As prices continue to rise, you've likely noticed that your cost of doing business has increased as well. After all, the main point of any business is to make money, and you can't do that if you're no longer breaking even. 

 

It's inevitable in every industry – you must raise your prices to continue making a profit. Many factors decide how much to charge, all of which are dynamic. The rising cost of goods, inflation, and a changing market are just a few reasons why any small business has to reevaluate its rates regularly to stay competitive (and to stay in business).

 

If you're overworked and overbooked, you're undercharging. People know your worth and are fighting for your time. It's time to increase your prices!

 

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Topics: Construction Bookkeeping And Accounting, Contractor Tips, Contractor Guidance, Pricing Jobs, How To Charge Clients, How To Raise Prices

There are a few different methods that employers use to pay their employees, and while they may have similarities, they each also have implications for your construction business and employees. On top of that, there may be a blended model at play, in which you offer two types of compensation at once, such as a wage and bonuses. 

 

When paying employees, laws and the IRS have made the payroll function a time-consuming nightmare for the small business owner.

 

Small business owners spend an average of eight hours monthly performing payroll functions. That's 12 full business days a year that could be spent generating sales, prospecting for new business opportunities, improving products or services, or servicing customers.

 

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Topics: Payroll Loan, Payroll Processing, Payroll Tax, Payroll Options, Construction Bookkeeping And Accounting, Contractor Tips, Payroll For Construction Contractors

Doing something different is hard. Do you feel like everyone else is the most brilliant person in the room, and you just don't get it? Getting into a rut and repeatedly doing the same things is easy.

 

If those things work, then yes, continue to do them repeatedly. The problem is when something is not working, and you continue down the same path expecting a different result. The opposite of too much change can create another form of chaos. How do you know what is broken if you change a zillion things all at once?

 

Looking for ways to make your job easier is the goal of all construction contractors. The last thing you want to hear from your staff or a trade contractor is, "Do you want me to do that over?" Your answer is "No!" (thundered, with many extra words). What you expected was that your staff did it correctly the first time.

 

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Topics: Construction Bookkeeping, Construction Accounting, Construction Bookkeeping And Accounting, Contractor Tips, Accounts Payable For Contractors, Accounts Payable

There comes a time for every small business to raise its prices. While it may seem scary, remember that it's your job to keep costs fair for you and your customers. That means you have to charge prices that work for you and allow you to remain in business. 

Am I Not Charging Enough?

Knowledge leads to profits and cash flow. What makes knowledge powerful? Use of knowledge. In this cutthroat construction industry, you may not be able to outgrow your competition forever, but you can always outlearn them.

Knowing The 80/20 Rule For Construction Contractors will surely help:

• 20% of your customers typically generate 80% of your net profit 
• 20% of the goods or services you sell contribute 80% of your revenue
• 20% or 2 out of 10 of your staff create 80% of the value for your customers

The frightening consequence of the 80/20 rule is that 8 out of 10 hours we spend at work drive almost no value to the bottom line, and the most significant drain is trying to save money doing our contractor bookkeeping instead of reviewing the Key Performance Indicator (KPI) Reports. 

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Topics: Construction Bookkeeping And Accounting, Contractor Tips, Contractor Guidance, Pricing Jobs, How To Charge Clients, How To Raise Prices

Payroll is one of those things that starts quite simple. You build your construction business, hire a few employees, and things tick along pretty well. It’s straightforward enough to keep everything in line at first, but what happens to most companies is that they grow!

 

However, having an employee is different than when it’s just you meeting the client, doing the work, and collecting the money. The dynamics change when you hire that outside person. You need to be even more cautious when considering hiring a friend or family member instead of a stranger because success has a thousand fathers while failure is an orphan! Success or failure could mean choosing between peace and harmony in your personal relationships or giving away a portion of your hard-earned fruit.

 

 

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Topics: Payroll Loan, Payroll Processing, Payroll Tax, Payroll Options, Construction Bookkeeping And Accounting, Contractor Tips, Payroll For Construction Contractors

Accounts Payable keeps track of the bills owed to a supplier or subcontractor.

 

A proper Construction Contractor Bookkeeping System uses the Accounts Payable feature to track unpaid bills. The bank wants to get paid, and unlike the contractor who is embarrassed to call an old customer, the bank is very willing to call early and often for any outstanding payments due. Again, the banker wants to know how long it takes to pay your bills.

 

Another reason to keep a proper Construction Contractor Bookkeeping System is to be sure you did not overpay a supplier or subcontractor, cell phone, the internet, liability insurance, vehicle insurance, and more.

 

The bills keep coming depending on your payment schedule; you may receive the past reminder notice before the original invoice arrives. Some utility companies have a history of what appears to be randomly sending the original bill.

 

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Topics: Construction Bookkeeping And Accounting, Contractor Tips, Accounts Payable For Contractors, Accounts Payable

The key to making Xero Accounting Online work is ensuring your account is correctly set up and maintained. Perhaps you own a service and repair firm specializing in plumbing, electrical, HVAC, or maybe a handyman service or someone who does small construction projects that last from a few hours to a few days, and you only need to give your customer or client one invoice?

 

Suppose you've just started working with Xero; making a few mistakes while learning is expected. We see pretty common errors - and unfortunately costly - so you should be aware of them if you want to get the most out of Xero's powerful cloud accounting system. 

 

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Topics: Xero For Construction Companies, QuickBooks Online Converted To Xero, Construction Bookkeeping And Accounting, What Is Xero Accounting Online, Contractor Tips

Several aspects of the construction business can only be learned through experience. One of them is negotiating contracts.

 

Most people fear the negotiation procedure because it is an intrinsically uncomfortable process. Asking for more money or making personal demands doesn't come naturally to everyone. But with the right toolkit, you can breeze through contract negotiations. And you'd better get used to it because you'll have to handle many contracts whether you're a construction company owner or employee.

 

Having the right mindset is critical to contract negotiations. You have to believe that you are going to get your way. Bring a positive attitude and a smile to the table. You're not signing contracts with the enemy. The people you're negotiating with will be your business partners in one capacity or another.

 

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Topics: Construction Bookkeeping And Accounting, Contractor Tips, Contractor Guidance, Construction Business Negotiations, Negotiating Contracts

Cash flow refers to the movement of money into and out of your business. It's based on the amount of money you bring in minus the amount you spend. A positive cash flow means bringing in more than you're spending. A negative cash flow means you aren't bringing in enough to cover your expenses.

 

Your construction company can run into problems by not charging enough for goods or services, having late-paying clients, growing too quickly, or simply spending too much money.

 

Solid cash flow management is vital to ensuring your contracting business survives, but not everyone understands what cash flow is or how to manage it. That's likely what makes it a leading cause of stress for small business owners. 

 

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Topics: Construction Cash Flow, Cash Flow, Construction Bookkeeping And Accounting, Increase Cash Flow, Construction Systems And Processes, Contractor Guidance

Every day you make financial decisions about your company, which affect how successful and sustainable your construction business is. If you're responsible for the bookkeeping and all the paper management (bills, receipts, estimates, invoices), you could be making errors that affect your decisions. Because of an incorrect decimal place, you may think that you have more money in the bank than you do. Or you may not fully understand how a decision today affects your business tomorrow.

 

Keeping up with paperwork is a typical construction business time waster we noticed in more than thirty years in the industry. Doing your books often winds up costing you more money in the end, not to mention the time and energy that goes into a task you despise or, at the very least, don't fully understand. 

 

This is one area that many construction company owners hate to be part of but still choose to take responsibility for.

 

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Topics: Bookkeeping Services, Construction Bookkeeping And Accounting, Technology For Your Construction Company, Construction Systems And Processes, Contractor Guidance