If you are a contractor you know how to get the work done. At the end of your day when your body is tired, your muscles are aching and you are too tired to move is when you ask yourself three simple questions:
- Am I making money or losing money?
- Which jobs and customers are making me money?
- Which jobs and customers are costing me money?
Every Complex Question Has Two Answers
#1 Is Simple And Wrong
#2 Is Hard And Right
The Simple Answer Is to keep doing what you have always done and continue getting what you have always got. Don't pay any attention to your financial and job costing reports until it is time to file your annual taxes and gasp in dismay and horror while asking what happened?
It is like the two guys living in a farming community that started a business buying and selling bales of hay. They had a large truck which they used to buy the hay, load it and make deliveries to their customers. They bought and sold 500 bales of hay every day.
After a month one partner said to the other "If we buy a bale of hay for $10.00 and sell it for $10.00 we need a bigger truck if we are going to make any money!"
We see a lot of contractors, men and women with good hearts; good intentions and very intelligent doing something similar day-in-and-day-out and it cause us a lot of pain because we know there is a better way.
The Hard Answer Is early to bed, early to rise know your numbers and advertise. Knowing your numbers is painful! It hurts your brain for a short while because you are using a part of your brain that may have been sitting idle for a long while. Unless you are a recent university graduate and you studied hard and applied yourself.
The following is a simple Step-By-Step Process to get you started:
Step #1 - Ask your bookkeeper or accountant or better yet your construction accountant for three reports shown below: Profit & Loss Enhanced, Balance Sheet Enhanced and Profit & Loss By Job.
Profit & Loss - Enhanced As Shown Below
Balance Sheet - Enhanced As Shown Below
Profit & Loss By Job - Enhanced As Shown Below
There is a lot of information contained in each of these reports and like anything new if it is the first time you have seen them there will be a considerable amount to digest and understand.
We find that even contractors with highly skilled financial backgrounds have a bit of trouble understanding these reports because of the vast differences between Construction Accounting and Regular Accounting. The good news is any contractor who invests a small amount of time and money will be amazed at how much wealth can be gained from it.
My advice is spend a few minutes and look at them casually and then wait an hour or more and look at them again. Repeat the process by reviewing them every day for 10-15 minutes and make notes about anything that looks interesting. Then set an appointment with your accountant and spend some time discussing them and asking questions.
Just be aware most accountants and especially qualified construction accountants will charge a fee above and beyond what you are paying to have them take care of your Contractor Bookkeeping Services. For our clients Sharie can answer a few simple questions at no extra charge 206-361-3950. More in-depth analysis, business coaching and help with understanding financial and job costing reports will require one of our construction accountants and there is a fee for that.
We Remove Contractor's Unique Paperwork Frustrations
For Construction Company Owners who do not need the full power of QuickBooks for contractors and want 24/7 online access we offer Xero Accounting Online and we have 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!
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
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Business Process Management (BPM) For Contractors
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Call Sharie 206-361-3950
sharie@fasteasyaccounting.com
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About The Author:
Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, QuickBooks For Contractors Expert and Xero Accounting Specialist. This combination of experience and skill sets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and construction accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and Xero accountants to the benefit of all of the construction contractors he serves across the USA. Visit http://www.fasteasyaccounting.com/randal-dehart/ to learn more.
Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Check out our Contractor Success Map Podcast on iTunes and Follow Randal on Google+
