Contractors, Bookkeepers and Tax Accountants are trying to keep everything all in one place. That is great. A single bank account on the surface is the answer in simplicity.
Why – when putting everything in one bank account; it could be a FINANCIAL DISASTER.
Go to Home Depot, Lowes or any other larger store.
Use your debit card; Drop or lose your debit card,
Someone finds it and buy stuff until he or she have spent all your money!
(may be a little harder with the chip but how many places can you run your debit card as a credit card?)
Just as there are Common Sense rules about Sharie’s Cash Management 101Tips, there are common sense rules about mixing multiple companies in a single QuickBooks file:
Everyone can own Multiple Companies
Depending on the structure if the financial statements are on a Schedule C And 1040 or 1120S (S-Corp) or other return that in turn rolls up into The Contractors personal 1040 return.
The annual tax return is pages and pages long (feels like a zillion if you have to make paper copies)
Your banker wants the 1st two pages of your personal 1040 Annual Tax Return.
If you need commercial accounts, Dun & Bradstreet wants the 1st two pages of your business tax return. Why because the 1st two pages is the summary of all the pages and worksheets that follow?
As a Construction Contractor, you need the details of the balance of the pages to run your business.
How do you know how much money each company is making?
I can think of several examples of multiple companies being in a Single QuickBooks File.
Husband has a Construction Company and Wife has a Non-Construction Company all mixed together.
Next example: Construction Company, Non-Construction Company plus a few Flipper houses for friends, and a few rental homes for themselves. Add in a few side jobs that are Professional Services.
The word MEGA-MESS comes to mind:
In Washington State – Plumbers are at the field rate for workers comp even when they are cleaning their truck at the shop. Why? Because Labor & Industries “Says – cleaning the truck is all part of the job.” No Lower Shop Rate is allowed.
Overhead is different for each of the following companies:
Mixing Companies in a Single QuickBooks File:
The Construction Bookkeeper will try to keep your chaos straight and fight a losing battle with reality. What will not happen is good Financial Reports.
The “What About’s” is just “White Noise” as The Contractor who insists on everything in a single QuickBooks file against all advice will benefit from “The Mess.” (Notice I did not say benefit in a positive way)
QuickBooks Desktop is fantastic for Construction Contractors to get good reports. (Remember, Garbage In = Garbage Out)
Reports cannot be better than the information given. Think Lumber – Standard & Better or Stud Grade is much better than the grade that is commonly referred to as airplane propellers. Specialty Lumber Yards have a variety of quality lumber.
A single project may have multiple grades of lumber. It’s a Science to use the right piece of lumber in the proper application to last the longest. Basics are that you can pound a nail in every kind of wood. Next Question – Which type of nail?
Everything about Accounting Especially Construction Accounting is the intertwined:
I would like to believe that you have a real desire to make changes that will make the lives around you easier and therefore you will get the financial and other job costing reports easily and efficiently.
Of course, if you hired an Admin Assistant who is expected to act as your Office Manager |In-House Bookkeeper and has No Bookkeeping or QuickBooks Skills than you pick the phrase that best suits you.
My suggestion:
With messy QuickBooks – each time money is moved between companies it usually Looks Like Income and by default treated as Income, and you could pay far more in taxes than you saved by mashing everything together.
Looking forward to helping you make 2017 be a Better Year?
Thinking Happy Thoughts.
Sharie
When You Become A Client - Then we can tap into our resources of knowledge and strategy banks. We use the reports hidden in your QuickBooks in order to diagnose and understand your construction business and develop plans and help you implement a path to success for you and you alone because every contractor has unique Strengths, Weaknesses, Opportunities and Threats (S.W.O.T. Analysis) that when understood can lead to a Strategic Roadmap which cannot help but make a lot of money.
For Construction Company Owners who do not need the full power of a QuickBooks for contractors and want 24/7 online access we offer Xero Accounting Online, and we have a custom setup for construction companies. Click Here For More.
This Is One More Example of how Fast Easy Accounting is helping construction company owners all across the USA including Alaska and Hawaii put more money in the bank to operate and grow your construction company. Construction accounting is not rocket science; it is a lot harder than that, and a lot more valuable to people like you so stop missing out! Call Sharie 206-361-3950 or sharie@fasteasyaccounting.com and schedule your no charge one-hour consultation.
Profitable Contractors and Construction Company owners have known about the value of outsourced bookkeeping services and contractor coaching services like ours for a long time, and now you know about it too!
Thank You For Reading This Far, And I Hope You Understand we really do care about you and all contractors regardless of whether or not you ever hire our services.
We Scan Your Receipts, And Invoices link the appropriate transactions to QuickBooks or Xero Accounting Online depending on the construction accounting service you are using and provide ongoing Cloud Based Contractors Bookkeeping Services by accountants who understand construction.
About The Author:
Sharie DeHart, QPA is the co-founder of 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 and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. http://www.fasteasyaccounting.com/sharie-dehart/ 206-361-3950 or sharie@fasteasyaccounting.com
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