Apr 8, 2016
Since The Early 2000's More Construction Company Owners Have needed two or more incomes. We have met with contractors from several groups:
Group One - Skilled Craftsman or Craftswoman is trying to grow a construction company while their spouse or significant other has a job with another company usually unrelated to construction. Today it is more common to see both partners are self-employed and operating a Construction Company.
Construction Companies And Other Businesses Owned By - Related business partners and business types can be merged into a single QuickBooks file and that always causes all kinds of trouble!
When The Individual Household Partners - File their annual tax return jointly the tax prepare who files the annual Income Tax Return looks at all the business and personal financial reports and is the final authority on what can and cannot be merged together on a single tax return.
Most Tax Returns Are Several Dozen Pages Long - With much of the information duplicated on both the personal and business returns which is why we recommend you hire someone who specializes in preparing annual tax returns NOT A Jack-Of-All-Accounting-Trades-Master-Of-None.
We do not prepare annual tax returns; we do process Payroll and prepare Quarterly Tax Reports.
Why Do We Believe Strongly That You Need Individual QuickBooks Company Files?
Even With Related Personal Partnerships - (married couples) each individual business types are not related and require they own Federal Tax ID Number (EIN).
This creates the need for two or more QuickBooks files.
For Example - One company is a General Contractor and the other company is an Interior Designer and/or Exterior Landscape Designer or it could be one partner is a Construction Contractor and the other partner has an Event’s Planning business.
Multiple Companies In QuickBooks - QuickBooks will support
multiple company files, Learn More... If one partner uses a Mac
Computer and the other partner uses a PC you can both access
QuickBooks windows version using our QuickBooks in the Cloud.
Individual Ownership - Of each company is not by the same parties.
Company Ownership Issues - Business partnerships between unrelated people makes the day to day accounting even more complex. Who handles the bookkeeping can range from “Everyone” is helping to write checks and “No One” is doing the actual bookkeeping. Which leads to a situation known as QuickBooks Out Of Control!
Common Practice - Money is coming / going between accounts of non-related companies and expenses are paid by a multiple of accounts either business / personal / or by others except the business checking account of the actual company.
When Company Funds Are Used - There is a need to track the flow of funds to / from each of the company QuickBooks files. Our focus is Contractors – we also focus on the business finances of our clients. Where did the money come from (Income / Personal funds / Money from others) – and where did it go? (Expenses / COGS / Taxes / Personal Draw) For this reason when the second / third / more company is “non-medical” we recommend that we handle the bookkeeping for all of the company files.
Common Practice - Money is coming / going between personal accounts to pay business expenses by family members or non-related household members.
Example - Contractor uses personal credit card and would like to be able to show the expense in QuickBooks file….Yes they should have used a company credit card; however, you were at the store, you needed some material to finish the job and did not have the company credit card with you or it may have been maxed out. So you did what you needed to do to get the job done!
Example - Girlfriend or Boyfriend pays from their personal account for expenses like vehicle insurance / bond / contractor’s license / etc. – because it was the fastest way to get it done. Someday she / he would like to be paid back.
How Do You Track All Of It - We have a Bookkeeping System to account for all business expenses. Without properly reflecting all the business expenses the Profit & Loss Statement provide incorrect totals and equals higher taxes.
If The Business Owner Takes Money Out - Under the theme of “It’s Mine” without proper documentation that could cause the Profit & Loss to be incorrect.
Sometimes Clients Want - To keep doing the QuickBooks file for “Their Tiny Little Company” and as time goes on they forget that the funds were handled on one side and missing on the other.
As Construction Bookkeepers - We know what standard and usual types of expenses are. If we see expenses have been paid with personal funds / funds by others – we track it in QuickBooks. If we see that normal expenses are missing – we ask about them…Maybe those expenses don’t exist….Most contactors want to have an idea of the individual profit by job and a variety of other reports
To Meet Construction Company Owners Needs For Specialized QuickBooks Reports – We have to think about What / Why / When / How and then develop the bookkeeping system and reports to provide the answers.
What Reports Do Most Contractors Want?
Why Do They Want To Know?
When Do They Want To Know?
How Do They Want To Know?
We Can Custom Tailor Reports To Fit Your Needs!
I trust this podcast helps you understand that outsourcing your contractors bookkeeping services to us is about more than just “doing the bookkeeping”; it is about taking holistic approach to your entire construction company and helping support you as a contractor and as a person.
We understand the good, bad and the ugly about owning and operating construction companies because we have had several of them and we sincerely care about you and your construction company!
That is all I have for now and if you have listened this far please do me the honor of commenting and rating podcast www.FastEasyAccounting.com/podcast Tell me what you liked, did not like, tell it as you see it because your feedback is crucial and I thank you in advance.
I trust this will be of value to you and your feedback is always welcome at www.FastEasyAccounting.com/podcast
This is one more example of how Fast Easy Accounting is helping construction company owners 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 construction contractors like you so stop missing out and call Sharie 206-361-3950 or email firstname.lastname@example.org
Thinking About Outsourcing Your Contractors Bookkeeping Services?
Click On The Link Below:
This guide will help you learn what to look for in outsourced construction accounting.
Need Help Now?
Call Sharie 206-361-3950
Thank you very much and I hope you understand we really do care
about you and all contractors regardless of whether or not you ever
hire our services.
Bye for now until our next episode here on the Contractors Success MAP Podcast.
Randal DeHart | Contractors Accountant