he construction industry is dynamic and challenging, and a
business's success or failure can hinge on various factors. As we
approach the end of another year, it's essential to take a step
back and assess your company's successes and
challenges.
Contracting is notorious for its complexities and
ever-changing landscape. It is crucial to evaluate what worked
well, what didn't, and what lessons we can carry into the following
year. These are my key takeaways from phone chats and emails with
our clients, industry friends, and followers. Use this as a
template - remove, add, and reflect on this list to hold yourself
accountable for what you can improve.
What Went
Right
1. Embracing
Technology
Your commitment to technology was one of the most significant
positive shifts this year. Implementing various project management
software has streamlined your processes and improved team
communication. This investment increased efficiency and enhanced
collaboration, allowing you to meet deadlines consistently.
2. Strong Client
Relationships
Focusing on building strong relationships with your clients
pays off tremendously. Most of you have secured several repeat
contracts by maintaining open lines of communication and
prioritizing customer service. Satisfied clients shared positive
reviews, which helped you to attract new business through
referrals. This year, we learned that transparency and trust are
invaluable in fostering long-term partnerships.
3. Financial Management
Improvements
We made a conscious effort to improve your financial planning
and management. Developing a more robust budgeting system and
closely monitoring cash flow allowed you to navigate unpredictable
economic fluctuations more effectively. This proactive approach has
prepared you to make better-informed decisions moving
forward.
4. Commitment to
Sustainability
As clients increasingly value sustainability, you have
embraced eco-friendly construction practices. By incorporating
green building methods and materials into your projects, you have
met client demands and differentiated yourself from
competitors.
5. Continuous Learning
and Training
We are proud of our Construction Accounting Academy students
and the contractors who took their certifications and licenses.
Encouraging ongoing employee education and training ensures that
you and your team remain adaptable and knowledgeable about industry
trends and practices. A skilled workforce is pivotal to delivering
high-quality work.
What (Mostly) Went
Wrong
1. Labor
Shortages
Despite the successes, there are significant setbacks due to
the ongoing skilled labor shortage in the construction industry.
Attracting and retaining talented tradespeople proved challenging,
leading to project delays and impacting quality. This highlighted
the need for better recruitment strategies and a stronger focus on
employee retention.
2. Inadequate Project
Planning
Project planning sometimes fell short, leading to cost
overruns and missed deadlines. Although you made strides in overall
project management, you learned the hard way that comprehensive
planning, including risk assessments and resource allocation, is
vital for successful project execution.
3. Neglecting Marketing
Efforts
While most excelled in many areas, some of your marketing
strategies took a backseat this year. You missed potential project
opportunities without an effective online presence and outreach
efforts. This experience underscored the importance of prioritizing
marketing and business development in a competitive
landscape.
4. Safety Compliance
Issues
Although you have generally maintained a safe work
environment, you've encountered a few instances of oversight
regarding safety regulations. These moments served as crucial
reminders of the importance of strict compliance. It is necessary
to review safety training protocols to prevent any future
incidents.
5.
Bookkeeping
Neglecting bookkeeping in your construction business can lead
to significant challenges that may hinder your overall success.
Accurate financial management is crucial in this industry, and
overlooking bookkeeping tasks can have far-reaching consequences.
Particularly with your cash flow -inconsistent tracking of income
and expenses can result in shortages and tax issues - paying
penalties or fines that could even attract attention from tax
authorities due to discrepancies.
Poor practices can also lead to disputes over unpaid invoices
or discrepancies with subcontractors and suppliers, damaging
relationships crucial to your business.
As construction bookkeepers and accounting specialists, our
contributions extend beyond simply recording transactions. By
implementing efficient bookkeeping practices, we play a crucial
role in shaping your construction business's financial stability
and growth. Regular reviews and updates of financial practices can
help your company adapt to challenges, seize opportunities, and
ultimately thrive in the competitive construction
landscape.
Moving
Forward
Reflecting on the year provides valuable insights into your
strengths and weaknesses. You can enhance your operations by
building on your successes—embracing technology and fostering
strong client relationships. Simultaneously, addressing the areas
where you fell short, such as improving labor recruitment and
ensuring relentless project planning and bookkeeping, will be
critical in your growth strategy for the coming year.
As we look forward to the new year, let's harness the lessons
learned and strive for continuous improvement. The construction
industry poses challenges, but with a proactive mindset and
determination, we can navigate its complexities and position our
business for more tremendous success in 2025. Here's to building a
brighter future together!
IMPORTANT NOTICE:
Recent changes to the
Beneficial Ownership
Information reporting requirements may affect your
organization. Please thoroughly review these updates to comply with the latest regulations. Also,
please pay attention to any deadlines and necessary documentation
to maintain compliance.
Starting January 1, 2024,
many U.S. businesses must report information about their beneficial
owners, i.e., those who own or control the company. Businesses must
report Beneficial Ownership Information (BOI) to the Financial
Crimes Enforcement Network (FinCEN), a U.S. Department of the
Treasury bureau. The reporting, a requirement of the Corporate
Transparency Act (CTA), aims to combat financial crime and
corruption and must be completed by January 1, 2025.
Key points about the
update:
Who needs to
report:
Any company formed or
registered in the United States, including:
- Corporations
- Limited Liability Companies (LLCs)
- Limited Partnerships
- Certain trusts
What information
needs to be reported:
This includes the legal name,
date of birth, and address of each beneficial owner, as well as
identifying information like a passport or driver's license
number.
Filing deadline for
existing businesses:
Companies formed before
January 1, 2024, must file their beneficial ownership information
by January 1, 2025.
Filing deadline for
new businesses:
Companies formed in 2024 must
file within 90 days of formation.
Where to
file:
Beneficial ownership
information must be submitted electronically through
FinCEN's BOI E-Filing
website.
Potential consequences of
non-compliance: Businesses that fail to comply with the beneficial
ownership reporting requirements may face significant civil
penalties and possible criminal charges.
Please go directly to
the FinCEN
website for more
information and answers to Frequently Asked
Questions.
Keeping your records current
is crucial for adhering to these new requirements. If you have any
questions or need further clarification, please contact a legal
expert specializing in compliance. We do not offer this service,
but please feel free to contact me anytime when you need help with
your construction bookkeeping, accounting, and business in
general.
Disclaimer: This notice is for informational purposes only and does not
constitute legal advice. For specific guidance, please consult with
an attorney familiar with the CTA and its regulations.
About The
Author:
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 managing 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 sharie@fasteasyaccounting.com
