Understanding and managing your gross profit margin is crucial to ensuring the sustainability and profitability of your business as a construction contractor. This key financial metric not only reflects your company's financial health but also helps guide your pricing strategies, project management decisions, and overall strategic planning.

Profit is the money left in your business after all your expenses have been paid. An income statement (also referred to as a profit and loss report) reveals what profit your construction company made last month or last quarter. Your profits are detailed in two figures, namely:

• Gross profit is what's left from sales after deducting the costs of goods sold or services provided.
• Net profit is left from gross profit after operating expenses (your business overheads) are deducted.

Note that net profit isn't the final 'bottom line' profit until all taxes have been paid.

Gaining more significant profits depends on accomplishing all the little things better rather than making one huge change.

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Topics: Accountant, Ten Minutes A Day To Increased Construction Profit, Construction Profits, Profit And Loss Reports, Profit and Growth Strategies For Contractors, Systems And Processes, Boost Construction Profitability, Gross Profit Margin

Navigating the world of finances can sometimes feel like trying to build a house without a blueprint. Between managing budgets, keeping track of expenses, and ensuring you're compliant with tax regulations, it's easy to feel overwhelmed. That's where your financial dream team comes in! 

 

Having the right people by your side can make all the difference in staying organized and achieving your business goals. In this blog post, we'll chat about the key players you need on your financial team, what each role brings to the table, and how to find experts who truly understand the ins and outs of the construction industry. 

 

Whether you're a seasoned pro or just getting started,  building a reliable financial team will be a game-changer in achieving your financial goals and securing the future of your business.

 

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Topics: Accountant, CPA Vs Construction Accountant, Bookkeeper Vs. Accountant, Accountant Vs. C.P.A., Systems And Processes, Winning Teams, Construction Systems And Processes

There was a time when a contractor put a simple ad in the paper or a line listing in the Yellow Pages, and they would have more leads than they could handle. It was the only way to go, and the contractors who insist on that and "Word of Mouth" do not survive.

 

Could those contractors have avoided failure?

 

I believe they could have. This article explores the top reasons construction businesses fail and the three key questions that every contractor like you needs to ask to prevent failure. It would be best to answer these questions to provide a clear path to your continued and future growth and success. 

 

Contractors who did not move from simple ads that had always worked, and evolved a Marketing Plan made the same mistake other failed companies and brands made. They were unable to Innovate, Reinvent, and Evolve by having a deep understanding of what business they were in, who and what they were competing with, and by challenging themselves to understand their actual expertise.

 

 

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Topics: Builders Bookkeeping Services, Accountant, Bookkeeping Services, Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips

I will start by quoting a short sentence found in the all-time best-seller "Basic Instructions Before Leaving Earth" That is an acronym; take the first letter of each word and put it together to form a different word. "No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other.." there is more to that, and the point is that concept applies to accounting.

 

How many times have you hired someone with the expectation they knew how construction works, and then you found out they did not have a clue about it or your particular type of construction? It happens all the time, and the first thing that crosses your mind cannot be posted on this blog. We know how much you would like to take action and fix it immediately. But before you do all that, let's go back to understanding roles to know which one you need.

 

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Topics: Builders Bookkeeping Services, Accountant, Bookkeeping Services, Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips

Contractors, by nature, are tenacious, resilient, and have a tremendous amount of "Grit And Determination To Succeed," which means they are not easily disturbed or prone to react hastily or rashly at the first sign of trouble. This is just one of the many qualities I sincerely admire about these remarkable men and women.

 

Like you, we have callouses on our hands, having owned and operated construction companies, and some of us have served an apprenticeship in one of the construction trades. In other words, when it comes to owning, managing, and making a substantial amount of money with construction and contractor service companies, we know what we are talking about.

 

Incompetent bookkeepers can destroy your construction company and your finances. Unfortunately, until a contractor has gotten to know us, they tend to think of us as just another contractor's bookkeeping service. This means some contractors think we are crazy to suggest that any trusted employee, especially an in-house bookkeeper, would steal money from their company, so they ignore us until it is too late.

 

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Topics: Builders Bookkeeping Services, Accountant, Bookkeeping Services, Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips

Have you been in business as a construction contractor or specialty contractor for a while, and now you are wondering what your construction company is worth?

 

Nothing is ever as good or as bad as it appears. If you are like most contractors, you learned a trade, skill, or craft, and after a while, you decided to go into business for yourself and make "The Big Bucks," which was one of the happiest days of your life. I've heard It said that boat owners experience two of the happiest days in their lives; the day they bought their boat and the day they sold it.

 

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Topics: Builders Bookkeeping Services, Accountant, Bookkeeping Services, Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips

If you ask 100 business owners what they like least about running a business, the chances are good that bookkeeping will rank high on the list. It's an annoying and frustrating chore that takes up much time and is easy to put off until tomorrow.

Moreover, Construction Companies have unique bookkeeping needs. Some bookkeepers and bookkeeping systems may cost you more than they are worth in salary, fees, and loss profits because you cannot get QuickBooks reports and financial reports when you need them. Chances are, you are suffering from bookkeeping pain, and your bookkeeper or accountant is overwhelmed trying to figure out how to do construction accounting.

Good bookkeeping leads to informed decisions. Avoiding your bookkeeping is dangerous, however. For example, not knowing your construction company's financial situation can result in a series of missteps that could ultimately cost you your business.

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Topics: Builders Bookkeeping Services, Accountant, Bookkeeping Services, Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips

The tax season is here. This is when most construction company owners think about getting their construction bookkeeping system in order, so they can file their annual tax return for the previous year.

 

Keep in mind that each branch of accounting serves a different function similar to how it works in construction. There are framers, rough carpenters, and finish carpenters, and all three works with lumber, yet in most cases, the skill sets to do everything are rarely found in the same person.

 

If you're like many construction business owners, you may not be exactly sure of the differences between a construction bookkeeper, a construction accountant, and a Certified Public Accountant (CPA)  - and whether you should hire one, or all.

 

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Topics: Accountant, Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips, Construction Systems And Processes

We are always looking for ways construction contractors like you save time and money. These tips will help you make a noticeable difference to your bottom line.

 

Reduce staff costs

 

Without a doubt, having someone to help deal with routine tasks can significantly improve productivity. The rub is that hired help is often too expensive for small business owners.

 

Internships can be a real win-win: a student gets hands-on experience assisting you with marketing, accounting, or administrative work, and you get time-saving help for free.  

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Topics: Accountant, Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips, Construction Systems And Processes