Contractor CFO’s Struggle To Achieve Good QuickBooks Reports

Contractor CFO’s are in a constant struggle between having all of the documents needed for data entry and providing the tools for the Office Manager | Bookkeeper need to do the job.

Owners want answers to the following questions

Am I making any money?

Where am I making any money?

Why isn’t there a report that at the push of the button gives me all the answers?

When Your Company Was New, The Answers Were Not As Important As They Are Now

You are a small contractor who needs an Admin Assistant to answer your phone, so you hire someone for your contracting company office.

Calls come in, and your Admin Assistant has some free time between calls, so you want to make use of that famous Standby Time, and you ask them to do a little more. Being nice; you give a new title of Office Manager.  

As the Office Manager; that person is in control of the bookkeeping, customer invoices, vendor payments and more. As the contractor, you are excited because you are handing off the responsibility for the day to day activities.

From your side; you have checked off the box called Office Manger DONE, phones DONE, bookkeeping DONE and material pickup and delivery person DONE. Everything is solved. Good now you can go back to work and start doing the work which is the part you are good at and like to do.  

Are you expecting Too Much from your Office Manager?

Mad Dash To The End Of The Year And I Can’t Remember Last Week

Let Alone January, April, July’s Stuff!

The year is almost over. It is now the (4th) Quarter and year end deadlines are approaching.

Have you given your bookkeeper, wife, partner), accountant or tax accountant the information need to complete your reports. Accountants need good information to be able to create detailed reports and save money on your taxes.

Here is truly where the expression “Garbage In Equals Garbage Out” comes into play.  It is impossible to create Job Costing Reports when all anyone knows is the amount of a deposit on the bank statement.   
 
It’s the Mad Dash To The End Of The Year as a contractor recently described their Year End Madness to get his documents ready for the Tax Accountant.

Are You In This Cycle Of Chaos Too? It’s Preventable!

The First Question You May Ask Yourself Is

Why Doesn’t My Tax Accountant Help Me With Job Costing?

They are Tax Accountants, not Construction Accountants and may not know the answers. You may think they are just keeping it a secret. Sometimes you may think they don’t know what they are doing, and maybe I need to get a new tax accountant.  

My Advice is Stop, take a deep breath. Is your tax accountant doing a good job with your annual taxes? If the answer is YES. Please keep them, they are doing what they are supposed to do.

The First Question You May Ask Yourself Is

Why Doesn’t My Tax Accountant Help Me With Job Costing?

They are Tax Accountants, not Construction Accountants and may not know the answers. You may think they are just keeping it a secret. Sometimes you may think they don’t know what they are doing, and maybe I need to get a new tax accountant.  

My Advice is Stop, take a deep breath. Is your tax accountant doing a good job with your annual taxes? If the answer is YES. Please keep them, they are doing what they are supposed to do.

Experts Have Increased Knowledge And Skills. This is true whether you are talking about general bookkeeping, tax accountants, your mechanic, your doctor or other business professionals.

In the world where most people think everything should be Free, Perfect, Now getting good financials from your Construction Accounting System still takes the old fashioned method of hard work and skill.

Most Contractors would never expect or allow their staff out in the field do sloppy; tacky workmanship except where the office is concerned. Most contractors who do beautiful work on the job tend to be a Little messy in their paperwork.
There is only so many hours in the day and not enough hours to do everything.

Highly successful contractors know they need good reports to know where the their company is going, knowledge on what type of jobs to bid and accept.  If and when to hire additional employees.

Smart contractors know when to hire someone who has the skill sets that they or their office staff does not have. Make no mistake, managing the paperwork in your construction company requires more than just simple QuickBooks skills. You need someone trained in construction accounting with highly developed skill sets in dozens of online and offline software, not just the basics of how to turn on QuickBooks and write a check.

Think of what it takes to manage your household expenses then multiply that by a factor of 10 then add in employees with all the drama and headaches they bring to your company!

What You Should Expect From Your Bookkeeping System

First Important Principle In Construction Accounting:

Everything starts with Cash because Cash Is Fact; Profit Is An Opinion. All transactions in the bank account of your construction accounting system no matter if it is QuickBooks or Xero must be assigned to the proper accounts:

• Income
• Job Deposits
• Payroll
• Taxes
• Cost of Goods Sold (Direct and Indirect Costs including Labor, Material, Other and Subcontractors.
• Other costs including permits, plans, bills from suppliers and purchases on your personal credit cards.
• Overhead

Second Important Principle In Construction Accounting:  

Tracking Income properly, Knowing how, when and where to put Customer Estimates, Customer Invoices, Customer Job Deposits and any Retainage Withheld, Vendor Refunds and Rebates.

Good Construction Accounting Is All About the Details