to do, and bookkeeping constantly gets pushed to the side
• A lack of experience with bookkeeping and still determining how to go about it, so you avoid it.

What a Construction Bookkeeper can provide for you

1. Expertise

Construction bookkeepers are experts at managing, sorting, and recording your business's financial transactions. They've spent time developing their skills and experience. During that time, they've also seen and resolved bookkeeping-related issues that you may come up against. Their expertise makes them more efficient at managing those issues.

Beyond that, they understand business trends and challenges others in your industry face and can help you move through those. They also know what questions to ask to help you make important decisions and can share best practices with you.

2. Guidance

Your bookkeeper not only helps you maintain accurate records but also understands your financial circumstances. They help you assess how to make critical business decisions, such as whether now is an excellent time to grow or when you should hold back. They can also identify trends in your industry and help you take advantage of those opportunities.

Finally, they can assist you with budgeting and sticking to your budget. They'll help you develop a realistic financial plan that enables your business to grow while achieving short- and long-term goals.

3. Time savings

As a business owner, you likely have many activities to focus on. In bookkeeping alone, there are numerous tasks to be responsible for, such as:

• Collecting and recording transaction data
• Sorting receipts
• Classifying expenses
• Invoicing customers
• Paying vendors
• Managing payroll

Bookkeepers take on those tasks, so you don't have to. It's not just about the energy you put into them; it's about the fact that unless you're a construction bookkeeping expert, it'll likely take you longer to complete these activities than a bookkeeper. That can add up to a lot of extra hours.

Hiring a Construction Bookkeeper frees up valuable time for other activities such as marketing, perfecting your products and services, or spending time with family.

4. Money savings

There's a time cost to doing your books, but there's also a potential money cost in the form of missed opportunities. The time you spend doing your books is time you could be out creating or taking advantage of new opportunities for your business. Your bookkeeper frees you up, giving you the time and energy to identify potential opportunities. They can also advise whether you're in an excellent financial position to jump on those possibilities.

Additionally, the expertise bookkeepers bring to their activities means they're likely to prevent costly mistakes that could affect your finances.

Final thoughts

Prioritizing better bookkeeping practices is fundamental to driving growth and sustainability in your construction business. By proactively managing your company's finances, you can gain a competitive edge, mitigate risks, and position your business for long-term success in the dynamic construction industry.

Remember, the success of your construction business depends not only on the quality of your work but also on the strength of your financial foundation. Embracing better bookkeeping practices can pave the way for sustained growth and profitability in your construction enterprise.

As a reminder:

QuickBooks plans to stop selling several versions to new U.S. subscribers. The deadline to purchase new subscriptions to the listed products has been extended from July 31, 2024, to Sept. 30, 2024.

• QuickBooks Desktop Pro Plus
• QuickBooks Desktop Premier Plus
• QuickBooks Desktop Mac Plus
• QuickBooks Desktop Enhanced Payroll

We do our best to inform you of your options based on your construction company's needs and ensure you are alerted to fundamental software changes that may affect your construction business now or in the future. Although extended, we recommend checking and upgrading immediately to avoid service disruptions and workflow interruptions. Please plan accordingly or reach out if you need help.

We are here to help you achieve your definition of success, whether you would like to outsource your bookkeeping to us, buy and use our templates, or learn to do it independently.

PS

We offer free resources to help you save time and money that you can download and print now.

About The Author:

Sharie DeHart, QPA, co-founded 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. She offers insights on managing 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 [e-mail]