Accounting has two sides:

Internal Accounting (Management Accounting) - for making money. Its purpose is to help you operate and grow your business profitability.

External Accounting (Tax Accounting) - for paying taxes. Its purpose is to prepare tax forms, report your income, and make sure you pay your fair share of taxes.

Understanding the difference will impact your company's financial health and wealth. Both groups of accountants must know the relationship between your internal bookkeeping and the Internal Revenue Service, and the importance of paying the right amount of taxes. There are a lot of professional bookkeepers, accountants, and tax preparers and they all serve a different role in your business.

There is a thread of success weaved into the fabric of the most successful, wealthiest, consistently most profitable house builders, general contractors, residential remodel contractors, flipper house contractors, commercial tenant improvement contractors, sub-contractors, specialty contractors, handyman, architects and designers and over 100 other types of contractors and construction-related companies - they adapt to a continually changing environment.

Everything in the Universe is in balance, and parts of it are easy to see and understand and some parts are hidden in plain sight and require some effort to see and understand. Your ability to look beyond the initial statement and understand the hidden meaning why successful contractors adapt to change to survive and thrive will serve you well. The truth is the most successful, wealthy, highly profitable construction contractors don't like change.

Job Costing, in its simplest terms, links the money you spent on a job against the money you received to do a particular job. It is the process of tracking all the costs related to a project to determine its profitability.

A common misconception is that Job Costing is only for large contractors with a dozen employees. Since keeping track of all costs and expenses involves a lot of additional work for contractors and field workers, and most construction company owners do not see an immediate benefit, some contracting businesses still haven’t implemented Job Costing procedures despite the financial risks.

Our winning strategy talks about Marketing as the foundation, Accounting as the center of your construction business, and Production where the rubber meets the road, or if you please, this is where all the planning and support structure pays off.

Some contractors and construction company owners believe in maximizing production by driving everyone from the laborers to the Project Managers to work harder, longer, faster, hustle and run. And if they are giving less than 110% to the company they are not doing enough. You may have different opinions on this but one thing I've learned from experience is that construction meeting process increases productivity.

Right now, if you are like most construction company owners, your construction accounting records are in an unlocked file cabinet, or worse, sitting on someone's desk. As an accounting firm, our client's privacy and security remain our top priorities and are continually looking at ways to develop and evaluate our system to prevent breach and network holes. We utilize 128-bit Secure Socket Layer encryption which ensures that all data passed between the web server and browsers remain private and integral. There are two levels of restrictions and passwords must be entered before you can get your data file.

At some point, we probably had similar situations having employees we wonder why we hired them.

No one feels worse about a bad fit than the contractor when an employee needs to be let go gently or immediately fired. Other times anger is the first emotion when fraud, side jobs or other forms of theft has occurred.

For the contractor business owner, the work must go on. Schedules need to be kept, and the additional workload falls on someone. That someone could be you, your spouse and/or both of you (who are already overloaded with tasks). Frustration comes from trying to discover quickly and easily what was left undone, what is the most critical, when can it get done, how to get it done and who is the best person to do it (yesterday). 

Although not intentional, this could be considered a part 2 of last Friday’s blog/podcast episode or a continuation post dedicated to all brand-new contractors who just started their own company, to trade professionals who would like to restart their bookkeeping system, or simply to all our valued email subscribers – old and new.

The time, effort, and money you’ve put through in running your construction business is a testament of your commitment to this industry. So, let me start this guide by telling you to do what you do best and outsource the rest. The “rest” as you know, is where your cash flow and profit depend – construction bookkeeping and accounting.

Would you like to start a construction company but can’t seem to move forward with your plans? There are a number of people who pass advice on how to start a profitable construction company, however, very few have actually done it. Hardly any of the ones that had done so had a clear understanding of where they were making or losing money, some have never gotten past the point of owning a J.O.B. (Just Over Broke) into a real company with employees who actually generated more money than they cost starting up.

I am one of the few that has done it all and hopefully, this article will be of use to you. First, make sure you are open to a Paradigm Shift. According to the Merriam-Webster online dictionary, a paradigm shift is an important change that happens when the usual way of thinking about or doing something is replaced by a new and different way.

Organizations and industries, no matter the career discipline, is fully invested in coordinating and taking part in conferences, summits, expos, and exhibits. Industry trade fairs are remarkably relevant to construction company owners because it leverages traditional marketing practices without being intrusive (because your target market comes to you), fosters real, solid relationships, and promotes camaraderie among your associations.

Construction Bookkeeping is something you need to understand first, then learn. Over the years, hundreds of people have told us how easy QuickBooks is to use and how hard QuickBooks For Contractors is to use, and that is so true.

Here is what I see repeated many times among construction companies: You usually hire an “office admin with experience in QuickBooks," ask your spouse or significant other to do it for you, or you try your best and do it yourself. Some would take the time to hire an in-house bookkeeper – not knowing what they need is a Construction Bookkeeper/Accountant.