Contractors Are Selling Their Time First, Skill Second
Value of Time – Your time as the Contractor is the most valuable. I hope you are doing the tasks that only you can do. Yes, you can do your contractor bookkeeping. My question is: Why Would You?
Your answer – I have a cash flow problem. Spending hours doing your bookkeeping will not solve that.
In fact, doing contractor bookkeeping yourself will be painful, take time away from the things you do that make you money and take a lot longer than having someone else do it.
Why, because every piece of paper has a story and your brain wants to replay the story (fast or slowly depending on the story). Say for example you waste an extra minute on every piece of paper. How long will it take you to finish all of the bookkeeping chores for the day, week, month or longer? This is after you have QuickBooks setup for your construction company and you know exactly what to do with that piece of paper.
As a Contractor who is serious about their business. There is only one answer to cash flow issues.
Sell Your Way Out of A Problem (author unknown). With money in hand, you can make better decisions.
For Some People, Sales Is An Ugly Word. Reality Is Everyone Is Selling And Buying
You are choosing what to purchase and when
- You Need Something (a new truck)
- You Want Something (a fancy truck)
- You Must Have Something (a tiny vehicle)
Since the beginning of time Children have figured out how to get where they want to go
- Walking will get you where you want to go, it just takes longer
- Skate board is another mode of transportation
- Then the bicycle
- Mom and Dad are the default transportation
Mom and Dad are usually the favorite sources for transportation depending on the activity. It is much easier to take all the soccer equipment, baseball equipment, and football stuff other activities.
- It’s about sports,
- it’s about friends,
- it’s about dating,
- it’s about transportation
Who sold who on the benefits of after school activities? The Parent or The Child?
The bigger commitment, in the beginning, is the parent in both time and money. We want the best for our children, and that includes additional activities, opportunities to make friends and preparing them for their future will skills and opportunity for college (if desired).
I remember a year juggling multiple after school activities – that was a busy season. It took planning to do multiple drops, pickups and spending time watching each sport in action. The practices, the games, and the matches. Yes, I pushed our children to do the activity. Some they liked, some they didn’t.
The selling begins when our children become teenagers and want to learn to drive and then borrow the car. Before then, it was all practice.
Because we want them to grow and mature, we plan from the moment they arrive until the moment they launch out on their own. We still plan, nurture and support from afar. Isn’t email, instant chat, Facebook and other social media wonderful? We can offer suggestions and try not to be offended if our children roll their eyes, chat with others and say “there goes Mom or Dad again” Of course, our children miss the humor when we as parents refer to each other of a Classic Movie or TV Series.
Many of you have searched Fast Easy Accounting.com website, read the blogs and listened to our podcasts. Thank you! We try to be as clear as possible, in our opinion what works, and what doesn’t.
We understand Construction Contractors and Construction Bookkeeping and Construction Accounting.
Offer One Hour Free Consultation To Chat About Your Business.
Discussion includes the following:
- What have you been doing so far?
- How is that working for you?
- Are you getting the results you desire?
- What area of Construction do you focus on (new, remodeling, service & repair, handyman, other services)?
- Are you a Home Builder, General Contractor, Specialty Trade Contractor, Handyman, offer Professional Services?
- How are you doing your bookkeeping?
- What accounting software do you use, if any?
- Do you have W-2 employees, 1099 Contractors, both?
- How do you invoice your clients?
- What do you want for us to do that would be helpful in your business?
In Our Opinion - Biggest issue contractors have paperwork.
Part of that paperwork is creating proposals, contracts, changes orders, invoicing the client, collecting the money which all needs to happen before you can pay the bills.
Hint, vehicle expenses, liability insurance, cell phone and other overhead costs happen even if you never make a sale.
Sales 101 – Signed Documents. In an age of electronics, just sending an email with a proposal and getting a verbal “Yes” is great until the customer decides not to pay.
Sales 201 – Signed Change Orders. Customers already remember when you are deducting something.
Many times customers conveniently forget the part where what they are adding costs additional and is replacing what you deducted.
Sales 301 – Get The Money, Invoice early and often. Especially on big ticket items. The longer you wait between billing periods, the more likely your Customer will look for reasons not to pay. Call it a draw if you need to but get the money. I cannot stress this too often. The Term OPM (Other People’s Money = Job Deposits)
Sales 401 – New Trend I have heard stories of customers (not clients) altering the pricing on the proposal document.
Sales 501 – You add value to the lives of your clients. Homeowners are not going to offer a check when they sell their house. Hint – many contractors create deals with Investors where they will get paid a percentage of the profit when the house sells. Don’t count on it!
We see the paperwork from Builders, General Contractors, Specialty Trade Contractors, Handyman. It is heartbreaking when a Contractor goes out of business due to poor paperwork.
We continue to look for new ways to help our clients with improved processes, additional software that works easily. As a Construction Contractor, you already have too much to do. We are here to lessen the load, not make your life harder.
Never Too Small - We specialize in working with the Brand New Startup, Handyman, Specialty Trade Contractor or General Contractor who is doing all the work (no employees to less than ten employees). As a Construction Contractor, you can choose the type of contractor you want to be:
The Four Types Of Contractors
Dog And Pick-Up Truck
This Wonderful Soul - Has a heart as big as the outdoors and likes working alone. They are easy to get to know. They usually have either a pick-up truck or a van with a dog sitting in the passenger seat hanging his head out the window watching and occasionally barking hello to folks and other dogs while feeling the breeze as the contractor zooms down the road.
They Do Not Think About - Retirement and when asked about it the reply I get most often is something like “Retire, nope, I don’t need new tires yet.”
These Contractors - Enjoy being their own boss, doing what they want when they want, how they want and works hard. They typically do not feel the need or desire to grow the business or hire employees since they would only get in the way.
Most Of Them - Run their business as a sole proprietor
They Generally Earn - $20K to $40K a year after all expenses
Salt of The Earth
This Wonderful Soul - Also has a big heart; just not quite as big as all outdoors. They like having employees because they do not want to work alone. As their business grows, they like to take time off and enjoy travel and vacations.
These Contractors - Have one, two or three employees because when the employees get out of line, the contractor can hold two of them by the throat; one in each hand and eyeball the third one! This is called “Construction Management.”
This Group Will Usually Invest - Some money to build a retirement nest egg.
Most Of Them - Operate their business as a C-Corporation, LLC or Sub-S
They Generally Earn - $40K to $60K a year after all expenses
The Professional
This Wonderful Soul - Also has a big heart; they just tend to keep it under cover. This group tends to have more employees and have a structured approach to their construction company treating it more like a firm.
These Contractors - Tend to have 1-20 employees with formal organizational charts, processes, and systems in their contracting businesses including a formal documented business plan which is updated and regularly reviewed with a board of advisors as outlined in my article on the subject.
They Invest Heavily In Marketing - Their businesses. They understand their target market; they use The 80/20 Rule to understand the demographics and psychographics of their prime customer, the ones who generate 80% of the cash and income. And they seek to acquire more of them and will do whatever is economically feasible to turn those customers into lifetime repeat business.
This Group Usually - Engages the services of a competent financial planner, banker, and accountant to work together in helping plan and develop a financial estate that can take care of them in their senior years and be passed on to future generations.
Most Of Them - Operate as a C-Corporation, LLC or Sub-S or Partnership.
They Generally Earn - $100,000+ a year after all expenses
The Enterprise Level
These Construction Firms - Have 100+ employees and generate enormous revenues. Most of the owners and managers earn about the same as a well-run professional contractor. In a lot of cases, their life span is shorter than any of the other contractors due to the enormous stress they suffer trying to navigate their construction companies through the ups and downs of the Business Cycle.
The Managers Deal With Issues - That is beyond anything the previous groups even think about, including labor unions, government oversight, massive risk and are constantly under pressure to increase shareholder value at any cost.
Seagull Management - All too often a board member or powerful outside influence without a clear understanding of all of the moving parts involved in running this type of company feels the compelling need to fly in, crap on everything and everyone with their crazy ideas and fly out leaving a disaster to unfold. Then when things go bad, the managers are the ones most likely to pay the price.
The Odd Thing Is - It always looks like a fun job until someone gets into it. Having worked with a few of these firms, I understand the enormous pressure they are under and have decided my life is too short to spend one more minute with them. All I can do is pray for the managers and ask that all of them will receive divine guidance to stop them from making a long-term decision like suicide or worse, based on short-term problems.
I Am Sincerely Concerned - About the health, wealth and spiritual well-being of all contractors. I have found the other three types of contractors to be well grounded spiritually. However, the special challenges of running an enterprise construction company I sincerely ask you as a friend; someone you may not have met, and may never meet on this plane of existence, that you will seek the goodness of an everlasting and ever loving God, whatever you conceive him to be, so we can meet in the future in a better time and a better place.
Do you want to do all of your Contractor Bookkeeping beginning to end? See a list of solutions that may help you save time, money and aggravation at FastEasyAccountingStore.com
We are here to help if you need additional assistance. Looking forward to getting started.
Enjoy your day.
Sharie
About The Author:
Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. http://www.fasteasyaccounting.com/sharie-dehart/ 206-361-3950 or sharie@fasteasyaccounting.com
When You Become A Client - Then we can tap into our resources of knowledge and strategy banks. We use the reports hidden in your QuickBooks in order to diagnose and understand your construction business and develop plans and help you implement a path to success for you and you alone because every contractor has unique Strengths, Weaknesses, Opportunities and Threats (S.W.O.T. Analysis) that when understood can lead to a Strategic Roadmap which cannot help but make a lot of money.
We Remove Contractor's Unique Paperwork Frustrations
Thanks for reporting a problem. We'll attach technical data about this session to help us figure out the issue. Which of these best describes the problem?
Any other details or context?
For Construction Company Owners who do not need the full power of a QuickBooks for contractors and want 24/7 online access we offer Xero Accounting Online, and we have a custom setup for construction companies. Click Here For More.
This Is One More Example of how Fast Easy Accounting is helping construction company owners all across the USA including Alaska and Hawaii put more money in the bank to operate and grow your construction company. Construction accounting is not rocket science; it is a lot harder than that, and a lot more valuable to people like you so stop missing out! Call Sharie 206-361-3950 or sharie@fasteasyaccounting.com and schedule your no charge one-hour consultation.
Profitable Contractors and Construction Company owners have known about the value of outsourced bookkeeping services and contractor coaching services like ours for a long time, and now you know about it too!
Thank You For Reading This Far, And I Hope You Understand we really do care about you and all contractors regardless of whether or not you ever hire our services.
We Scan Your Receipts, And Invoices link the appropriate transactions to QuickBooks or Xero Accounting Online depending on the construction accounting service you are using and provide ongoing Cloud Based Contractors Bookkeeping Services by accountants who understand construction.
Our Contractor Bookkeeping Services System Is A System
Thinking About Outsourcing Your Contractors Bookkeeping Services To Save Time And Money?
Click On The Button Below To Download A Free Guide
Business Process Management (BPM) For Contractors
Need Help Now?
Call Sharie 206-361-3950
sharie@fasteasyaccounting.com
Xero Outsourced Construction Accounting Services
QuickBooks Outsourced Construction Bookkeeping Services
We Are Also Xero Accounting Experts Specializing In Construction Bookkeeping Services
PS: For The Do-It-Yourself Construction Bookkeeper Our Store Has Chock-Full Of QuickBooks Setup Templates, QuickBooks Chart of Accounts And More.
Most Contractors Setup QuickBooks Desktop Version In One Of Three Ways:
#1 EZ Step Interview inside QuickBooks Setup
#2 Asked Their Tax Accountant To Setup QuickBooks
#3 They Attended A How To Setup QuickBooks Class Or Seminar
And QuickBooks Does Not Work The Way They Want It Too!
The Answer:
#1 Click Here To Buy An Entire QuickBooks Setup For Your Specific Contracting Company
#2 Click Here To Buy Just The Chart Of Accounts For Your Specific Contracting Company
