Every business needs a financial plan. Your financial plan gives you a way to monitor and review your cash flow, make adjustments to your spending, and anticipate any upcoming economic issues. It can also make you more prepared to request funding or find investors so you can bring more money into your construction business.

 

Although many business owners are aware that financial planning is essential, it is often overlooked. Without a financial plan, however, you could find your business doesn't make the money you expected it to—or you could wind up with unanticipated expenses and no way of paying for them.

 

If you are a contractor, you are most likely a "doer," someone who gets things done, not now but right now! When you see anyone not swinging a hammer, drilling holes, pouring concrete, laying carpet, putting paint on the walls, or a thousand other construction tasks, the first thing you think is they are wasting time and money, and you want no part of that nonsense!

 

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Topics: The Contractors Account, Construction Bookkeeping And Accounting, Systems And Processes, Business Planning For contractors, Contractor Tips, finance

Owning a construction company and being an employee requires different mindsets and attitudes or paradigms. Both positions are natural enemies and generate tension, leading to various diseases; mental, physical, emotional, and spiritual.

 

Construction workers live in the real world, where everything can be seen, heard, felt, tasted, and sometimes smelled. They can look around and see evidence of their activities. Their long-term time horizon in years past was two weeks, which is why most payrolls are paid every two weeks. With various check cashing and payday loan outlets, their long-term time horizon has been replaced with now and right now!

 

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Topics: The Contractors Account, Contractors Bookkeeping Paperwork, Construction Bookkeeping And Accounting, Systems And Processes, Contractor Tips

Randalism: A Partnership is the only ship designed to sink.

However, we understand your preference, so I would like to talk about it in this blog post.

Joint ventures are a bit like change orders. They can be an incredible opportunity to make or lose much money very quickly. Almost as quick as betting money on a roulette wheel in a casino.

Joint Ventures have their own accounting rules. The devil is in the details. How costs and profits are shared among the participants depends on how the joint venture is structured and the terms of the agreement.

Contractors with annual sales of less than $10,000,000 often get together to work on a specific project. They find a friendly competitor to supply labor and equipment for a percentage of the job, hourly fee, or a flat number. This could technically be a "Joint Venture"; however, the time and scope are generally short and sweet. For example, a concrete contractor may have a large project requiring more finishers than on staff.

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Topics: Construction Bookkeeping And Accounting, Contractor Tips, construction business partnership, business partnership

Every business experiences slow periods when the market for their goods or services lessens and sales drop. Construction business owners like you might be tempted to view downtimes as unproductive or wasted, but there are ways you can make the most of your business during these seasons.

Here are five ways to ensure this time isn't wasted:

1. Take a good look at your business

When things are busy, it gets easy to fall into a habit of taking care of day-to-day tasks and forgetting your overall business picture. However, slower times are an excellent opportunity to step back from the daily grind and ask yourself if your business is still moving towards its goals, what opportunities or challenges are on the horizon, and whether it's time to try something new.

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Topics: Construction Bookkeeping And Accounting, Construction Company Cash Flow, Contractor Tips

Emergencies can happen in the blink of an eye. Gmail, Yahoo, MSN, and social media are all in the cloud. When disaster strikes, flood, fire, theft, earthquake, or a lousy bookkeeper deliberately destroying business records or computer crash, you are protected against data loss by these online programs. Buy another computer, set it up, and you are back in business.

 

What about your bookkeeping records? Your customer list? Who owes you money? Who you owe money to? Payroll? Employee advances and loans?

 

Job deposits, sales tax reports due, the list goes on. You never realize how much you depend on your Construction Accounting System until it is gone forever!

 

What about your contracts, bids, other hard copies of documents you use to operate and grow your construction company?

 

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Topics: Cloud Based Bookkeeping Services, Construction Bookkeeping And Accounting, Systems And Processes, QuickBooks Desktop Cloud, QuickBooks For Contractors Cloud, Contractor Tips

You started your contracting company to have fun, be your own boss and do the work you love. Now you are overwhelmed with paperwork, and the fun is gone!

 

One of the biggest struggles construction business owners deal with is the overwhelming amount of paper they have to organize as part of their everyday tasks. Invoices, receipts, bills, contracts, client records, pay applications, insurances, licenses - are just among the few in the seem to be never-ending "etc."

 

Keeping essential 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.

 

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Topics: The Contractors Account, Contractors Bookkeeping Paperwork, Construction Bookkeeping And Accounting, Systems And Processes, Contractor Tips

Some construction business owners find themselves in the difficult position of running a business that appears to be profitable but still having no money in the bank. It's a critical situation to address. After all, a lack of adequate cash flow is one of the leading causes of small construction business failure. 

 

Here are three reasons why profitable construction businesses have little money in the bank and what company owners can do to handle these tricky situations. 

 

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Topics: Construction Bookkeeping And Accounting, Systems And Processes, Contractor Cash Flow Problems, Construction Company Cash Flow, Contractor Tips

Still Doing Your Payroll?

At face value, it seems like a great idea.

 

If you're a small construction business owner with just a few employees, you probably think hiring a payroll specialist is an expense that you can avoid. 

 

You feel that you can handle it yourself. You have the best intentions to keep your staff paid and on time. What could go wrong, right?

 

Well, lots. Here are 3 reasons why you should stop:

 

It's a time waster

If you don't have a finance background, you'll likely spend a substantial amount of time calculating employees' work hours, computing for taxes and other deductions, creating payslips, processing, and filing.

Even if you have a bit of a bookkeeping background, are you sure you want to spend your precious time doing these tasks instead of focusing on your construction business's core aspects?

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Topics: Payroll Processing, The Contractors Account, Payroll Options, Construction Bookkeeping And Accounting, Systems And Processes, Contractor Tips, Payroll For Construction Contractors

Making decisions never ends for contractors like you. Being adaptable is one of the basics of good decision-making skills.

Think of decision-making as being in a bumper car. You are continually driving and trying to avoid the other bumper cars. Suppose you hit one you back up and go again (reminder this is the only safe place to hit other vehicles). The 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.

Translate this to a typical daily life of a construction contractor:

• The paperwork, processes, and decision-making are never-ending
• The concept of time is all about 10 minutes
• Your coffee brews in less than 10 minutes
• Take a shower in less than 10 minutes
• Load the dishwasher in 10 minutes
• Take out the trash in less than 5 minutes
• Read your email in less than 5 minutes
• Decide what bills to pay in less than 5 minutes
  

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Topics: Ten Minutes A Day To Increased Construction Profit, The Contractors Account, Construction Bookkeeping And Accounting, Systems And Processes, Contractor Tips

Each contractor type has unique construction accounting needs, which means if the QuickBooks process is custom-fitted to each construction company's needs, it is a beautiful thing.

We have listened as our contractor clients have described to fellow contractors how "fast and easy QuickBooks is and what wonderful reports it generates," while the other contractor will tell in no uncertain terms what a piece of junk it is. The difference is in the QuickBooks set up. Two woodsmen will cut and stack vastly different firewood piles in a day if one uses a chainsaw as it was intended and the other uses it as a cross-cut saw. Same tool, different result!

QuickBooks users are generally not stumped by the software; they are confused by the accounting information necessary to complete the transactions. Quick access to correct information is essential to maintain the accuracy of your financial records.

There are no limits to the number of items that can be entered into QuickBooks improperly. Messy files build transaction by transaction or merely put invoice by invoice, receipt by receipt can all be entered into QuickBooks incorrectly. No pop-up will say, "This Is WRONG" – Do It Over.

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Topics: Ten Minutes A Day To Increased Construction Profit, The Contractors Account, Construction Bookkeeping And Accounting, Systems And Processes, Contractor Tips