Successful Contractors Find Keys To Growth And Profit In Their Accounting

Wait, let's not forget Thanksgiving with Turkey, Dressing, Yams, Mashed Potatoes, Gravy, Fruit Salad, Pumpkin Pie, Ice Cream and lots of Egg Nog. All of this leads to us in January wishing we ate less and exercised more in hopes to keep the pounds on and matched by the pounds off for a net gain of Zero.    

Software and the desire to do everything with our phone is the “Grownup’s Version” of the Candy Store all year long.

• With a couple of clicks on my phone, I want to Buy Something
• Pay For Something
• Get Paid Immediately From My Customer
• Have all of the money go in or out of my bank account
• Now how do I then make all the transactions magically go to an accounting system
• Give me nice detailed reports
• Help me make simple and complex decisions

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Construction Accounting Basics For Construction Contractors

Construction Accounting is not a natural mindset for Construction Contractors. Construction Accounting has own language. Regular Accounting the language is Income Minus Expenses Equals Net Profit.

Construction Accounting is Income Minus Cost of Goods Minus Overhead Equals Net Profit. That simple little thing called Cost of Goods Sold is the primary difference between Regular Accounting and Construction Accounting.

Understanding that difference and how it relates to Job Costing and Job Profitability can get contractors like you firmly on the road to financial freedom.

 

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Contractors Reflect On This Year's Results As The Last Quarter Begins

Going into the last Quarter of the year. Time for some basic reflection about taxes. Officers in S-Corps tend to take payroll later in the year. Now is the time if you have not already been taking payroll. Don't wait until it is time to prepare your Construction Company tax return.

Next review your Estimated personal Taxes paid to the IRS. How much did you pay in taxes for the current year? Internal Revenue expects that you have paid a percentage Federal Taxes before the end of the year.  

Reviewing Federal Withholding for yourself and your employees to avoid surprises when your annual taxes are filed. Contractors who file as a Sole Prop or as an LLC fining as a Sole Prop tend to forget that payroll taxes on their net income is due. I call this “Chef’s Surprise” as it is based on Net Income. Everyone wants the last few jobs to pay before the end of the year.

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You Have Ultimate Control On Who Has Or Receives

Information About Your Contracting Company

Financials statements are based on the information you provided. I know this is not a statement that any contractor wants to hear about their bookkeeping. It is easier to blame the bookkeeper for missing information. The primary keeper of all the documents is you, your spouse, your employees, your suppliers, your bank, your credit card company. The Key work is done by you, or whoever assists you have the power to give information to outsiders about your Construction Company.  

Who wants details about your business?  

• Internal Revenue Service
• State Revenue Agencies
• State Payroll Agencies
• Other State Agencies
• Worker’s Compensation Provider  
• General Liability Insurance Provider

Depending on the report it may be monthly (sales tax, business excise tax, other state business tax reports) Quarterly reports include all payroll related forms to State and Federal (Internal Revenue). Personal story. If you have any data that you can include relating to your list, include that in your introduction, too.

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QuickBooks has over a hundred reports that can be viewed on a regular basis

You could spend all of your time seeing a report in QuickBooks and trying to find the way to populate numbers in the report.

Many reports are designed for specific things. Take for example the view of the Home Page. Just because the feature is on the Home Page in QuickBooks does not mean it is useful for every contractor.

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Tax Time! Corporate Income Tax Returns are due to the IRS by September 15th for S-Corp and LLC’s filing as an S-Corp

Other types of corporations may be in a fiscal year with varied due dates.

The only exception is any emergency extensions granted due to hurricanes (Harvey) or others.

Personal Income Tax Returns are due to the IRS by October 15th which falls on the weekend and extended to Monday, October 16th.

Keeping Paper Documents is necessary. Most contractors go from one extreme to the other.
One extreme is saving everything for decades, and the other is tossing everything out.

What To Save?

What To Toss Out?

We no longer need to print and save every document in file folders and keep adding new file cabinets.

Happiness is every document that can be retrieved electronically at any time in the future.

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Contractors Need Additional Resources To Smoothly Run Their Business

Running a Construction Business is part serious, part white knuckles, part smooth sailing with moments of fun. Because those moments of fun can be few and far between every Contractor needs to have a little humor. Try to see the glass is half full when it really feels like you are in “The Wizard of Oz, ” and instead of going to Kansas you went somewhere else less fun.    

To help free up your time we have numerous FREE Items on FastEasyAccounting.com and located on FastEasyAccountingStore.com. We want to help you make your work time as smooth as possible.

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Contractors Are Selling Their Time First, Skill Second

 

Value of Time – Your time as the Contractor is the most valuable. I hope you are doing the tasks that only you can do. Yes, you can do your contractor bookkeeping. My question is: Why Would You?

Your answer – I have a cash flow problem. Spending hours doing your bookkeeping will not solve that.
In fact, doing contractor bookkeeping yourself will be painful, take time away from the things you do that make you money and take a lot longer than having someone else do it.

Why, because every piece of paper has a story and your brain wants to replay the story (fast or slowly depending on the story). Say for example you waste an extra minute on every piece of paper. How long will it take you to finish all of the bookkeeping chores for the day, week, month or longer? This is after you have QuickBooks setup for your construction company and you know exactly what to do with that piece of paper.
 
As a Contractor who is serious about their business. There is only one answer to cash flow issues.  
Sell Your Way Out of A Problem (author unknown). With money in hand, you can make better decisions.

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Making Decisions Never Ends For Construction Contractors Like You

One of the basics of good decision making is being adaptable

Think of decision making is being in a bumper car. You are constantly driving and trying to avoid the other bumper cars. If you hit one you back up and go again (reminder this is the only safe place to hit other cars). Rest of the time life as a contractor feels more like the Indy 500. You are driving as fast as you can, passing other cars, making pit stops, and scrambling to make it to the finish line.

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