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

When a business starts, it’s natural for the owner to be a jack-of-all-trades. You may not have the capital to hire specialists or access the technology to help you. As your business grows–or as you look to take a minor role in your construction company–you may find the industry has become over-reliant on you, which makes it difficult for you to take a step back. 

Have you M.A.P.ped your business yet? Consider this before retreating and delegating:

• Marketing - never sells more than Production can provide; on-time and on-budget
• Accounting - manages the money to maintain operations and produce a reasonable profit
• Production - delivers the project intending to exceed customer expectations

As you know, we are big on Marketing, Accounting, and Production; having a basic operation manual in place for your office, remote, and field employees pays off in the long run.

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Topics: Construction Strategy, Systems And Processes, Construction Company Cash Flow, Contractor Tips, Contractor Guidance

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

Many data support the idea that it's less costly, easier, and more efficient to encourage repeat customers than bring in new ones. Among the stats Hubspot lists are: that a 5% increase in customer retention is responsible for more than 25% increase in profit; repeat customers are nine times more likely to convert than first-time visitors, and a 2% increase in customer retention has a similar impact to your bottom line as reducing costs by 10%.

Understand The High-Profit Client - Most of them have personality traits commonly known as drivers - folks who are accustomed to getting things done quickly and efficiently. They do not mind paying professionals to service, repair, or build new construction projects related to their houses and commercial buildings.

Design and develop your internal customized systems and processes when and where it makes sense. As much as possible, when it is cheaper to buy something ready-made for a fraction of what it costs you to do-it-yourself then buy it.  

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

You may be getting your construction projects done with sheer willpower, but the lack of processes, business plans, and strategy will eventually wear you down. You can either keep on "Powering Through"- spend your life endlessly chasing details, missing appointments, suffer untold losses in cash flow and profits, or you can start developing a plan and work on your business.

 

Successful contractors improve processes all year long. Your construction company can benefit from an excellent system that other successful contractors are using now, which means there is no need to "Reinvent The Wheel." As your construction company grows and evolves, your processes can support the controlled and planned expansion.

 

Along with trying to keep on top of your construction business, the unfortunate reality is that most business owners don't take proper holidays. Usually, this is because their business relies on them, and they don't have the support to keep the business running without them.

 

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

Balancing customer experience and setting client expectations against your time and budget is a difficult task. It would be best if you had excellent planning, efficient project managing, and perhaps the right amount of staff working to keep customers happy, but not so many people that workers are standing around looking for things to do. 

 

If your customers have long wait times, that's good news for you initially—it means your business is popular. The bad news is that homeowners won't wait around forever for you to fix your time management issues. If they like your services, they'll be a bit forgiving, but too many long waits will send them to your competition.

 

For instance, when a homeowner decides to remodel their living space, they dream about how it will look and feel when it is done, but they have no idea what an emotional roller coaster is in store. 

 

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

If you're looking to grow your construction business, you might consider expanding your service offerings. Adding additional services is an excellent way to increase your profitability, diversify your income and expand your market. But there are essential things to consider before adding to your income streams.

 

First things first - find the money. If you don't have savings earmarked to fund your ideas, you'll want to make sure your "scaling my construction business" plan includes adequate financial planning. Applying to a lender for a business loan is one option. In this case, you'll want to include up-to-date cash flow reports, income statements, budgets, and projections in your plan for a potential lender.

 

If your construction business doesn't have a credit history, you may need to look at other options for financing your plans. Using a business credit card regularly and paying off the balance can help you build a good credit rating, which will help you prepare to apply for a loan down the road.

 

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

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