Apr 15, 2016
This Podcast Is Episode Number 0160 And It Will
Be About Contractors Bookkeeping Service Nine Critical
Steps
Construction Bookkeeping Is something you understand then you learn. Hundreds of contractors and regular bookkeepers have told us how easy QuickBooks is to use and yet they cannot understand why QuickBooks for Contractors is so hard to use and it is getting harder every year and I agree with them.
I Have Used QuickBooks For 25 Years and in the early years the DOS versions were very easy because it had a fraction of the features it has in 2016 and the reports were bare bones.
There Are Apps that make almost everything easy including accounting software. Too many contractors find out too late the old adage "You get what you pay for" still applies.
Cheap Construction Accounting Is
The Most Expensive Accounting On Planet Earth
Operating A Backhoe is easy too! I found out just how easy it is to find underground utilities and bring them to the surface with the greatest of ease like the daring young man flying man on the trapeze.
A gentle tug on a lever and water was gushing everywhere! It was very entertaining and extremely costly!
This Is Susan's* Story she answered an help wanted ad from a General Contractor, Brutus Hardway*, who was looking for a super cheap bookkeeper with a deep understanding of construction accounting they had to know how to make his QuickBooks For Contractors give him the QuickBooks financial reports and Job Costing Reports he needed to operate and grow his construction company.
Brutus offered Susan $15.00 an hour for 10 hours a week. Susan as a good heart and she had QuickBooks experience, but not using QuickBooks For Contractors so she contacted us and I invested an hour of my time at no charge to share a quick overview of what I call the Contractors Bookkeeping Service Nine Critical Steps.
*The names have been changed to protect the real identity of Susan and Brutus
A Short While Later - I stopped by to see how everything was going for Susan and her employer. We reviewed the Nine Steps to see how she was using what she had learned.
Contractors Bookkeeping Services Nine Steps
Step #1 Sort Paper Into Manageable Piles And Be Quick About It!
Susan Let Paperwork Pile Up as the contractors, construction workers, USPS mail carrier, shipping and receiving clerks, warehouse workers and other folks that stopped by her desk to leave a few pieces of paper for her to deal with. Always remember the ocean is a collection of drops of water. The piles of paperwork were growing high and wide.
Step #2 Simple Data Entry
After The Sorting was finally done Susan was beginning to enjoy putting in checks, bills and simple invoices because it was easy especially when she did not bother doing the hard work of entering Job Costing information.
Step #3 Payroll And Tax Reporting
Payroll And Tax Reporting - Can bring out the worst in people as Susan soon discovered. In fact some of the other employees suggested she was ready to bite the next person who turned their time card in late and expected to get paid on time!
Step #4 Reconciling Bank, Credit Card And Supplier Statements
Reconciling Statements was something Susan could not grasp during our brief chat because at all of her previous jobs that was never done because it was just too hard! Susan said reconciliations were just a waste of time and busy work and she flat out refused to do them.
When Brutus's Checks Started Bouncing like a box of rubber balls dumped on a concrete floor from a 10' high ladder partly because suppliers were being paid twice for the same bills and partly because checks were written outside of QuickBooks and none of the banks were ever reconciled Brutus got concerned and invited his outside QuickBooks expert and construction accounting and bookkeeping services specialist, Randal, to come to the office and train Susan how to reconcile bank, credit card and vendor statements.
After 20 Hours Of Attempting To Condense the most important critical parts of a 10,000 construction accounting services skill set that Susan needed to be effective and efficient in her position of contractors bookkeeping services over a 5 day period at $150 per hour with Brutus's investment in Susan's training which totaled $3,000 Susan had just enough training to do the reconciliation part of the job.
Randal's Patience Were Wearing Thin because Susan talked, argued and continually interrupted the training tell Randal how different things were at her previous jobs, where the contractors all went bankrupt.
Susan Recalled At Her Previous Job She Had Plenty Of Paid Time To shop online, surf the web, text her friends and train her boss like an organ grinder trains a monkey.
Susan wanted to talk endlessly about how stupid and ignorant her previous contractor bosses were and how none of them knew anything about operating a construction company. If they all would have listened to Susan none of them would have ever gone bankrupt.
In fact, she bragged about posting a running commentary on Facebook and describing in living color and great detail how incompetent her previous contractor bosses were and how she knew every one of the construction companies was going bankrupt.
Randal just ignored it and continued to attempt to train her in construction bookkeeping.
Brutus Knew Susan Needed A Lot More Training; however, Brutus was not about to spend any more money on any direct training.
Brutus kept Susan on his payroll longer than he should have because he was too stubborn to admit to himself that he could outsource his bookkeeping to us for less than what he was paying for Susan's training in the form of bounced checks, missed quarterly tax returns and payments which lead to costly penalties and interest, lost early payment discounts and other expensive mistakes.
During The Quarterly Construction Bookkeeping Services Review Randal showed Brutus a production report that revealed the cost of having Susan on the payroll for twelve weeks was in excess of $1,000.00 a week when Brutus had expected to only spend $150.00 a week plus a little money for payroll taxes and overhead. Brutus was not a happy construction company owner.
Step #5 Complex Journal Entries
Brutus Was Surprised To learn that complex journal entries like entering a HUD-1 statements and complex Payment Applications similar to the G702 and G703 format was something else Susan knew absolutely nothing about.
Susan Refused to tolerate any more training from Randal because she decided those things Brutus wanted were not in her contractors bookkeeping services job description.
When A Contractors Bookkeeper refuses to do something related to the construction bookkeeping services and the accounting functions of the construction company it is usually a sign of bad bookkeeper traits.
Brutus would have saved a lot of time, money and heartache if he had simply paid attention.
After Several Rounds Of Losing Money On Progress Payments Brutus Outsourced the complex journal entries, HUD-1 Statements and complex payment applications to Fast Easy Accounting because the construction bookkeeping services work needed to be done right and on time.
Step #6 Prepare Tax Reports
Susan Had Filed the Payroll quarterly tax return at her previous job, never on time. She would eventually get around to doing them and when Brutus asked about them so became the "Drama Queen Nightmare" until Brutus finally left her alone to do them when she was good and ready.
Step #7 Key Performance Indicators
The KPI - Key Performance Indicators are simply five reports take five minutes and they give the construction company owner a snap shot of how the business is doing financially and taken seriously can lead to some serious cash flow coming into their business, and staying there.
They Are - Cash Available / Accounts Receivable / Accounts Payable / Profit And Loss / Balance Sheet For more detail click here.
Brutus Asked Susan - To prepare and print the Five Key Performance Indicators and have them on his desk every day by five PM.
As it turned out Susan had more important things to do with the time Brutus was paying her that involved Facebook, Pinterest and Twitter.
Whenever Brutus asked about them she would get upset and a bit angry then remind Brutus about some other pressing problem he needed to handle (see Bad Bookkeepers train their boss like an organ grinder trains a monkey). Her plan worked because after a while Brutus was trained to quit asking Susan any questions.
Step #7 B No Key Performance Indicators
Brutus Got A Disturbing Call from a friendly competitor who said he was going bankrupt and asked if Brutus wanted to buy his tools and equipment before the auction.
Brutus asked what happened and the fellow mumbled something about a bad bookkeeper took some money, unfiled and overdue taxes, material suppliers cut him off for not paying his bills, his employees quit because their payroll checks bounced and they took a bunch of tools and equipment to the pawn shop and the local, state and Federal tax agencies were auditing him for non-payment.
Step #8 The 5x5 Business Stabilizers
Brutus Remembered reading an article titled The General Contractor And The River Of Construction Commerce and there was something about the Five People On Your Board of Advisors and some other information that he could review because he certainly did not want his construction company going bankrupt!
Step #9 Good Bookkeeping Leads To Informed Decisions
Brutus Contacted Sharie discovered that we offer more than just Construction Bookkeeping Services and that we have an entire Business Process Management System (BPM) for construction companies like his and got his business on track.
Susan Found Employment with another construction company at lower hourly pay and more hours. She had to use her car to run errands, get coffee for the boss in addition to attempting to perform the duties of a contractors bookkeeping services specialist.
When nobody was watching she shopped and played games on the internet, updated her Facebook page and other social media sites, instant messaged her friends and talked with them for hours on her cell phone.
All is well that ends well and everybody went home happy!
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 Remove Contractor's Unique Paperwork Frustrations
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.
You Deserve To Be Wealthy, Because You Bring Value To Other People's Lives!
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 sharie@fasteasyaccounting.com
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.
Warm Regards,
Randal DeHart | Contractors Accountant