Feb 26, 2021
This Podcast Is Episode Number 408, And It's About The 4 Contractor Do-It-Yourself Bookkeeping Flaws Exposed
As a construction business owner,
you operate in a multi-faceted changing environment doing the
impossible with limited time, money, and resources on every
project, and soon as one is finished, another one is waiting for
you. You are highly skilled, intelligent, and adaptable.
You press a few keys on your keyboard thinking you are going to get
the results you want, accurate bank balances, a report showing who
owes you money and whom you owe money to, a Profit and Loss Report
and Balance Sheet Report you can understand and if all goes well
perhaps even some Job Costing Reports.
Instead, what you get is a hot steaming pile of fertilizer that
cannot even be used in the garden. Many contractors like you feel
like hiring a Professional Contractor Bookkeeping Service is a
waste of money when you should do it yourself. That is often what
leads good contractors like you into The Vicious Construction
Company Failure Cycle.
In the end, hiring QuickBooks Experts in Construction Accounting can prove to be not only beneficial but a safer option. After all, what makes a homeowner or businessperson call an expert contractor like you instead of D.I.Y. their construction project? You have the skills, expertise, and experience about how construction projects are done. You know how to bid jobs, collect money, coordinate labor, material, subcontractors, and other things needed to get work done, and in the end, you will have saved your customers and clients time, money, and frustration.
So, "what is the harm if I do provide my bookkeeping?" you may ask. Doing it yourself appears to be a cheaper and surer option, right? However, in the case of contractors' bookkeeping accounts, you may incur financially crippling fines, penalties, and interest if you miscalculate payroll, quarterly tax returns and don't invoice your customers and clients for all of the work you do, including Change Orders.
Here are seven reasons that underline why you may want to hire a Professional Contractor Bookkeeping Service and leave the accounting department to the construction accountants:
QuickBooks vs. QuickBooks Expert
A good construction accounting services firm will be able to make instant light out of the chaos in your QuickBooks. Besides, with proper Job Costing, Payroll, Tax, Job Deposit, W.I.P. and Cost of Goods Sold management accounts, you will be able to see if work is progressing according to your targets and where things are going sideways in time to fix it.
Payday vs. Employee Revolt
Payroll calculations are tedious, time-consuming and thanks to various local, state, and federal regulations, they are relatively complex to compute. You have to consider everything from time cards, workers compensation, unemployment, Federal withholding, social security, employee loans, child support, wage garnishments, certified payroll reports, sick pay, vacation pay, holiday pay – not to mention filing the entire group of local and state and federal payroll tax returns.
In this area alone, a Professional Contractor Bookkeeping Service is worth having because you will save time, aggravation and hopefully avoid fines, late fees, interest, and penalties.
Cloud-Based Vs. Desktop
If your QuickBooks is on someone's desktop or notebook and you don't have it set up as a "server," then it is likely only one person can be in it at a time. A Professional Contractor Bookkeeping Service keeps your QuickBooks Desktop In The Cloud where multiple users can access your QuickBooks Desktop™ through a PC, Mac, or Apple at the same time from different offices, cities, states, or countries, anywhere you have internet access.
Filing Tax Returns
Filing Tax Returns takes time and can be a misadventure for those who aren't aware of the local, state, and federal regulations. If you find yourself in an audit situation, it is in your best interest to have an accountant doing the math rather than playing the rookie apprentice.
Final thoughts
Doing The Books For Contractors, Subcontractors, Trade Contractors, Handyman, And Other Related Contractors
Regular bookkeeping is relatively easy; however, contractor bookkeeping is entirely different. Routine bookkeeping is like taking a casual walk on the beach on a sunny afternoon with clear skies vs. construction accounting, which is more like slogging through a hot steamy jungle, during a heavy rainstorm, at dusk with hidden quicksand traps, steep mountain passes, raging rivers, razor-sharp rocks, deep dark holes in the pathways and giant insects buzzing around you and biting you everywhere from head to toe.
Doing The Books For Spec Home Builders And Commercial Tenant Improvement Contractors
Doing construction accounting for speculative builders or commercial tenant improvement contractors who need W.I.P. reports, Schedule of Values, Payment Applications, multiple job deposits, bank draws and earned value reporting, and a whole lot more is when things get terrible!
The D.I.Y. approach is one of the traps every contractor struggling financially falls into because, as contractors, we don't believe in asking for help until we are in deep trouble. We find it hard to trust experts because they cost too much and do not understand how construction works.
If you plan on going ahead with this route after reading this, I recommend our Fast Easy Accounting store to help you get started with doing the bookkeeping yourself. Otherwise, reach out and let me know how I can help.
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 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 sharie@fasteasyaccounting.com