May 26, 2017
Contractors, Bookkeepers and Tax Accountants are trying to keep everything all in one place. That is great. A single bank account on the surface is the answer in simplicity.
Why – when putting everything in one
bank account; it could be a FINANCIAL
Go to Home Depot, Lowes or any other larger store.
Use your debit card; Drop or lose your debit card,
Someone finds it and buy stuff until he or she have spent all your money!
(may be a little harder with the chip but how many places can you run your debit card as a credit card?)
Just as there are Common Sense rules about Sharie’s Cash Management 101Tips, there are common sense rules about mixing multiple companies in a single QuickBooks file:
Everyone can own Multiple
Depending on the structure if the financial statements are on a Schedule C And 1040 or 1120S (S-Corp) or other return that in turn rolls up into The Contractors personal 1040 return.
The annual tax return is pages and pages long (feels like a zillion if you have to make paper copies)
Your banker wants the 1st two pages of your personal 1040 Annual Tax Return.
If you need commercial accounts, Dun & Bradstreet wants the 1st two pages of your business tax return. Why because the 1st two pages is the summary of all the pages and worksheets that follow?
As a Construction Contractor, you need the details of the balance of the pages to run your business.
How do you know how much money each company is making?
I can think of several examples of multiple companies being in a Single QuickBooks File.
Husband has a Construction Company and Wife has a Non-Construction Company all mixed together.
Next example: Construction Company, Non-Construction Company plus a few Flipper houses for friends, and a few rental homes for themselves. Add in a few side jobs that are Professional Services.
The word MEGA-MESS comes to mind:
In Washington State – Plumbers are at the field rate for workers
comp even when they are cleaning their truck at the shop.
Why? Because Labor & Industries “Says – cleaning the truck is
all part of the job.” No Lower Shop Rate is allowed.
Overhead is different for each of the following companies:
Mixing Companies in a Single QuickBooks File:
The Construction Bookkeeper will try to keep your chaos straight
and fight a losing battle with reality. What will not happen is
good Financial Reports.
The “What About’s” is just “White Noise” as The Contractor who insists on everything in a single QuickBooks file against all advice will benefit from “The Mess.” (Notice I did not say benefit in a positive way)
QuickBooks Desktop is fantastic for Construction Contractors to get good reports. (Remember, Garbage In = Garbage Out)
Reports cannot be better than the information given. Think Lumber – Standard & Better or Stud Grade is much better than the grade that is commonly referred to as airplane propellers. Specialty Lumber Yards have a variety of quality lumber.
A single project may have multiple grades of lumber. It’s a Science to use the right piece of lumber in the proper application to last the longest. Basics are that you can pound a nail in every kind of wood. Next Question – Which type of nail?
Everything about Accounting Especially Construction Accounting is the intertwined:
I would like to believe that you have a real desire to make
changes that will make the lives around you easier and therefore
you will get the financial and other job costing reports easily and
Of course, if you hired an Admin Assistant who is expected to act as your Office Manager |In-House Bookkeeper and has No Bookkeeping or QuickBooks Skills than you pick the phrase that best suits you.
With messy QuickBooks – each time money is moved between companies it usually Looks Like Income and by default treated as Income, and you could pay far more in taxes than you saved by mashing everything together.
Looking forward to helping you make 2017 be a Better Year?
Thinking Happy Thoughts.
I trust this podcast helps you understand that outsourcing your contractor's bookkeeping services to us is about more than just “doing the bookkeeping”; it is about taking a 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 to 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
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 do care about
you and all contractors regardless of whether or not you ever hire
Bye for now until our next episode here on the Contractors Success MAP Podcast.
Randal DeHart | The Contractors Accountant
#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
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