0409: The Answer To Your Construction Bookkeeping Chaos

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By Randal DeHart and Randal DeHart | Construction Accountant |PMP | QPA. Discovered by Player FM and our community — copyright is owned by the publisher, not Player FM, and audio is streamed directly from their servers. Hit the Subscribe button to track updates in Player FM, or paste the feed URL into other podcast apps.
This Podcast Is Episode Number 409, And It's About The Answer To Your Construction Bookkeeping Chaos

Making decisions never ends for contractors like you. Being adaptable is one of the basics of good decision-making skills.

Think of decision-making as being in a bumper car. You are continually driving and trying to avoid the other bumper cars. Suppose you hit one you back up and go again (reminder this is the only safe place to hit other vehicles). The rest of the time, life as a contractor feels more like the Indy 500. You are driving as fast as you can, passing other cars, making pit stops, and scrambling to make it to the finish line.

Translate this to a typical daily life of a construction contractor:

  • The paperwork, processes, and decision-making are never-ending.
  • The concept of time is all about 10 minutes
  • Your coffee brews in less than 10 minutes
  • Take a shower in less than 10 minutes
  • Load the dishwasher in 10 minutes
  • Take out the trash in less than 5 minutes
  • Read your email in less than 5 minutes
  • Decide what bills to pay in less than 5 minutes

Are your employees' work based on "Time Served" rather than "Results Achieved"?

A time to start and a time to stop. Now, do your expectations for those same employees to work faster (Indy 500)? Do you expect the job to be done efficiently, thoroughly, and beautifully (better quality than the homeowner can do themselves)?

How many jobs are completed where the final punch list takes longer than the actual job?

The common practice with employees - get the job done Fast (beating their last time). There is done and not done. I can think of several examples. Is there trash left all over the job? Is the living space dirty and needs to be professionally cleaned for the client? Is there a zillion things the homeowner needs to do before they can reclaim their space?

The job is not done until the final punch list is completed, the customer has paid, the check has cleared the bank.

There are a zillion steps from the initial call to meeting the potential customer, creating an estimate, doing the work, collecting the money, and paying the bills. I repeat and cannot say it too often, for Construction Contractors like you, the paperwork, processes, and decision-making are never-ending.

Contractors' most common question: I saved all my paperwork, now what do I do with it?

Who will call my suppliers, create tax forms, pay all my bills and taxes? Will you do everything? I just want to do the work. You say you want all of your employees to enter into QuickBooks their receipts, invoice customers; it is a wasted step for me, as the owner, to handle all of the paperwork all over again.

You are the Contractor (THE OWNER). I want to point out that your employees are just that employees.

It makes sense for them to track their jobs (talking about the Project Managers, Construction Supervisors, Lead Staff) using Project Management Software, not QuickBooks. Keep It Simple: Start with an Electronic Timecard.

We recommend T-sheets. T-sheets are affordable and work on all Smart Phone brands, with support for old-fashioned flip phones. Fantastic about helping you and your staff use the product.

Reports can be pulled by date range, by staff, by the project. It works for both field and office staff. Of course, the GPS features - not practical for office staff but very practical for your field workers. Are your employees where you expect them to be?

Who is in your QuickBooks?

Experience has found that "Too Many Cooks In The Kitchen Ruin The Meal" and too many people in QuickBooks leads to a financial disaster and, more often than not, meltdown and bankruptcy business and personal. Does everyone need to be in the Accounting System?

Having all your staff know more about your numbers can cause many "White Noise" in their heads. Common Employee thoughts are "Employees are doing all the work, and the Construction Owner is making all the money and doing nothing!" Sound familiar? It will if you have been in business for more than a few years! Employees never think about that stack of invoices for supplier slips, insurance, taxes (that's all just stuff that doesn't count).

About The Accounting. We recommend all Construction Contractors use the Desktop Version of QuickBooks. It's very robust and customizable. No, not every 3rd Party App. will work with QuickBooks.

Yes, in addition to QuickBooks Desktop Software, we use 3rd Party Software to help you. Both in the amount of paperwork you need to send us and keeping your costs affordable.

Many Construction Contractors find us through blogs, podcasts, and their existing office staff who have read our blogs about Bad Bookkeeper. My suggestion to you is if your team is enraged about what has been written – maybe it is time to review their work closely.

We help with QuickBooks Setup, Cleanup, Ongoing Bookkeeping.

We provide Cloud Access Consulting and Training. We always recommend QuickBooks Desktop as the starting point for all Construction Contractors, large, small, new in business, returning contractors. We are here to help you.

The 80-20 Rule combined with Business Process Management can improve your life in ways you never dreamed possible.

  • 20% Of The Construction Companies - Share the Top 80% of the profits which the owners and shareholders use to support lavish lifestyles because they know what to do, when to do it, and how to do it!
  • 80% Of The Construction Companies - Share the Bottom 20% of the profits which the owners and shareholders use to support just above or just below average lifestyles because they don't know what to do, when to do it or how to do it!

Final thoughts

The answer lies in your thinking patterns and habits.

Randalism:

Success is a few simple disciplines practiced every day.

Failure is a few errors in judgment repeated every day.

For Contractors who are happy doing the bookkeeping, we offer custom-built QuickBooks Setups, Chart of Accounts and Cost Codes, and other related products on our store—making site improvements daily. Products are sectioned into (3) areas: United States, Canada, International.

Construction Contractors want their Accounting to be on a Merry-Go-Round instead of some of the more exciting rides at the county fair. Life is in constant change. Everyone has a Wish List – I want to be on yours when you are ready.

I love to chat with everyone. Call today, tomorrow, next week.

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

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