Jul 9, 2021
This Podcast Is Episode Number 427, And
It's About Consequences Of Avoiding Your Construction
If you ask 100 business owners what they like least about
running a business, the chances are good that bookkeeping will rank
high on the list. It's an annoying and frustrating chore that takes
up much time and is easy to put off until tomorrow.
Moreover, Construction Companies have unique bookkeeping needs.
Some bookkeepers and bookkeeping systems may cost you more than
they are worth in salary, fees, and loss profits because you cannot
get QuickBooks reports and financial reports when you need them.
Chances are, you are suffering from bookkeeping pain, and your
bookkeeper or accountant is overwhelmed trying to figure out how to
do construction accounting.
Good bookkeeping leads to informed decisions. Avoiding your
bookkeeping is dangerous, however. For example, not knowing your
construction company's financial situation can result in a series
of missteps that could ultimately cost you your business.
Here are three consequences of not keeping up with your
1. You'll make
You can only make informed decisions about your construction
business when you have a complete picture of your current financial
situation, including how much money is in your accounts, what your
cash flow forecast predicts, and how much money you owe. Without
that information, it's much more challenging to know when you can
afford to spend money or when you need to hold back.
Without proper bookkeeping, your decisions will be based on
how you think things are going, which isn't always accurate. For
example, you may have just finished a good month and decide it's
time to hire new employees only to find out you don't have enough
money in the bank to pay them. Waiting three months to hire
employees might be more profitable for you in the long run, but you
won't know that because your books aren't up-to-date.
Maintaining your books ensures you have your company's entire
financial picture available to make intelligent
2. You'll make
Your employees, subcontractors, and lenders all rely on you to
make your payments on time, every time. In addition, payroll itself
requires considerable attention to ensure your employees receive
their benefits adequately.
Not keeping track of your financial books can result in
expensive errors being made, including benefits being missed, bills
not being paid on time, or over or under-payments. This could cost
you extra in fees for late-payments or rushed payments, which also
affects your books.
On top of all this, financial mistakes can lead to a lack of
trust. You need a trusting relationship with your employees,
contractors, and lenders. Unfortunately, payment errors can erode
that relationship quickly.
3. You'll lose
In addition to losing money in unnecessary late fees and
payment charges, not keeping track of your books can result in lost
money that your business desperately needs.
You won't know which of your clients or customers aren't
paying you on time, which means you can't follow up with them or
add interest charges for their late payments.
You could be paying too much in expenses, and if you don't
reconcile your books, you'll have no idea that money is being
wasted. Perhaps you purchased a software program to enhance
productivity in the early days of your construction business. Maybe
you stopped using it but forgot to cancel it, so each month for the
past few years, you've been paying for a service you don't
Those payments add up and affect your overall financial
Bookkeeping might be many
entrepreneurs' least enjoyable task, but it's an important one. So
if you find yourself putting off bookkeeping or dreading doing it,
it's a good idea to look
into hiring someone to do it for you.
Construction bookkeepers are
trained and knowledgeable in the process, and they can save you
valuable time and money in the long run. Otherwise, be prepared to
set aside time regularly to do your books yourself and not let
yourself put the task off. It's too critical to the future of your
Want to get your books in
order without adding more work to your plate? Get in touch with us
today. Fill out the form on the right or here. You can
also reach out to me through phone or email. Your privacy is
important; I answer my own phone (drops into voicemail if I'm busy
or after business hours).
You can still use promo
code: 30FEA for a 30% discount (until July 11,
2021) upon checkout
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. Call
1-800-361-1770 or email@example.com