Contractor Success Map with Randal DeHart | Contractor Bookkeeping And Accounting Services

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Randal DeHart | Construction Accountant |PMP | QPA


    • Nov 26, 2021 LATEST EPISODE
    • weekly NEW EPISODES
    • 17m AVG DURATION
    • 447 EPISODES


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    Latest episodes from Contractor Success Map with Randal DeHart | Contractor Bookkeeping And Accounting Services

    447: Why Getting The Leads And Doing The Work Are Still Not Good Enough

    Play Episode Listen Later Nov 26, 2021 12:07

    This Podcast Is Episode Number 447, And It's About Why Getting The Leads And Doing The Work Are Still Not Good Enough There was a time when a contractor put a simple ad in the paper or a line listing in the Yellow Pages, and they would have more leads than they could handle. It was the only way to go, and the contractors who insist on that and "Word of Mouth" do not survive.   Could those contractors have avoided failure?   I believe they could have. This article explores the top reasons construction businesses fail and the three key questions that every contractor like you needs to ask to prevent failure. It would be best to answer these questions to provide a clear path to your continued and future growth and success.    Contractors who did not move from simple ads that had always worked, and evolved a Marketing Plan made the same mistake other failed companies and brands made. They were unable to Innovate, Reinvent, and Evolve by having a deep understanding of what business they were in, who and what they were competing with, and by challenging themselves to understand their actual expertise.   It's important to plan to give your construction business the best chances for success. Planning means anticipating challenges and developing ways to successfully address them, so they don't upend your construction company.  Here are the top reasons why your construction company could still fail: Lack of market demand  You need to have a market to make money. That means there needs to be enough people who need your service and are willing to pay money to hire you. Without that, you won't be able to cover your costs or earn enough to survive. Before you spend your time, money, and energy starting a business, make sure there's a need for it.  Some ways you can identify needs: Look for competition. If no one else is offering the service, there's a chance there's no market for it. That might not initially stop you from moving forward, but if no one already offers your product or service—or anything close to it—you'll have to do more to prove there's a market. Conduct market research. Studies and interviews help determine whether people in your target market agree with you that there is a need for your offering and that they would pay for it.  Lack of expertise Contractors like you might be tempted to partner with or hire their friends or family—people they genuinely like and would work well with. That doesn't always translate to success, however. For your business to be successful, you need specific expertise, and you need people whose skills complement yours.  You also need people who are willing to discuss your decisions with you and make sure there's a business case to be made for each decision you make. Someone with a differing perspective provides a vital way to double-check whether your choices are best in the long-term for your business or whether other options are available.  Ensure you hire people with balanced competencies. If your roofing business involves installing solar panels, you might need a technical expert to ensure the technology runs smoothly. You'll likely also need a financial expert to help you with bookkeeping and possibly a manager to oversee employees. It's OK to hire people you like, but make sure your team also has the skills to attend your business successfully.  Lack of finances You need money to produce your services and ensure all employees are paid. It's not enough to know how much money you need month-to-month; you need to forecast your development cycle, how inventory moves through your supply chain and variations in seasonal income.  If your construction business doesn't earn as much in the first few months as you predicted, you'll need to bring in more money quickly to save your business.  Ask Yourself: What are you offering? New construction, remodeling, or service and repair? Who is your competition? DIY, other contractors, money homeowners for a construction project? What is your real competency? Residential, Commercial, or both? The Truth Is Four Levels Deep! Challenging yourself is the key to answering these questions. Write your answers on paper or computer, sleep on them and then revisit them again and again until you get to the truth. Getting The Leads And Doing The Work Is Only Part Of The Answer Not answering them and acting on the knowledge is one reason why so many construction companies shrivel and die. They focus on the wrong areas to innovate or improve. They focus on the wrong enemy and threat. As a result, they miss what they could be doing to succeed and prosper over time. Define The Type Of Contracting You Offer And Who Is Your Competition It may not be the same form, structure, and category that you operate. For example, Home Depot does not see itself competing in the building supply business but for a share of the home and commercial remodel and repair market. Be that homeowner doing a weekend project, Handyman Contractors, Remodel Contractor, Trade Contractor, and other contractors and House Builders. This approach and behavior across the organization, too, saw themselves as fighting for a share of the building supply market. Final thoughts It is straightforward to get caught up in the short term and what you have today. You measure your share in the particular segment you operate in and obsess about your immediate competition just as contractors who did not market effectively did years ago. But you need to step back and ask yourself the three key questions and make sure you answer them in a way that will define and liberate your construction company at the same time. Also, keep in mind that you can significantly improve your odds of success by planning, being strategic with who you hire, ensuring there's a market for your offerings, and considering alternative funding sources.  P.S. Here's a Promo Code that you can use in both our Fast Easy Accounting Store and Construction Accounting Academy for a 40% Discount: FASTEASY40 You can use it today, November 26, 2021, to next Friday, December 3, 2021, at 11:59 PM. (Please note: Offer does not apply to Outsourced Accounting, Bookkeeping Review, or any Consultation and Training products; you can use it, however, to purchase any course or monthly subscription classes in Construction Accounting Academy). 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

    446: Practical Tips For Encouraging Repeat High-Profit Clients

    Play Episode Listen Later Nov 19, 2021 8:49

    This Podcast Is Episode Number 446, And It's About Practical Tips For Encouraging Repeat High-Profit Clients Many data support the idea that it's less costly, easier, and more efficient to encourage repeat customers than bring in new ones. Among the stats Hubspot lists are: that a 5% increase in customer retention is responsible for more than 25% increase in profit; repeat customers are nine times more likely to convert than first-time visitors, and a 2% increase in customer retention has a similar impact to your bottom line as reducing costs by 10%. Understand The High-Profit Client - Most of them have personality traits commonly known as drivers - folks who are accustomed to getting things done quickly and efficiently. They do not mind paying professionals to service, repair, or build new construction projects related to their houses and commercial buildings. Design and develop your internal customized systems and processes when and where it makes sense. As much as possible, when it is cheaper to buy something ready-made for a fraction of what it costs you to do-it-yourself then buy it.  Systems, Systems, Systems - You need systems (a system is simply a collection of processes built upon an understanding of what works and each method has been tried and tested). Without systems or a desire to "wing it" and see what happens will bring out the animal in these people, and they have been known to cause construction business a great deal of harm and financial pain. First, Design External Systems For the money trail (contract amount, deposits, change orders, payments) For project milestones and projected completion dates (when change orders occur, update the completion date) Cause the least amount of grief and interruptions to their lives Ensure they make the fewest possible decisions (they make decisions all day long) To make sure nobody ever tries to "educate" them about construction (they don't care, that's why they hired you!) Then, follow along these four practical tips to encourage your high-profit clients to keep coming back.  1. Build relationships with clients Take time to learn more about your customers. Do they mention family members? Ask about their loved ones. Do they have particular concerns? For instance - too many cable cords around the house and they have small children. Keep track of their issues and be attentive to their needs. Recommend solutions that address their specific problems. Go the extra mile to show your customers they're important to you.  Ask for their input, as well. They'll get to know your products and services and offer insights into what's working and what could be improved. If you engage them--and make changes based on their feedback--you'll develop a loyal customer base. The more special your clients feel, the more likely they are to hire you again. They'll appreciate your thoughtfulness and value your service.  2. Make it personal Your loyal clients deserve communications that are more personal and less formal. Using impersonal emails for your more extensive email list is fine, but use more personal touches with your best customers.  Phone them or suggest an in-person meeting if you want to let them know about an essential business-related matter. Keep track of important dates, as well. You can send gifts or cards to mark important occasions or to reach out.  Make your best customers feel they stand out from the rest by being more personal with them.  3. Share relevant information Still, if you get to know your customers well, you can pass along articles, books, or other information that might interest them, even if it isn't related to your business. Newsletters are a great way to stay in touch with your customers and let them know what you're up to. It shows them you understand and you care.  4. Remember your loyal clients Businesses sometimes focus their attentions exclusively on new customers, forgetting about loyal and repeat customers. You need new customers to keep your business thriving; however, excluding long-term customers creates customer churn.  It's great to offer new customers rewards and incentives, but that leaves existing customers feeling ignored. Offer your long-term customers bonuses for their loyalty.  Final thoughts The Key Here Is To Get In And Get Out Fast - And they will love you for it! The high-profit client has more money than time, so more than most people; their time is worth a lot more to them than you can imagine. Encouraging repeat customers makes solid business sense. To be successful, you need a balance of new and long-term clients. This means building relationships with people, personalizing your attention, sharing relevant information, and remembering your loyal customers.  A great product or service at a reasonable price might bring your customers in, but outstanding customer service that gives them a positive, memorable experience will keep them coming back.  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

    445: How To Get Your Life Back In A Seven-Day-A-Week Construction Business

    Play Episode Listen Later Nov 12, 2021 7:25

    This Podcast Is Episode Number 445, And It's About How To Get Your Life Back In A Seven-Day-A-Week Construction Business Construction business owners already have a time-consuming and challenging job running their business. If their business is open five days a week, they usually need the weekend to catch up on paperwork, pay bills and manage any tasks they didn't get to during the week.    For those with a seven-day-a-week business, there's even less time off. They often feel the need to be onsite whenever the company is open to deal with unanticipated issues, help the staff out, and ensure all tasks are completed.    Being onsite seven days a week isn't healthy or productive, however. It can cause burnout and result in errors being made. It affects the construction owner's personal life and quality of life, not to mention their overall well-being.    Here are three tips for getting your life back when you operate a seven-day-a-week business.  1. Hire a trusted manager The next best thing to having you onsite all the time is to have a manager with authority similar to yours who can be onsite when you aren't. Invest money in hiring a manager to deal with operations so you can take days off. Train that person to deal with any issues you anticipate and make sure they know and understand the business inside and out. Give them the authority to make decisions in your absence. It might take a little time to build up trust with that manager, but they will be invaluable to you when you have them.   2. Delegate tasks you don't need to do As a small business owner, you have regular duties that need to be done but could be better done by an expert. Doing them yourself takes up a ton of your time and forces you to be on the job site more. Look at your tasks and determine which ones are eating up your valuable time. Could you hire a bookkeeper? An accountant?  Virtual assistants can now be hired to deal with invoicing, collecting payments, and making phone calls on your behalf. That frees you up to deal with other tasks at your job site, which means you may get your other duties done and find you have free time.  These outside service providers cost money, but they are worth the expense when you consider the time and energy you'll save by not taking on those tedious tasks. Especially when you factor in the extra personal time, you'll have. 3. Start slowly The worst thing you can do is wait until you feel you're about to have a nervous breakdown before you think about taking days off. That increases the chances that you'll need a day off at precisely the wrong time—during the busy season or when there's a work-related crisis emerging.  To get yourself comfortable with taking days off and get staff used to you being away: Start slowly. Maybe take an afternoon off during the weekday; that's typically the slowest. When you're comfortable with that, start taking an entire day off here and there. After a while, you'll be fine taking two days off, even during busier periods. You may not always have a five-day-a-week job, but at least you'll be okay taking days off for yourself.  Final thoughts As contractors, you wear too many hats that you end up wearing yourself out from the weight of it all or from the time it takes for you to wear all of it. You don't have enough energy nor time. It would be best if you had time away from your business to maintain your sanity and stop yourself from burning out. Having trusted staff and expert service providers in place will help you take a break from your worksite and get yourself some personal time.  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  

    444: Job Costing - Your Construction Company's Competitive Advantage

    Play Episode Listen Later Nov 5, 2021 12:14

    This Podcast Is Episode Number 444, And It's About Job Costing - Your Construction Company's Competitive Advantage Every contractor has a Job Costing Library; some keep it in their head, some keep it on paper with names like completed jobs, bids, estimates. Other contractors keep it in their QuickBooks For Contractors' software records. Still, other contractors rely on places like RS Means for comprehensive databases of construction costs. These are similar to the "Flat Rate Books" used by car repair shops for decades.   A tiny fraction of contractors understand the actual value of a customized cost library and invest the time, energy, and resources to build and maintain one. Having done several, I can tell you it is a painful, arduous task. I will tell you a story to make it crystal clear.   The Treasure Box That Saved Four Contractor's Lives! In the mid-1800s, an archeologist left New York City on a journey into the heart of the African jungle in search of a lost civilization. He intended to find and bring back treasures that would make him a wealthy man. He recruited four physically fit and very intelligent contractors, one each from The Four Types Of Contractors, to assist him with the promise they would be paid a substantial reward when they returned the treasure box to his office in New York City. All went well for the first two weeks, and as luck would have it, they stumbled upon the lost civilization resting undisturbed under a soft blanket of floral and vines. The archeologist and the contractors worked feverishly to find the treasure without success during the next two weeks. Late one afternoon, the archeologist was bitten by a poisonous snake, and before long, he began to get dizzy. He knew he had less than twenty-four hours to live, so he decided to spend his remaining time putting a plan in place to save the lives of the contractors he had brought on the journey. While the contractors slept, he filled the Treasure Box and sealed it with a large, heavy padlock. When the contractors awoke the following day, he described in great detail how he had found not what he came for but something much more valuable, more valuable in fact than gold and jewels. Everyone was very excited until he told why he would not make it out of the jungle alive. This news caused a great deal of sadness because everyone knew the archeologist was the one person who could keep peace and harmony when tempers flared and made sure everyone stayed focused and kept on track. The archeologist struck a bargain with the contractors to be rewarded handsomely if they worked together and delivered the Treasure Box to his office in New York City. He gave them a letter written in Latin to be delivered to his partner along with the Treasure Box with instructions regarding the contents of the Treasure Box. The archeologist made it clear the Treasure Box had to remain sealed until it was delivered, or else they would receive nothing. Now getting four contractors to agree on anything is a miracle in itself, let alone work together. They were fortunate the Treasure Box was so heavy it required all four of them to work together to move it. They fought their way through the jungle for three long terrible weeks, finally arriving at the archeologist's office in New York City and presenting it to his partner with the Treasure Box and the letter. The partner read the letter and smiled knowingly before opening the Treasure Box. It was filled with rocks. The contractors were very angry and upset. When they calmed down, the partner translated the archeologist's letter for them, and it said: "By Making You Work Together, I Saved Your Lives Which Is Worth More Than Gold Or Jewels" Your Treasure Box is your construction company's job costing library.  Building it is like taking that long, challenging journey out of the jungle, which is why so few contractors ever do it even though the results are more valuable than a Treasure Box full of gold and jewels; because a job costing library can turn a regular construction company into a perpetual money machine. "If You Know The Answers The Questions Will Not Bother You" - Randalism Knowing in advance which jobs have the highest probability of success and profit before getting involved moves your construction company from an unpredictable roller coaster to a peaceful merry-go-round. The key to a helpful bid is accurate job costs. Your estimator needs to access the past job histories to calculate the construction costs accurately. Contractors with annual sales volume under $5,000,000 are not likely to have a $100,000+ a year professional estimator on staff, so do not expect them to be 100% accurate.  The key is to get the final job costs as close as possible to the project estimate and budget. The only differences between your bid and the finished project should be overhead and profit. Job Costing Process Minimum Requirements: Time cards that have spaces for job name and cost codes - Free Timecard Templates Have your bookkeeper provide labor burden rate - Labor Burden Explained Heavy equipment job allocation rates Job costing and job profitability reports Job Costing Library Minimum Requirements: Construction bookkeeping services system with QuickBooks setup correctly allocates transactions into direct construction costs, indirect construction costs, overhead, and other costs. Job costing reporting system based on one of these four foundations: account-based, item-based, schedule of values-based, or work-in-progress based (W.I.P.). It will depend on your particular construction company and what markets you serve. Professional construction bookkeepers and accountants maintain the construction bookkeeping system, and I don't mean the secretary who does everything, including the bookkeeping. The people are responsible for purchasing labor, material, other costs, and subcontractors to code every receipt with the correct job name and cost code. The Fast Easy Way Outsource The Hard Part And Keep The Easy Part We have #1, #2, and #3 in place already, and all you have to do is #4, and we have processes to train you and your staff. QuickBooks For Contractors desktop version is available 24/7 on a secure cloud-based server if you want to interact with it and monitor the data entry and additional reports in real-time. You don't need to open your QuickBooks for Contractors file if you prefer not because either way, we will automatically generate your Job Costing and Job Profitability reports and send them to you on whatever schedule suits you best. Our construction accountants can review the Job Costing and Job Profitability reports with you and answer all of your questions. Final thoughts Job Costing is much work, but the results are worth it. You can save money in the short run by doing it yourself, hiring someone to work in your office, enrolling in our online class, or you can spend a bit more money and outsource it to a company like ours, which specializes in Contractors Bookkeeping Services; the choice is yours. Just be forewarned to set up QuickBooks for your construction company, do the data entry, payroll, quarterly taxes, construction accounting, and Job Costing, and do it right will require a substantial skill. 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    

    443: Succession Planning: A Will For Your Construction Company

    Play Episode Listen Later Oct 29, 2021 8:54

    This Podcast Is Episode Number 443, And It's About Succession Planning A Will For Your Construction Company You may be getting your construction projects done with sheer willpower, but the lack of processes, business plans, and strategy will eventually wear you down. You can either keep on "Powering Through"- spend your life endlessly chasing details, missing appointments, suffer untold losses in cash flow and profits, or you can start developing a plan and work on your business.   Successful contractors improve processes all year long. Your construction company can benefit from an excellent system that other successful contractors are using now, which means there is no need to "Reinvent The Wheel." As your construction company grows and evolves, your processes can support the controlled and planned expansion.   Along with trying to keep on top of your construction business, the unfortunate reality is that most business owners don't take proper holidays. Usually, this is because their business relies on them, and they don't have the support to keep the business running without them.   As a construction business owner, have you ever considered what would happen to the business if you had to take a six months break because of a severe illness or injury? Would the business survive? How would the bills get paid? And while it might not be nice to think about, if you were to die, are you sure your business partners would give your loved ones a fair deal? For these reasons and many more, all business owners need to have a detailed succession plan. A succession plan is like a will, but for a business. However, there is often a more comprehensive range of scenarios and options to consider. Just like your will, a good business succession plan can vary from one business to the next. But some key areas should always be considered, which you can find below.  Business Structure In the event of death or retirement, the ownership and control of the business may need to be transferred to the owner's family or the surviving business partners. How easily this occurs will often depend on how the business operates, such as through a trust, or a company, or without a separate entity at all. Succession Agreements If something happened to one of the business partners, would their spouse or children take over the control of that share of the business? If the answer is no, then a succession agreement can assist the other business partners to continue business operations while allowing for compensation for the former partner's family. Managing Risk Just like personal insurance, business insurance can provide a range of protection, such as temporarily meeting the standard costs of running the business (business expenses cover) or paying for a short-term replacement manager (e.g., trauma or disability cover). A life insurance policy linked to the succession agreement that provides the deceased partner's family with suitable compensation for the transfer of business ownership to the surviving partners may also be a good idea. Power of Attorney Most small businesses struggle to do much without the advice and authority of the figurehead or main key decision-maker. That's why a Power of Attorney is integral to a good succession planning process. It helps the business to physically operate if the owner is incapacitated because of illness or injury. A range of people may need to set up a succession plan, including a financial adviser, lawyer, and accountant. We can help you find the right team for you. Even if you already have a plan in place, it is crucial to review agreements and insurance policies to keep them up to date and reflect the business's current value. Need a succession plan? The last thing I leave you is "Knowledge is Power." There are simple answers to all complex problems, and they are usually wrong. Invest the time, money, and effort to do it right the first time. With the appropriate tools and processes, you can have the insights you need to manage and grow your construction company effectively and efficiently, even without you running it. You can sit back and relax while you monitor and manage the work-in-process you already laid out. You have what it takes to be successful, and you deserve to be wealthy because contractors add value to other people's lives.  Chat to us to get started. We're here to help you run a successful construction business and protect your assets, now and in the future. 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

    442: Set And Manage Remodeling Client Expectations Without Hiring More People

    Play Episode Listen Later Oct 22, 2021 8:04

    This Podcast Is Episode Number 442, And It's About Four Things To Consider Before Expanding Your Service Offerings Balancing customer experience and setting client expectations against your time and budget is a difficult task. It would be best if you had excellent planning, efficient project managing, and perhaps the right amount of staff working to keep customers happy, but not so many people that workers are standing around looking for things to do.    If your customers have long wait times, that's good news for you initially—it means your business is popular. The bad news is that homeowners won't wait around forever for you to fix your time management issues. If they like your services, they'll be a bit forgiving, but too many long waits will send them to your competition.   For instance, when a homeowner decides to remodel their living space, they dream about how it will look and feel when it is done, but they have no idea what an emotional roller coaster is in store.    Surprises were great when you were a child because you were conditioned to believe that surprises meant you would get something good! As adults, you have been conditioned that surprises are not always pleasant. Highly profitable remodel contractors understand this and have processes in place to deal with it. Fear on both sides Contractors without financial reporting systems they can trust to generate accurate Key Performance Indicators and Reliable Job Cost Reports do not know if they are making or losing money from day to day, which leads to doubt, which leads to stress, and the result is they tend to work faster and harder. Their frantic behavior raises everyone's stress level. Contractors in this situation tend to feel like they are driving down the freeway at midnight, wearing a blindfold hoping for the best, and fearing the worst. A Comprehensive Bookkeeping and financial reporting system can reduce or remove the feeling of being out of control. A Simple Easy To Understand - Remodel Invoicing System to keep track of the following: Original Contract Price Change Orders Job Deposits Advance Payments Each Progress Payment Running Balances Showing What Is Done Running Balance For What Is Still Unbilled Percentage Of Completion On Each Major Section Invoicing Residential Remodel System Fast Easy Accounting Sample Pay Application We Prepare For Our Clients Using QuickBooks Reports It needs to be in place before starting any remodeling project. It will save you and your remodel client much grief, and your cash flow and profits will soar. We work with contractors like you to develop strategies to deal with these issues and more. Homeowners expecting their house to be improved suddenly find themselves under siege from a group of cavemen who are ripping and tearing their living quarters apart, and they panic. Some homeowners will tell you they are miserable; some will say nothing, having decided to get even with you once the job is done by withholding final payment! Some consider calling 9-1-1, but they don't because they would be laughed at and perhaps irritate the contractor. Under-promise and over-deliver At some point, your remodeling business will be so busy that customers will be stuck waiting for service. In those cases, under promise and overdeliver. If you know something will take five days, tell the customer it will take a week. Customers are happier if something takes less time than expected than if it takes more. This tactic also buys you time in case of unexpected delays. The worst thing in this situation is that you have to tell customers their wait will be longer repeatedly. That frustrates them and makes them less likely to come back.  Final thoughts Line-ups and wait times are inevitable, but they don't necessarily mean you need to hire more employees. There are solutions available to you that enhance the customer experience without you hiring more people.  It is your responsibility as a contractor to understand the fears and concerns of your client and have a communication plan in place as part of the overall project plan. 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  

    441: Four Things To Consider Before Expanding Your Service Offerings

    Play Episode Listen Later Oct 15, 2021 8:01

    This Podcast Is Episode Number 441, And It's About Four Things To Consider Before Expanding Your Service Offerings If you're looking to grow your construction business, you might consider expanding your service offerings. Adding additional services is an excellent way to increase your profitability, diversify your income and expand your market. But there are essential things to consider before adding to your income streams.   First things first - find the money. If you don't have savings earmarked to fund your ideas, you'll want to make sure your "scaling my construction business" plan includes adequate financial planning. Applying to a lender for a business loan is one option. In this case, you'll want to include up-to-date cash flow reports, income statements, budgets, and projections in your plan for a potential lender.   If your construction business doesn't have a credit history, you may need to look at other options for financing your plans. Using a business credit card regularly and paying off the balance can help you build a good credit rating, which will help you prepare to apply for a loan down the road.   Here are four important things to keep in mind when you consider adding to your services. 1. Does the expansion complement your company? The best way to expand your service offerings is to add value that complements the work you're already doing and is attractive to your current client base. While it takes more effort to bring new customers in, adding something that your existing clients need and that you already have the capacity for is an efficient way to increase your profits. If you already offer lawn maintenance, find out what other yard work your clients need done, for example. It might be reasonably simple for you to provide those services to your clients, and they'd probably be happy for you to do it rather than hiring someone new. 2. Is your profitability consistently high? Spending money to hire new people and buy more equipment if your business isn't consistently profitable is risky. It might be tempting if you make much money in one year to jump into offering a new service, but hold back until you've got a couple of years of high profits behind you. That allows you to save money to cover the increased expenses and ensure that the one year wasn't an anomaly. Invest in your business, but expand your services when your profits are consistently up, not when you've had one outstanding period. 3. Is there a potential partnership or merger that makes sense? There are times when forming a partnership or otherwise merging businesses makes sense. Is there someone out there who works in a similar capacity that you could work well with? Maybe they are excellent in their field but need help running a business. Explore a partnership or a buy-out. For example, if you offer Residential Home (Builder) consulting and you know someone who provides relocation services, you might form a partnership so the new company can provide both customized help and relocation services. That can lead to new clients for both you and your new partner. Keep in mind, joint ventures are a bit like change orders. They can be an incredible opportunity to make or lose much money very quickly. 4. Are you doing it for the right reasons? There are many good reasons to add new services, but there are also reasons to increase your risks. Competition, for example. While competition can drive innovation, it's not the only reason to add a new service—and doing so just to beat your competitors can lead to mistakes being made and money being lost. Rushing to expand is when companies find themselves in trouble for adding services there's no market for or without a fully-formed plan. Final thoughts For your construction company to survive and thrive in any economy, you must pick a niche market and develop your Strategic Business Process Management System (BPM) with definitely written goals of what you want to accomplish and how much money you want to earn from it. Your construction accountant can help provide additional financial advice and support as you update your business plan based on your most current financial records.  Expanding your business is exciting, but it's important to consider some issues before committing your time, energy, and financial resources. If you're adding new services, do so because it makes sense, you're in a financial position to do so, your clients want it, and you have the capacity for it. 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    

    440: How Construction Business Owners Gain Personal Time By Working Smarter

    Play Episode Listen Later Oct 8, 2021 10:05

    This Podcast Is Episode Number 440, And It's About How Construction Business Owners Gain Personal Time By Working Smarter You've probably heard the maxim that it's better to work smarter than harder. Working smarter means allocating your time, energy, and money so vital tasks get done more efficiently, freeing up your time.   Too many construction business owners think they must keep working harder—taking on more responsibilities and working longer hours to succeed. It makes sense because you're responsible for your business, but that route leads to work overload and burnout. Ultimately, your business will be unsustainable if you keep pushing yourself to work harder.   It doesn't matter how many times you are knocked down; it only matters that you learn your lessons, get up, and go again. Some lessons we already took note of years ago, having owned and operated our construction company. By building a system and gaining insight from us, you can pick up from our mistakes which you don't have to go through and can start avoiding before it comes crashing down.     

    439: Understanding Roles And Why It Makes Sense To Hire Us

    Play Episode Listen Later Oct 1, 2021 10:02

    This Podcast Is Episode Number 439, And It's About Understanding Roles And Why It Makes Sense To Hire Us I will start by quoting a short sentence found in the all-time best-seller "Basic Instructions Before Leaving Earth" That is an acronym; take the first letter of each word and put it together to form a different word. "No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other.." there is more to that, and the point is that concept applies to accounting.   How many times have you hired someone with the expectation they knew how construction works, and then you found out they did not have a clue about it or your particular type of construction? It happens all the time, and the first thing that crosses your mind cannot be posted on this blog. We know how much you would like to take action and fix it immediately. But before you do all that, let's go back to understanding roles to know which one you need.   Three Skill Sets = Three Types Of People Bookkeeper The primary role of a bookkeeper is to handle a company's day-to-day financial management. A bookkeeper will take care of the small but essential details essential for providing an accurate picture of where a business stands at any given moment. In addition to a bookkeeper's main job – making sure every financial transaction is accurately recorded in the general ledger – they may also take over other critical tasks like invoicing, paying suppliers and vendors, and processing payroll. Ideally, a construction company's books are updated at the end of each business day, so you always have an accurate account of your sales, expenses, and the bottom line. However, if your business is still in its early stages, without much financial activity or the funds to hire a bookkeeper, you should aim to reconcile your accounts at least once a week. Accountant An accountant's primary role is to help companies make sense of their numbers for strategic planning - analyzing, summarizing, interpreting, and reporting financial data to provide "big picture" business advice. As a construction business owner, you'll want to work with an accountant from very early days to help with budgeting, forecasting, and decision making – as well as for strategic tax advice and identifying opportunities to reduce costs and maximize profitability.  Many business owners think they only need to talk to their accountant once a year at tax time. But to be able to gauge the health of your business - and make the most of your accountant's expertise - it's recommended you check in at least once a month. Your monthly meeting is a chance to review key reports, like your profit and loss statement, discuss opportunities or areas of concern, and get timely advice to help meet the goals you've set out in your annual business plan. Certified Public Accountant The C.P.A.'s primary function is to prepare the annual tax return, perform audits, and prepare Certified Financial Statements for bank loans when a construction contractor requires them before issuing a construction bond. Keep in mind that most Certified Public Accountant accounting specialists can do all accounting for most standard businesses that only need regular accounting but not construction accounting. Construction company owners who think it's costly to hire a construction accountant and would instead only seek a C.P.A.'s help might be in for more business damage in the long run. What C.P.A.'s Do And What Construction Accountants Do   Why it makes sense to hire us We pride ourselves on employing the most competent construction bookkeeping professionals and ProAdvisors in the business. Our employees have passed our extensive test, a thorough background check, and a personality screening process. Most of our employees have over 10,000 hours of bookkeeping experience. This level of expertise is tough to find when seeking a part-time employee.  Unlike hiring employees, you don't pay for any 'down time' or office chatter, excessively long breaks, cell phone calls, surfing the web. You are charged only for the time our professional bookkeepers are doing your construction bookkeeping work. Our people have the knowledge, skill and we have systems in place to work fast, saving you time and money. Online Data Protection is critical to providing you reliable and professional-grade outsourced contractor's bookkeeping services. At Fast Easy Accounting, Cloud Security is not an option- it is a fundamental requirement. We only use Intuit Approved Commercial Hosting Services. We have taken steps to select the best to ensure that your data is as secure as that found for online banking and financial institutions. Their Cloud Security rests on U.S.-based servers, backups, data centers, and technical support. Not one aspect of our Cloud security relies on outsourced services or offshore locations. We do not offer long-term contracts even though contractors have asked for them. The reason they ask for them is to protect themselves against price hikes and unpleasant hourly billing surprises. They love it when they understand that we offer fixed flat-rate pricing and that the agreement is month-to-month. This means the burden is on us to perform at a high level, constantly innovate, modernize and improve our services because every bookkeeper, accountant, and support staff member's livelihood and future paychecks depend on being re-hired every month by our contractor clients. Final thoughts Construction Accountants should not be preparing annual tax returns - either be a tax accountant and serve the interest of the tax collection agencies or be a construction accountant and serve the interest of contractors. C.P.A.'s are like I.R.S. agents in that they owe their primary allegiance to the tax collecting agencies, and that is O.K. because the government needs our tax dollars to operate. Construction accountants owe their primary allegiance to the contractor. Our role is to help the contractor optimize their construction company to generate the most cash flow and profit over the long term. 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

    438: Proven Proactive Contractors Formula To Get Things Done And Get Paid

    Play Episode Listen Later Sep 24, 2021 10:46

    This Podcast Is Episode Number 438, And It's About Proven Proactive Contractors Formula To Get Things Done And Get Paid As much as we plan, it would be best if you were flexible, adaptable, and reliant. Things happen that are beyond your immediate control. Those of you who want a predictable environment are employees working for a large employer where schedules are fixed and doing the same things every day.      It was a different mindset when you became a Construction Business owner. You wanted to be independent, and part of being independent is that there is no one telling you what to do or when to do it. Your suppliers and government agencies direct you and impose fines and penalties when you get off track.   Proactive versus reactive are the two methods of getting something done. I find everyone works in a combination of both, I included. Proactive is scheduling and doing everything ahead of time. Nothing is ever waiting until the last minute. Reactive is more emergency-driven and are things that need to be done now.   As the Construction Contractor owner paying the bills, you are constantly concerned about "Making Money or Losing Money" jobs. It never seems like there is any money left over! Why does it seem like I am just watching the money fly by and zooming out of my checking account? First things first: Have you invoiced everyone? Do you have an easy way for your clients to pay you? Change orders - get them signed and delivered where appropriate (ASAP). Sloppy bookkeeping happens just a little at a time. There are not any limits to the number of transactions that can be entered into QuickBooks improperly. Messy files build transaction by transaction or, more simply put, invoice by invoice, receipt by receipt all can be entered into QuickBooks improperly. No popup says "This Is WRONG" – Do It Over. Reactive contractors practice the "Keep It Simple Method" for bookkeeping. Put all of the receipts in the drawer, out of sight and out of mind. The drawer is next to the computer with the QuickBooks for Contractors or other Bookkeeping Software on it.  Using the power of Wishful Thinking, the hope is that the transactions will "Magically Appear" into the Bookkeeping software without any additional assistance. Unfortunately, with all of the technology available, it still requires the help of a "Real Person" with skills to know where to put the transaction into the system.  Watch out for the customers who are not looking to pay you the value of your services.  These can be other contractors where you are working as a trade contractor or retail clients. Understand the rules about Notice To The Owner, and each state may have different laws.  RED FLAG anytime a homeowner or general contractor implies you will not get the job if you do not do this. On larger jobs, make it a habit to do Notice Of Intent To Lien. The notice does not say you will lien but protects your rights if you are not getting promptly paid. DO IT NOW – USE A SERVICE. Run, don't walk. If you are being threatened, then chances are they do not intend to pay you. Your supplier, whenever material is delivered, will automatically do a Notice Of Intent To Lien. This is a good thing because they are helping make sure you get paid for the material used on the job.  As a contraction accountant, I hear stories every day. Some are from contractors who gleefully brag about rejecting the estimates unless a discount is given (even when they know the price is reasonable). In my opinion, these are not good customers, just professional scammers. A good contractor knows his pricing and wants to give good value to his customers and pay a fair price to his contractors.     I have heard people bragging about not paying the contractor unless additional unpaid work is completed in social settings. It takes a lot for a customer (I mean scammer) to get on "The Bad List" of fast food places. Do you have clients, customers, or professional scammers? Just a fence create good neighbors; using a lien service helps you get paid. The alternative is that you are racking up your credit card and spending lots of interest. It is an incentive to pay you. Those who never plan to scam; do not have a problem. In my opinion, it is the scammers who object the loudest.  It is hard enough being a Contractor; this is an easy way to get rid of those who never intend to pay you.  Reactive needs to engage in a service that factors your Accounts Receivables, and more desperate forms of financing are when you have a Quick, Fast Loan that requires daily or weekly repayments.  The least painful is to collect the money from your client. If being a little aggressive to enforce your lien rights is needed – Do It. – Do It Now, because your general contractors are protecting their lien rights.   In some states, if you are out of business, you can not collect your outstanding Accounts Receivables.  Final thoughts You can't spend or invest money you do not have. It is unreasonable to expect your suppliers to accept your credit card to pay your invoices, and you refuse to do the same. You can't afford the excuse; the rates are too high; I want you to refer back to the high cost of No Money or get a high-risk loan. In comparison using merchant services is cheap, and funding is usually in 1-2 days. Both clients and customers typically have a credit card tucked away for emergencies. Polite and tactful are not making your client "feel bad" if they need to split the payment between several cards.  Practice what we preach. We offer a Free Hour Consultation in which I try to provide value regardless of you purchasing future services from us. It is by exception that I take checks even from local clients. Affectionately, I summarize my role for Outsourced Accounting Clients as Nurture, Nap, and Follow Up. In other words, I can say the same things other people around you say, but it comes out better. On the flip-side, we have been in construction and construction-related services a long time and know "BS" when we hear it! We are looking forward to helping you, and we expect our clients to follow directions so we can. 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    

    437: How A Bookkeeper's Incompetence Can Ruin Your Construction Business

    Play Episode Listen Later Sep 17, 2021 8:59

    This Podcast Is Episode Number 437, And It's About How A Bookkeeper's Incompetence Can Ruin Your Construction Business Contractors, by nature, are tenacious, resilient, and have a tremendous amount of "Grit And Determination To Succeed," which means they are not easily disturbed or prone to react hastily or rashly at the first sign of trouble. This is just one of the many qualities I sincerely admire about these remarkable men and women.   Like you, we have callouses on our hands, having owned and operated construction companies, and some of us have served an apprenticeship in one of the construction trades. In other words, when it comes to owning, managing, and making a substantial amount of money with construction and contractor service companies, we know what we are talking about.   Incompetent bookkeepers can destroy your construction company and your finances. Unfortunately, until a contractor has gotten to know us, they tend to think of us as just another contractor's bookkeeping service. This means some contractors think we are crazy to suggest that any trusted employee, especially an in-house bookkeeper, would steal money from their company, so they ignore us until it is too late.   Furthermore, the Construction Bookkeeper Embezzlers come in every race, creed, color, gender, and age. At least, you can filter out the incompetent ones, but there is no definitive profile, no absolute way to know which contractor bookkeeper is an embezzler until they have been caught and convicted. Even then, if you do not perform extensive background checks, you may never know it until it is too late. As a small business owner, you're likely concerned about every penny you spend. That's a good thing because you need to keep track of your income and expenses. However, it also means that you might be less likely to hire people to help your business. People like the competent bookkeepers, who are great investments for any small business. So what exactly does a construction bookkeeper do? Construction Bookkeepers take care of the daily financial records for your business and make sure your books balance. They use bookkeeping software, such as QuickBooks Desktop For Contractors or Xero (like we do) to track receipts, reimbursements, reconcile accounts, and prepare specific financial reports. All the frustrating day-to-day financial stuff that you probably dislike they love. A competent Construction Bookkeeper who is an expert in their field is an excellent investment for your small business for several reasons:  1. They save you time Unless you're great at bookkeeping and enjoy it, you may find bookkeeping a headache. Chances are, you'll put it off until it's a massive chore to take on, then take ten times as long to do it. You'll find it takes you away from other business tasks such as training staff, networking, or marketing your construction business. The time you spend trying to understand your financials could be better spent on tasks you're good at. A construction bookkeeper should be more efficient; they won't have as many errors and can save you a lot of stress in the long run.  Your time—and your sanity—are worth the cost of a competent bookkeeper.  2. They are experts in their field Are you up to date on the various tax laws and fully aware of how they affect your contracting business? Bookkeepers are. They can advise you about any changes to the tax laws and what those mean for your business.  Construction Bookkeepers can also provide you with insight into your company's financial situation. If you're overspending in a particular area or need to reallocate funds, your bookkeeper will tell you. If there's something you don't understand about your financial situation, they will explain it to you, so your financial situation isn't a mystery.  3. They prevent errors Because construction bookkeepers are experts in this field, they won't make the same mistakes you'll make. Those mistakes might seem small at first, but data entry errors, mixing up expenses, and other errors can add up, costing you money.    Final thoughts What happens when the person in control of QuickBooks is unhappy with you? The same thing that happens when the person who cooks your food is unhappy with you.  We have seen bad bookkeepers ruin too many businesses, especially construction businesses. In most cases, it was Bookkeeper Incompetence or Bookkeeper Embezzlement. In other cases, it appears there may have been some deliberate identity theft; however, we cannot be sure.  All we know for sure is that we have witnessed business failures that have led to divorce, families destroyed, finances wiped out, and people living on the streets. Make sure you hire the right one for your construction company. The services a competent bookkeeper provides can help you financially in the long run. They also prevent a lot of headaches and save you valuable time. As a construction business owner, there's no way you can be an expert in all aspects of running your business. If you don't like bookkeeping or don't have the time or knowledge to do it well, a bookkeeper is a valuable resource and an excellent investment for you.  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

    436: The Advantages Of Healthy Competition For Your Contracting Business

    Play Episode Listen Later Sep 10, 2021 8:10

    This Podcast Is Episode Number 436, And It's About The Advantages Of Healthy Competition For Your Contracting Business Starting a construction business means you'll compete with other companies that already exist. It's a good thing if you have a competition to go up against. Competition pushes you to be innovative. It also means there's an established community for your services.   What about if you're considered a veteran at this stage? Understand that you cannot outwork your competition forever because you will grow old and tired in time, and there will always be someone else who is newer, younger and works cheaper than you can.   Being aware and mindful of what others in your industry have developed and provided leads to a newfound motivation and belief in making an impactful difference, whether within your company or your community.   The key to benefitting from the competition is knowing how to take on competitors, so your company earns a profit effectively. Here are some ways to get ahead of your competition and grow your construction business. 1. Respond to client needs  Large businesses have weaknesses. The bigger they are, the less personalized and responsive their service is. They market themselves to a broader audience and, because their overhead is higher, they have to bring in more clients to cover their costs.  In this respect, your size is an advantage. Fewer customers mean more personal service. That opportunity for relationship building will entice customers who are looking for extra attention.   Examine what people love about your competitors but also what frustrates them. Build your business to address those gaps. If you find that something isn't working with your customers early on, don't be afraid to shift. Be innovative in responding to market changes and client demands. You'll have an easier time making that change early than once you're more fully established.  2. Show what makes you different Your business offers something different from other contractors in the area. If you didn't have something unique, you wouldn't be starting a business. You're different from what's already out there—and that's what makes you attractive to your target market. Do you have special knowledge or expertise in your industry? Are you offering a service that has a new component, such as a technological advantage? Does your product fill an existing gap in the market?  Whatever it is that makes you different, market that. Make sure people know why and how you're unique. 3. Take advantage of existing knowledge If there are already established competitors in your industry, that's a good thing. It means someone has already done vital research on your customers' needs and pain points.  You can learn from the knowledge that already exists by studying your competition. Look at their website, social media, and review sites. Take note of how they sell their goods or services. Are they using tactics relevant for you? Are their strategies effective? Are there weaknesses in their marketing or offerings that you can address?  Rather than spending your money doing your research, learn from the construction businesses that have gone before you.  4. Focus on your audience There's room enough in most industries for competition. While it's a good idea to know who you're up against, ultimately, your clients are your priority. Focus your efforts on providing goods and services meaningful to them, address their pain points, and improve their lives. Market yourself to make those aspects clear. Show them why you're the ideal company to hire for their project.   Final thoughts Look into your industry and the successful contractors around you not to lose sight of your vision for your construction company but as an inspiration to guide your systems and processes. Using these four strategies can effectively take on the competition and help your construction business be successful. Take it one step further by hiring an expert to help you with the things you are not an expert of - for instance, hiring a Website/Social Media Manager to take care of your online presence, as this is your digital office.  Of course, a financial advisor or a construction accountant who has been where you want to go and can guide you will benefit your construction business. We want to be that person for you. Optimize your time and skills by doing what you love and do best. Fill out the form on the right, call me at 206-361-3950 or 1-800-361-1770, or send me an email at sharie@fasteasyaccounting.com and schedule your no charge one-hour consultation. 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      

    435: Construction Company Recovery After A Financial Setback

    Play Episode Listen Later Sep 3, 2021 8:18

    This Podcast Is Episode Number 435, And It's About Construction Company Recovery After A Financial Setback You started your construction business with plans of earning a living and being successful, but an unfortunate fact of business life is that companies suffer financial hardships. Whether those hardships are pandemic-related or linked to other urgent situations, the effect is still the same. Your finances are negatively affected, and it's up to you to lead the recovery.   Almost all business sectors have experienced declining profits, liquidity that is drying out, and even bankruptcy. Although the short-term outlook varies depending on your industry sector, all business leaders need to set up a strategy to guide their way towards recovery.    Here are five steps you can take to help your business recover after a financial setback. 1. Find areas to cut back. As a business owner, you'll always have expenses, but there are ways to reduce your spending and save money. Negotiate rates with your suppliers or find out if you can make arrangements for a discount. If not, see if you can switch providers. Look for ways to cut back on office expenses. Can your office staff work remotely? Can some of your office space be rented out? Can you change utility providers? You likely don't want to cut back on your staff if possible, but you may have to. If you don't want to lay staff off, try reducing hours or cutting back on perks until things turn around. 2. Follow up with clients that owe you money. During busy times it's tempting to be more laid back with clients who owe you money. When you've had a financial setback, it's essential to take stock of who owes you money and start collecting. Go through your invoicing system and follow up with anyone who owes you money. You might be surprised at how much could be coming your way. If cash flow is a concern, consider charging clients a deposit to work with you. Doing so speeds up how quickly you have money coming in. Remember - OPM (Other People's Money). Construction companies need short-term liquid working capital such as cash, lines of credit, loans, owner financing, credit cards, supplier accounts, and other forms of money to conduct daily operations. Ensure all change orders are documented with a scope of work and paid in advance before the work begins. 3. Diversify your income Governments around the world are offering assistance to small businesses affected by the pandemic. Look into business grants and income support schemes in your area designed to help your business recover. Consider other ways of diversifying your income. If you're an expert in a particular construction field, offer virtual courses or workshops to teach others what you know. If you provide services in one niche, consider whether another area might be closely related to yours to allow for expansion. 4. Review your budget If your budget was created before the financial emergency, go over it again and revise it as necessary. See if anything in it can be removed or delayed. If you plan on offering training seminars for employees, consider postponing for a few months. If you budgeted to expand your business, hold off until you're more financially stable. 5. Increase your marketing You need to bring in customers. To do this, you need to market your business. Traditional advertising can help, but there are more cost-effective ways to go about it. Explore content marketing or social media. Consider email newsletters or search engine optimization. Marketing reminds people about your business, and although it may seem like a bad idea to spend money at the moment, some spending is worth it in the long run. Not all marketing is expensive—and some can be just as effective as traditional advertising.  Final thoughts Financial setbacks are upsetting and frustrating, but they don't mean your business is finished. Follow these strategies to give your company the best chances of recovery.       Your construction company might have changed drastically in recent months. There is good news in that, too. It means your business is adaptable and that you can find ways to survive.   While you prepare to get your construction business back to full speed, it also helps to have a business expert guide you in rethinking your business strategy and rebuilding it into a more resilient one. If you need personalized advice about your specific situation, get in touch with us to work out a plan. 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    

    434: The Actual Net Worth Of Your Construction Company

    Play Episode Listen Later Aug 27, 2021 12:23

    This Podcast Is Episode Number 434, And It's About The Actual Net Worth Of Your Construction Company Have you been in business as a construction contractor or specialty contractor for a while, and now you are wondering what your construction company is worth?   Nothing is ever as good or as bad as it appears. If you are like most contractors, you learned a trade, skill, or craft, and after a while, you decided to go into business for yourself and make "The Big Bucks," which was one of the happiest days of your life. I've heard It said that boat owners experience two of the happiest days in their lives; the day they bought their boat and the day they sold it.   So, how much is your construction contracting company worth?  Accounting Value: Equity Which Is [Assets or What You Own] (Cash, Tools, Material, Loans The Company Made) - [Liabilities or What You Owe] (Payables, Credit Card Balances) = [Equity or what is left Over]. These numbers are found on your construction company Balance Sheet. See the example below and notice the highlighted line "Total Equity," which is $305,616.56. This means as far as the accounting records are concerned: #1 If the owner collected all of the money owed to them [Accounts Receivable] and got the security deposit back. #2 Sold all vehicles, computers, office equipment, machinery, and equipment [Fixed Assets] for the amount shown. #3 Paid all of the bills [Accounts Payable], [Credit Cards], [Other Current Liabilities], [Long Term Liabilities]. #4 There would be $305,616.56 in cash for the owner. The Real World: The actual net worth of your construction contracting company is what someone else will pay you for it. There are 100's of factors that affect how much your construction company is worth, and I have listed nine of them below: #1 Length of Time In Business - In general, the longer your business has been around, the better. Just know that everything changes rapidly, so what occurred more than three years ago may not be as relevant in most cases. #2 Standard Financial Statements - There are several ways to set up QuickBooks for Contractors. It depends on what you want from them. Internal Financial Statements are what most bookkeepers set up, which means they may add a lot of fluff and try to capture Work-In-Process (W.I.P.) and Job Costing in the Chart of Accounts, which is acceptable for your internal use next to worthless for anyone outside your company. Tax Preparer Financial Statements are what most C.P.A.'s and Tax Preparers setup which means they keep the Chart of Accounts small as possible and mirror the annual tax return as close as possible. This helps them get the tax return done in the least amount of time and effort possible. It is next to worthless for you, the contractor, and anyone else. Standard Financial Statements are what most bankers and investors like to see because the Chart of Accounts is set up to make it possible for them to understand the financial health and well-being of your Construction Company. Most banks subscribe to a service like The Risk Management Association (R.M.A.) that allows them to input key data from your Financial Statements and returns an in-depth analysis of your construction company. This means when a contractor gives their banker, investor, or potential buyer anything but Standard Financial Statements; they are "Shooting Themselves In The Foot With A Nail Gun." Our Contractor Bookkeeping System can provide you with Standard Financial Statements; unless you or your bookkeeper makes adjustments in the Chart of Accounts. You and your bookkeeper can make any adjustments in the Item lists, and as long as they are linked to the correct account in the Chart of Accounts, it will be O.K. #3 Net Income - Is your construction company earning enough money to pay you a decent salary? Which should be at least twice your highest-paid employee and at least 10% net profit after all costs, including Income Taxes. #4 Cash Flow - Is there enough cash in the bank or money market accounts to keep your company running for at least 60 days? And is your cash balance growing every year by at least 5%? #5 Number of Customers or Clients - Which do you have Customers or Clients? Having the right mix of quality customers or clients that provide a lot of top-line sales and revenue. Quantity is not as important as quality. #6 New Customer or Client Acquisition Strategy - A simple documented strategy outlining your best customer demographics and psychographics profile, so you know who they are, where they are, and how to attract them. #7 Existing Customer or Client Retention Strategy - A simple documented strategy outlining the changing needs of your customers and clients based upon the profile of your best customer demographics and psychographics, so you know what they are going to want before they do and continually innovate your services to those wants, wishes, and desires. #8 Documented Operations Manuals - Don't get trapped by the lazy way of training people by paying people to learn by experience or by sitting around the "Camp Fire," "Water Cooler," "Break-Room," or "Job site." In the end, you will have chaos because everybody will have a different way of doing everything, and no amount of yelling, screaming, threats, punishment will be adequate. In the end, you will waste a lot of money that should have gone to bottom line profits. This can be avoided with documented operations manuals. #9 Unique Selling Proposition - the one thing you do best that makes you the most money is your Unique Selling Proposition. One of our Plumbing companies in the 1990s was maintenance contracts for fast food restaurants. We made a lot of money by cleaning their drains and side sewers during their slow times instead of waiting until it was an emergency and fixing and replacing leaking faucets because we could schedule the work to be done by our crews during our slow time. Final thoughts Remember, there is a world of difference between Regular Accounting and Construction Accounting. Construction Accounting is the center of your construction business; pay attention to what it says, and it can make you wealthy. The value in your bookkeeping and the actual net worth of your company lies in the accuracy of the reports. With the appropriate tools and processes, you can have the insights you need to manage and grow your construction company effectively and efficiently, even without you running it. You can sit back and relax while you monitor and manage the work-in-process you already laid out. The last thing I leave you is "Knowledge is Power." There are simple answers to all complex problems, and they are usually wrong. Invest the time, money, and effort to do it right the first time. You have what it takes to be successful, and you deserve to be wealthy because contractors add value to other people's lives.  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

    433: Why Smart Construction Business Owners Never Stop Marketing

    Play Episode Listen Later Aug 20, 2021 8:28

    This Podcast Is Episode Number 433, And It's About Why Smart Construction Business Owners Never Stop Marketing One classic mistake construction business owners make when money gets tight is stopping marketing or cutting their budgets. At first glance, it seems logical to cut down your expenses during harsh economic conditions. However, in reality, it's the opposite of what you should do.   When your construction company is struggling, cutting your marketing budget will further hurt your business. During this time, you should go the extra mile to be at the forefront of the minds of your clients and prospects. With an effective marketing strategy, you should be able to increase sales.   However, if you need to tighten your belt, here are some steps you can take instead of putting a pause on your marketing efforts. 1. Be strategic about how you spend your money. First of all, don't waste money. This sounds simple, but in reality, many construction business owners are not mindful of their spending. Be strategic in your spending, and don't throw money in areas that won't contribute to your business growth. For instance, if your data suggests that the returns are higher from your digital marketing efforts compared to print ads, you might want to dedicate your resources more online.  2. Invest in action campaigns. Are you launching a new service or running a discount promotion? Invest in an active campaign that will provide your target market with all the information they need and prompt them to act. Ensure that you share all the details such as your website, exact location, operating hours, or a discount code for their purchases. 3. Communicate with your target market. Ensure that your messaging is not only engaging but crystal clear and concise. Whether you want them to sign up for a newsletter, request information, or grab a special offer, your messaging must be clear. The call-to-action in your campaigns must also be solid and powerful to create the desired action. 4. Social Media channels are free. Your social media presence makes your company accessible to your prospective clients. It promotes awareness and increases web traffic. Consider your persona and research what platform will serve you best. If you're not confident and savvy, I suggest going through social media sites to check where your competitors are and how they interact with their patrons. Pick three platforms to start with and download their mobile apps. Share bite-size information and good, quality photos to attract potential clients. Since people retain more information when a post is paired with a relevant image, let's focus on photos: Behind the scenes Team/crew Office events Quotes Industry insights Local gatherings Community Events you're sponsoring/attending Random tip Latest industry news Company sales and promotions (this could seem "salesy" but works great when done right and timed-appropriately) Keep in mind that consistency is key. Interact with your audience and always be authentic.  5. Discuss with your marketing partner/staff and rethink your marketing strategy. You may be working on a thousand other things right now, but you have to make time to discuss with your marketing partner or staff and rethink your strategy. Producing great results is not always about marketing; instead, you have to focus on doing better. Stop and think about your messaging, frequency, timing, channels you tap into, and other factors to get the best results. Final Thoughts These could be intimidating at first due to a lack of experience or being preoccupied with finishing projects. Don't feel defeated; understand that your strategies need to evolve and expand for your company to prosper as a construction business owner. Be an active listener to the online community you built, and chances are you'll get high-quality leads from them. Times may be challenging right now, but try your best to stay the course and use this as an opportunity to strengthen your relationship with your customers and prospects. Just because you're on a tight budget doesn't mean you have to stop marketing and give up the chance to boost sales. Always have a monitoring method if your marketing is working or not—otherwise, you can't refine and improve your marketing strategies and budget (for paid ones) unless you measure the results. 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

    432: Cash Flow Advice For Construction Businesses

    Play Episode Listen Later Aug 13, 2021 8:41

    This Podcast Is Episode Number 432, And It's About Cash Flow Advice For Construction Businesses Solid cash flow management is vital to ensuring your business survives, but not everyone understands what cash flow is or how to manage it. That's likely what makes it a leading cause of stress for construction business owners.   Cash flow refers to the movement of money into and out of your business. It's based on the amount of money you bring in minus the amount you spend. A positive cash flow means you're bringing in more than you're spending. A negative cash flow means you aren't bringing in enough to cover your expenses. Your company can run into problems by not charging enough for goods or services, having late-paying clients chronically, growing too quickly, or simply spending too much money.   Without proper tracking and matching of income and expenses, most construction companies never know if they made a profit until the job is over. Cash flow can vary throughout the year, depending on sales cycles or whether you've made a large purchase. Here are three strategies you can use to gain control over your cash flow. 1. Understand your profitability Managing your cash flow is excellent, but it won't help you if your business isn't profitable. Take a look at each of your services to determine how much they bring into your business compared with how much you spend to provide them. Find any inefficiencies in your processes and eliminate them if possible. Figure out where your business is most profitable and where you're dealing with cost overruns. The basis of a solid cash flow is ensuring you offer goods and services that are profitable and help you obtain your goals while reducing those that negatively affect your finances. You may need to increase your prices to reflect the cost of goods sold or stop selling lower-margin products or services. Similarly, take a look at your clients. Are there some that you are undercharging or spending too much time and energy on? Can you increase their fees or find higher-paying clients? 2. Write a cash flow forecast Your cash flow forecast (also called a cash flow projection) predicts how your business will perform financially over a set period. It's a good idea to have a cash flow forecast for a year, broken down into quarters and months. The projection considers your revenue and expenses over those set periods and helps you figure out how much you need to make in that period to cover your costs. It can also allow you to anticipate any upcoming cash flow issues, such as slower periods that may require you to cut back on expenses. If you have any anticipated big-ticket items you'll need to buy or plans to expand your business, include those in your forecast. Periodically check your actual cash position against your projection to see how you're doing and if you need to make any adjustments. 3. Use technology to keep on track There are plenty of software solutions that can help you gain insight into your company's cash flow. They can help you build projections and get a real-time view of how your construction business is doing. This information can then be shared among company managers so everyone can know how the company is doing financially and where strategies need to be put in place or altered to get you back on track. Additionally, invoicing software and project management software can encourage faster, more manageable payment from clients and keep projects on budget. This will also improve your cash flow. Final thoughts Many business owners find cash flow management stressful, but with a bit of information and planning, and by using the right tools, you can have better insights into your company's financial situation. Those insights will help you make better decisions for your business and gain control over your cash flow. Because of the unique nature of construction accounting, most accountants have little understanding of how construction accounting works. Construction accountants are skilled in providing accurate information for contractors, while C.P.A.'s and tax preparers are trained to make sure contractors pay their fair share of income taxes. The bottom line is working with us; you get the best contractor bookkeeping services company on your side, which means you will substantially improve your chances of success. We are not Jack-Of-All-Trades, Master-Of-None accountants, or bookkeepers who take anyone who contacts us. We are Construction Accounting Specialists with one purpose and only one purpose; serve construction contractors in the business and prepare to get into business. 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  

    431: How To Build An Effective Financial Plan For Your Construction Business

    Play Episode Listen Later Aug 6, 2021 9:48

    This Podcast Is Episode Number 431, And It's About Consequences Of Avoiding Your Construction Bookkeeping Every business needs a financial plan. Your financial plan gives you a way to monitor and review your cash flow, make adjustments to your spending, and anticipate any upcoming economic issues. It can also make you more prepared to request funding or find investors so you can bring more money into your construction business.   Although many business owners are aware that financial planning is essential, it is often overlooked. Without a financial plan, however, you could find your business doesn't make the money you expected it to—or you could wind up with unanticipated expenses and no way of paying for them.   If you are a contractor, you are most likely a "doer," someone who gets things done, not now but right now! When you see anyone not swinging a hammer, drilling holes, pouring concrete, laying carpet, putting paint on the walls, or a thousand other construction tasks, the first thing you think is they are wasting time and money, and you want no part of that nonsense!   Having worked with contractors for a long time, we saw what highly profitable contractors do those other contractors don't: they all have a documented Business Plan that they review and update during the two weeks following every calendar quarter. Advantages: Prior Planning Prevents Poor Performance. When you take a vacation, you plan for it. When you buy a truck or a tool, you plan for it. You can plan your exit strategy to retire comfortably. Cash flow and Profit is no accident; it is a result of deliberate action. The economy will not impact you as hard because you will see changes coming. When you were a child, you enjoyed surprises but not in your construction company. Excuses:  I don't have the time to plan; I have work to get done! It is a lot of work, and I don't know if it will be worth it. None of my contractor friends who are in debt up to their ears do it.  Most contractors hate putting together a documented Business Plan until it is finished, and they start seeing the power of setting financial goals come alive then they say, "why didn't I do this sooner?" As Napoleon Hill is famous for saying, "Whatever the mind of man can conceive and believe, it can achieve." It is not enough to say, "I want to make a lot of money!" because the Universe is always in balance and responds to specific requests. Here are some steps to take to build an effective financial plan for your construction business: 1. Set your goals You need to know where your construction business is now and where you want it to be so you can develop a financial strategy to move forward. At least once a year, ask yourself important questions so you can plan for what's to come. Among the questions to ask: ● Do I need to expand or grow my business (in terms of staff, locations, or goods and services)? ● Do I need to make any large equipment purchases? ● What resources might I need to buy this year? ● How will any acquisitions or expansions affect my cash flow? ● What adjustments might be required to address these expenses? 2. Understand your cash flow To build an effective financial plan for your business, you must understand your cash flow. Your cash flow is the movement of cash into and out of your business. If you have more money coming in than going out, you have a favorable cash flow situation and can pay your expenses. If more money is going out than coming in, you are in a negative cash flow situation and need to bring in more money. Understanding cash flow—including sales cycles—will help you build a plan for your business. For example, if your business is seasonal, it helps to know when sales drop and for how long, so you can plan for those periods. You can also anticipate when sales will be higher, and you'll have extra money to set aside for emergency expenses. Remember that cash flow and profitability aren't the same things. Your business can be profitable, but if none of your clients are paying you on time, you won't have the necessary cash flow to stay afloat. 3. Create a sales projection An essential part of your plan is your sales projection. This is related to your cash flow forecast but focuses on your sales. It gives you insight into every segment of your construction business to better understand which of your offerings brings in the highest sales. When you forecast your sales, make sure you include the cost of goods sold to determine your predicted growth margin. This information will help you determine which of your offerings are most profitable and which should be revised to increase your profits. 4. Talk to an expert You don't have to have all the answers for your construction business, but you have to be willing to talk to people who have the information you need. Once you know your current situation and goals, speak to a construction accountant or financial expert to figure out your next steps. Experts can help you make sense of your financial situation and how to move forward—whether that's the best use of your profits or getting yourself out of a negative cash flow situation. They can offer you effective solutions you may not have considered or help you revise your plan, so it's more realistic. 5. Monitor your progress Throughout the year, take a look at your plan and projections to ensure you're still on track. If things are progressing as you expected, excellent. If not, explore how you can address the situation before financial problems become unmanageable. Final thoughts Creating a financial plan may feel overwhelming, but by having a clear picture of your goals, current situation, and progress, you can write an effective financial plan that increases your chances of success. Next week we'll do a deep dive into cash flow for your construction business. Reach out to me if you need help with building your construction business plan today.  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

    430: Five Key Points To Optimize Construction Sales And Profits

    Play Episode Listen Later Jul 30, 2021 9:01

    This Podcast Is Episode Number 430 And It's About Five Key Points To Optimize Construction Sales And Profits Owning a construction company and being an employee requires different mindsets and attitudes or paradigms. Both positions are natural enemies and generate tension, leading to various diseases; mental, physical, emotional, and spiritual.   Construction workers live in the real world, where everything can be seen, heard, felt, tasted, and sometimes smelled. They can look around and see evidence of their activities. Their long-term time horizon in years past was two weeks, which is why most payrolls are paid every two weeks. With various check cashing and payday loan outlets, their long-term time horizon has been replaced with now and right now!   However, construction company owners like you work in a world that is intangible and imaginary, where nothing is real or solid. Nothing in this part of their world can be perceived with any of your five senses: Sight, Sound, Feel, Taste or Smell. Your long-term time horizon is between 30 days and one year, depending on the size and complexity of your construction projects. You have to make hundreds if not a thousand decisions each day with whatever limited information is available to you. As a construction company owner, you have to decide on Marketing Strategies, Accounting Strategies, and Production Strategies, or as we call it, M.A.P. Vs. P.A.M. - the construction company owner's version of "Which Came First - The Chicken or the Egg?" Each decision you make carries a different weight, and the trick is knowing which ones to delegate and which ones to focus on. For example, the decision about what markets to pursue; Residential, Commercial, Industrial, has more weight and can impact your company more than which brand of toilet paper should be used in the office restroom. The decision on which market to pursue is only the beginning. Once the decision has been made on which market to follow, you have to decide which market subset: New, Remodel, or Service & Repair. Each strategy needs very different construction workers, Caveman, Cowboy, and Shoe Salesman. Put the wrong worker in the wrong environment, and you could see for yourself what happens when a Bull gets loose in a china shop, and it is not pretty! What gets measured gets managed. These five key points are an excellent way of gaining insight into where you are now and where you would like to take your construction business. As a construction company owner, if you could only do one thing all day long that would contribute the most value, what would it be? As a construction company owner, are you continuing to upgrade your management skill sets and grooming subordinates to replace yourself to grow sales and profits? Are you, as a construction company owner, letting go of the "Fun and Easy Low Paying Tasks"....and replacing them with the "Hard, Self-Discipline Tasks" that produce results? Let's identify your annual financial goal and divide it by 2,000 hours. If you want to take home $100K a year, your time at work is worth $50 per hour ($100,000 / 2,000 Hours = $50.00 an hour). It is crucial that you do the job you are worth. Do fewer things, get better and better at them, get more results, get good at doing the high-paying work, outsource, delegate, or ignore all else.  To paraphrase Stephen Covey from his book The Seven Habits of Highly Effective People. If you struggle with some of these concepts, you are not alone. We have helped a vast number of contractors to find clarity and overcome these obstacles and, in some cases, completely turned around their construction company and helped them reach their full potential. Final thoughts Just like all forms are easy to fill out if you have all the data in a readily usable format that is accessible, what you do as a contractor is "Easy To Do" if it is something you do all of the time. As QuickBooks experts in Contractors Accounting and Contractors Bookkeeping, paperwork is our particular skill set. We know what to do! Let us help you so you can do what you do best! 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    

    429: The Challenges Of Construction Business Partnership

    Play Episode Listen Later Jul 23, 2021 9:00

    This Podcast Is Episode Number 429, And It's About The Challenges Of Construction Business Partnership Randalism: A Partnership is the only ship designed to sink. However, we understand your preference, so I would like to talk about it in this blog post. Joint ventures are a bit like change orders. They can be an incredible opportunity to make or lose much money very quickly. Almost as quick as betting money on a roulette wheel in a casino. Joint Ventures have their own accounting rules. The devil is in the details. How costs and profits are shared among the participants depends on how the joint venture is structured and the terms of the agreement. Contractors with annual sales of less than $10,000,000 often get together to work on a specific project. They find a friendly competitor to supply labor and equipment for a percentage of the job, hourly fee, or a flat number. This could technically be a "Joint Venture"; however, the time and scope are generally short and sweet. For example, a concrete contractor may have a large project requiring more finishers than on staff. For many business owners, partnerships are an ideal way to run a business. Operating a company with a partner means you don't have to make all the decisions independently. It means you have someone there with you to help you carry the burden and share ideas with. That can be a great thing when it lasts. Unfortunately, many construction business partnerships fail. Although they fall for various reasons, some main factors contribute to a business partnership breakup. Here are three reasons business partners break up and steps you can take to prevent it from happening to you. 1. Unequal contributions All partnerships go through periods where one person contributes—their time, money, energy, or other resources—less than the others. That's normal. When it happens over a prolonged period or becomes a pattern, resentment can set in, and the other partners can begin to feel taken for granted. In some cases, a disparity in contributions is natural. However, these situations require a conversation to ensure that the inequality is addressed and made up for in other ways. For example, if one of the partners has a lot more money or time to invest. If one person has more money to contribute, can the other make it up by contributing more time? If one partner is in a stressful period—maybe they need to step back for a few months due to health issues—can they pick up the slack later so the other partner can take some time off? Make sure this discussion involves quantifiable amounts. You can't measure "work extra," but you can count "work an extra 6 hours a week for three months." Unequal contributions can be addressed and managed, but all partners need to talk about the situation and develop a reasonable and realistic plan for ensuring the disparity doesn't become an insurmountable problem. 2. Not hiring help Partnerships run into trouble when the people involved think they can handle every issue that comes their way, even if it falls outside their area of expertise. It doesn't matter how many people are involved in the partnership; if none of them are good with numbers, none should be doing the accounting. When people take on too many activities outside their expertise, problems arise. Mistakes get made, and people get blamed. Relationships can sour. Discuss with your partners your areas of expertise and activities that you aren't comfortable doing. Any tasks that no one has expertise in should be given to a professional so that each of you can focus on the areas you're good at and comfortable in. 3. Differing visions Business partners should have a shared vision for the company to work towards the same goals. It's okay for partners to have slightly different views on achieving those goals, but overall the vision should be aligned. Problems can take hold when partners have profoundly different visions for the company and meet their goals. Ensuring a shared vision is an important step. To do so: Make sure your company has a formal, written strategic plan. Work with your partners to write and review the plan periodically. Ensure everyone remains committed to the same vision and address any shifts in perspective that may have occurred. If you're about to start a business partnership, discuss with your partners why they want to run a construction business, their vision for the company, and their long-term goals. Make sure everyone is at least somewhat aligned. Final thoughts Business partnerships can be advantageous, but they also have the potential for issues. Open communication about your ability to contribute, your skill sets, and your vision will help your partnership stay on track and prevent a breakup.   Avoid errors, leave nothing to chance. Be sure you and the other party agree on how the income and expenses will be dealt with in your construction accounting systems before starting work. Implement processes and procedures to ensure the venture's activities are appropriately documented. 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    

    428: Managing Field Workers Effectively In Your Construction Business

    Play Episode Listen Later Jul 16, 2021 7:54

    This Podcast Is Episode Number 428, And It's About Managing Field Workers Effectively In Your Construction Business The construction manager is conditioned to avoid emergencies by being proactive. It is necessary to have systems in place to deal with emergencies when they arise. After the crisis has passed, the effective project manager evaluates the root cause of the trouble and implements change in the system to avoid a repeat performance. It's also one thing to manage workers when they're all in the same place at the same time. However, when you run a construction business with field workers, things can get a lot more challenging. Not only are you typically not on the same job site as them, but you might also have workers scattered over a variety of sites and projects.  Managing them doesn't just mean scheduling them and making sure they're progressing on the project, but also knowing how to shift people and equipment between sites to boost productivity. Here are three things you can do to manage field workers in your construction business effectively. 1. Be clear on your expectations One of the most challenging parts of having field workers is when people don't know their expectations. They might understand what their job is—and be perfectly capable of carrying it out—but less clear on their level of autonomy. For example, under what circumstances do they need to consult you versus making executive decisions on their own? Is there someone on each job site who acts as team lead, or are they all given the same level of authority? Who is the superintendent, if there is one? How frequently should they communicate with you about progress, and what information do you need? What are the milestones they need to meet, and when do they need to meet them? What are your responsibilities to the workers on the job site? Giving your field workers a clear idea of your expectations makes it easier for them to react to situations at the moment, rather than wondering if they need to contact you. It also provides them with a framework for carrying out their duties. Finally, it reassures them that there are expectations of you that you'll meet as well, such as ensuring they have the right tools for their jobs. 2. Upgrade your tools Many construction companies still use manual processes, such as telephone calls, to share information. These manual processes require you to review large volumes of paperwork and take up a lot of your time to keep up-to-date on what's going on. With multiple job sites, the task can become unmanageable. These days, various technologies and platforms can share information and communicate with field workers. You can send tasks to field workers, ask them to capture data, and share virtual paperwork in real-time. The information is shared much more quickly and efficiently and reduces the risk of missing paperwork and other errors. It also provides you with a complete audit trail, so you have proof of your construction company's activities if there are ever any questions. 3. Engage workers One of the best things you can do to manage field workers is to ensure they all know they are part of the team and feel appreciated by you. This means being clear in your expectations but also allowing them to offer feedback. Find out how you can support them. Provide group activities where the different teams are brought together to interact with each other and get to know one another. Visit the job sites. You may sometimes have to check in to evaluate how things are going, but drop in periodically to check in with them without being there to review their performance. Ask what's going well and what could use improvement. Listen to your field workers and if their suggestions are reasonable, consider implementing them. After all, they're the ones in the field. Final thoughts As the head of your business, or if you are the construction manager, understand that a crucial part of what you do is to remove obstacles and temptations that keep your employers from peak performance, run interference for them when they mess up, and make sure they get recognition and credit when the project goes well.  Managing field workers can be complicated, especially if you have numerous teams at different locations. Being clear about your expectations, using the right tools, and engaging your workers will help you more effectively manage them. 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

    427: Consequences Of Avoiding Your Construction Bookkeeping

    Play Episode Listen Later Jul 9, 2021 7:55

    This Podcast Is Episode Number 427, And It's About Consequences Of Avoiding Your Construction Bookkeeping 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 bookkeeping.     1. You'll make poor decisions   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 decisions.     2. You'll make financial mistakes   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 money   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 use.    Those payments add up and affect your overall financial position.    Final thoughts 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 contracting business.  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 at our: Fast Easy Accounting Store (Bookkeeping Set Up and Cost Codes Templates only - does not apply to Consultation/Training/Outsource Accounting), and Construction Accounting Academy (any class or Monthly Subscription) 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

    426: Construction Business Mid-Year Reminder For Setting And Reviewing Goals

    Play Episode Listen Later Jul 2, 2021 10:03

    This Podcast Is Episode Number 426, And It's About Construction Business Mid-Year Reminder For Setting And Reviewing Goals How are you and your construction business? Have you considered what you'd like to achieve in the coming twelve to eighteen months? Or maybe your set of priorities for the next half of 2021?   Contractors like you are typically highly creative and optimistic; thus, you often have difficulty narrowing down your ideas from among all the exciting possibilities, whether it's an opportunity to expand to a new market or choose a better time management strategy.    While some of you love planning, others feel overwhelmed by the process. So how do you decide on just a handful of goals that take priority, with so many moving parts that make up a construction business?   1. Set SMART Goals Focus your efforts and increase your chances of achieving your goals by the SMART guideline: Specific, Measurable, Achievable (Attainable), Realistic, and Time-Bound. Start by defining your top three business goals for the next four quarters. Then, with those in mind, do some research to help you decide on the best way to achieve those three goals – and a reasonable timeline for meeting specific targets.  2. Redefine Your Brand Is the elevator pitch you used a year ago – even six months ago – still accurate? Unless you are crystal clear on who you are as a construction company, whom you're here to serve, and what you hope to achieve in the next one to three years, it's going to be hard to come up with meaningful goals. Getting leads and doing the work is only part of the answer. Not answering them and acting on the knowledge is one reason why so many contractors' companies wither and die. They focus on the wrong areas to innovate or improve. They focus on the wrong enemy and threat. As a result, they miss what they could be doing to succeed and prosper over time. Take a look at your company vision, mission statement, and core values. Next, define the contracting you offer and who your competition is. It may not be the same form, structure, and category that you operate. For example, Home Depot does not see itself as competing in the building supply business but for a share of the home and commercial remodel and repair market. Instead, be that homeowner doing a weekend project, Handyman Contractors, Remodel Contractors, Trade Contractors, and other contractors and House Builders. If your brand needs tweaking to reflect where your construction business is today and where you want it to go, start there. Then you can move on to setting some beneficial long and short-term goals. 3. Big Picture Planning Construction business owners dream big—and they should! Thinking big can lead to groundbreaking products and services that become the foundation of innovative, successful companies. When it comes to goal-setting, thinking big is great, too. But to make those big ideas like "increasing market share" or "growing profits" happen, you need to break them down into smaller, specific goals and strategies tied to a budget and timeline. For instance, while your overarching objective may be to "grow profits by 50% by December 31", your smaller goals might include: Launching a social media campaign the first week of March to attract 2,500 new prospects by months' end; or Increasing total sales by 40% by establishing an online presence (Business Website) by August 1.  Again, the key is to define goals that are measurable and achievable. 4. Define Smaller Goals Thinking through how you'll achieve your broader objectives can be a fun exercise – one you can turn into a group activity, including your entire team. First, sit down and discuss what you know about your customers. Next, review your historical sales data and look over your current budget and forecasting.  With all the relevant information at hand and everyone at the table, you can develop strategies that align with your construction company vision, assign deadlines, and get buy-in on what everyone needs to do to see your ideas through to completion. It is easy to get caught up in the short term and what you have today. You measure your share in the particular segment you operate in and obsess about your immediate competition just as contractors who did not market effectively did years ago. But you need to step back and ask yourself the three key questions and make sure you answer them in a way that will define and liberate your construction company at the same time. What are you offering? Who is your competition? What is your actual competency? Final thoughts It's worthwhile to take some time to reflect on your personal goals as you think through your business goals. For example, maybe you've wanted to get involved in mentoring, improve your networking skills, or attend more conferences. Self-development is, in a sense, professional development – and vice versa, so include them in your plans. Of course, coming up with business goals is just one part of the equation. You'll also need to monitor your progress, note milestones, and share your company achievements with your team regularly. Tracking your results will help your employees stay motivated – and it also gives you the chance to adjust your goals and strategies in time to achieve the best possible results by year's end. Happy 4th of July! Use promo code: 30FEA for a 30% discount (from today until July 11, 2021) upon checkout at our: Fast Easy Accounting Store (Bookkeeping Set Up and Cost Codes Templates only - does not apply to Consultation/Training/Outsource Accounting), and Construction Accounting Academy (any class or Monthly Subscription) 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  

    425: A Construction Company Owner's Guide To Hiring Employees

    Play Episode Listen Later Jun 25, 2021 10:04

    This Podcast Is Episode Number 425, And It's About Digital Disaster Recovery For Your Construction Company Hiring or not hiring employees is one of the few optional things the business owner chooses, changes their mind, or changes direction as needed. With so much discussion about employees, payroll, and payroll taxes, you may feel that you miss out on not hiring many employees. The reality is that as a small business owner, you do not have to hire employees. The two extremes in any business are "Too Many People" (with many looking busy) and "Too Few" (a handful are overloaded). An example of Too Many People is for a midsized firm having everyone with access to the accounting. I mean everyone from the "Shop Guy," Warehouse, Outside Salesman to Accounting Staff. Depending on the size of the construction business, this might be necessary. However, for most companies letting everyone have access to the balance in the company checkbook creates "White Noise" and causes friction. "The company is making all this money" – I am justified in being lazy, stealing (time or material) services. Lots of time spent standing around with a coffee cup in hand being too crucial to doing the work they were hired to do. That leads us to... Hiring Toxic Personalities Businesses hire more staff as they grow. But if they expand too quickly, they will feel pressure to fill positions on their team, even if the job candidates have a few personality flaws. While some people change, others don't, and a few toxic personalities will poison your company culture. This is why controlling growth is so important. Though it is hard to predict, you can create a game plan when you exceed your projections. Building a team of healthy personalities is another priority. If you don't, toxic employees will look for coworkers with similar values. If they can't find them, they will try to hire them! But what personalities should your company avoid? There are many, but micromanagers are one of the most common. Instead of letting their coworkers do their jobs, they bug them over minor details, sabotaging team goals. Project Managers do manipulate emotions as part of their job, but some abuse this power. For example, they will try to ruin people with gossip, or tell bosses what they want to hear, even when they know it is terrible advice. Instead, always look for team members that value their coworkers and employer, and have enough emotional maturity to find and fix their weaknesses. They will become better team members over time and face problems even when they feel uncomfortable. Hire the right person and create a balance Too many cooks in the kitchen. We have all experienced this on holiday events. Multiple people who are used to doing things their way are all working in the same kitchen. Is everyone working together seamlessly to get the meal ready? Depending on the dynamics, the answer is Maybe Yes, Maybe No. Does everyone know:  What needs to be done? Who should do it? Can it be delegated? Is the task time-sensitive? The same can be true in your business. There are too many jobs and not enough time for a single person to do everything. Yet, everything needs to get done. But what, in what order, and by whom? Very few employees will work with the dedication of an owner. Why? Because at the end of the day, they are not the owner. They do not have a vested interest of an owner. Flipside, I have seen owners delegate everything to the employees. Seagull Management! Attitude is "Make Me Rich," I'm doing more important things, "Goofing Off." Hint – this could lead to lots of theft. I attended a conference where one of the speakers explained that as the company grew, she needed to delegate. Too Many Hats. She discovered that as a business owner, the hats were added one at a time until it felt like she was a juggler at the circus trying to keep all the balls in the air. Sound familiar? What she discovered was that employees were unwilling to put in the same number of hours and efficiency. They didn't have the same priorities. So as she sorted out the jobs – she discovered it took three people to do the bulk of what she had been doing. After all the delegating, she still had plenty of stuff deemed urgent, essential, and necessary that only she could do. But, unfortunately, not many people can afford to hire a professional business manager to handle all business and personal matters. In conclusion Don't add staff just to have staff. Employees are expensive. In Washington State, it is mandatory to offer Family Leave and PTO. Family Leave is similar to State Unemployment which is calculated on gross wages paid. PTO (personal time off) is at a rate of 1 hour per every 40 worked. The employee can use the time off anytime they want – no notice given) Other benefits may include paid vacation and holidays. Suggestion: Embrace good accounting software. We recommend QuickBooks Desktop. Do not let everyone in the books. Business Coaches and Tax Accountants need reports to help you. Opinion: Let Them Look – Don't Touch and Don't Help. Their view is not the only view and usually tied to the software they use. In other words – they usually roll up the numbers. You want to be able to drill down (expand the numbers). Good Construction Accounting Setup provides reports for everyone. Final thought: Limit Access to the checkbook. It is harder for employee theft if outsiders can not see or touch the money. If you're looking to hire a construction bookkeeper, this guide might be able to help you narrow down your options. 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

    424: Five Ways To Make The Most Of Your Construction Business Downtime

    Play Episode Listen Later Jun 18, 2021 8:04

    This Podcast Is Episode Number 424, And It's About Five Ways To Make The Most Of Your Construction Business Downtime Every business experiences slow periods when the market for their goods or services lessens and sales drop. Construction business owners like you might be tempted to view downtimes as unproductive or wasted, but there are ways you can make the most of your business during these seasons. Here are five ways to ensure this time isn't wasted: 1. Take a good look at your business When things are busy, it gets easy to fall into a habit of taking care of day-to-day tasks and forgetting your overall business picture. However, slower times are an excellent opportunity to step back from the daily grind and ask yourself if your business is still moving towards its goals, what opportunities or challenges are on the horizon, and whether it's time to try something new. Examine various aspects of your construction business, such as your marketing and sales, to see if they're all working together or if they need revising. Is your social media account information still accurate? Do you have unanswered emails to respond to? When was the last time you posted on your blog? Should your website be updated? This is a great time to take care of those tasks that have been put off for far too long. 2. Get bold with your marketing When business is booming, entrepreneurs often prioritize tasks directly related to profits, and other activities—such as marketing—take a back seat. Rather than using downtimes to catch up, use them for experimenting with new tactics. Have you tried creating marketing videos or used Instagram Live? Have you sent out direct mail? Write a blog and social media posts ahead of time. Strategize your next marketing campaign and commit to posting on social media every day. If you have time, build up a backlog of posts to have pre-written content when things get busy again. You can also use this time to learn tactics and tricks you may not fully understand. For example, if you like writing your marketing materials but don't understand search engine optimization (SEO) or Google Analytics, this is an opportune time to learn about them. Again, professional development now can help you in the future. 3. Implement new policies and procedures If you want to make changes in your business, slower times are often a great opportunity to try them. That way, you have the chance to review the modifications and whether they work well for you before they cause a massive headache. Are you considering a new web hosting service? Are you looking to automate some client-facing activities? Make these changes during a slow period to get a good feel for how well they work. At least then you can address challenges that arise before things get busy and you're left dealing with many upset customers. 4. Harness the power of learning Knowledge leads to profits and cash flow. What makes knowledge powerful? Use of knowledge. In this cutthroat construction industry, you may not be able to outgrow your competition forever, but you can always outlearn them.  Gain insight from a free consultation with me or enroll in one of our Construction Accounting Academy courses. Master the skills needed to generate useful reports, repeat quality performances, and make informed decisions to operate and grow your construction company. Click here for the list of classes.  5. Connect with your community Quieter periods are a perfect time to get more involved with your community and do some good. Find a local organization that you care about—or related to your business's work—and partner with them. For example, you could sponsor an event or a seminar or even run a fundraising drive. Not only will you have something to talk about on your social media, but you'll also engage customers that care about purchasing from companies that do good. These days, that's important to many consumers. According to Forbes, 88% of consumers will be more loyal to a company that supports social or environmental issues, and 87% will have a more positive image of a company that supports social or environmental issues. Final thoughts Remember that business won't always be slow, so don't panic when things get quiet. Instead, take the opportunity to reflect on your business, make necessary changes, try new marketing tactics, advance through learning, and connect with your community. Doing so can help you make the most of your downtime so your construction business can rebound more effectively. 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

    423: Rebuilding Trust After A Negative Online Review

    Play Episode Listen Later Jun 11, 2021 7:03

    This Podcast Is Episode Number 423, And It's About Rebuilding Trust After A Negative Online Review Online reviews are an essential marketing tool for many small businesses, especially for service-based businesses like yours. They give potential customers and clients a chance to see how effective your goods or services are, how responsive you are to your clients, and what other people's experiences of your business have been. As a result, the vast majority of people check online reviews before making a purchasing decision.   When reviews are great, that's a fantastic thing. But, unfortunately, it's when you get negative reviews that you have to adjust. You can't please all customers all the time.   Here's the thing: a negative review can actually be positive for your business. So how do you rebuild trust after a client has vented their frustrations online? 1. Leave the negative review up.   A negative review doesn't have to be the end of the world. Although customers like to see five-star reviews, they understand that perfection is almost impossible—and probably a sign that something is "too good to be true." In that sense, having a customer or two provide negative feedback gives more credibility to the positive reviews. Customers expect to see a couple of negative reviews. As long as they're in amongst positive feedback, the negatives likely won't hurt you much and may even increase your legitimacy if they're handled well.   2. Respond to the review honestly. Customer complaints are a way for you to build trust with your potential clients by allowing you to respond honestly and professionally. Did something go wrong that was out of your hands? Offer an apology and explain what happened. Was there a misunderstanding? Take the opportunity to clear it up. Has the reviewer requested additional information or a solution? Respond online to show what you've done to address the situation. Did the reviewer misunderstand a policy? Explain your policy and invite them to contact you if they have further questions. Doing so shows readers that you take their concerns seriously and are willing to take responsibility when things go wrong. 3. Learn from negative reviews.   If you see the same concerns repeatedly in the online feedback, it may be time to review your services. Negative reviews give you insight into areas where your customers feel your business could make changes, so take the time to consider what you're being told. For example, it may be that you can improve on your offerings, or you need to communicate better with clients to manage their expectations.    Thank them for their feedback, let them know you're taking their concerns seriously, and explain what your next steps will be.     Final thoughts   Don't panic. A bad review or two isn't likely to ruin your reputation. On the contrary, a few negative reviews can help you gain trust with potential clients. In addition, you can use the situation to build confidence in your business by being responsive, transparent, and honest. Many prospective customers will look past a few negative reviews if you have more favorable ones. So make sure you are consistent in providing quality services and encourage happy clients to post a good business review.   If possible, make sure your responses include an apology, a statement about your commitment to your clients, and a way to continue the conversation offline if further communication is needed. Doing so will show potential customers and clients that you care about their feedback and are willing to take responsibility, but it also allows you to move the conversation to a more private forum if the reviewer isn't happy with your response.  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  

    422: The Art Of Selling Your Construction Services Effectively

    Play Episode Listen Later Jun 4, 2021 10:04

    This Podcast Is Episode Number 422, And It's About Digital Disaster Recovery For Your Construction Company Sales are about addressing your customers' needs and problems. By understanding the issues clients face, you can show them how your service solves their problems.  Here are some tips for asking the right sales questions to better understand and help your customers.  1. Don't jump into sales questions right away. Sales aren't just about making a sale, although that's certainly part of it. Instead, sales are about building relationships. That's how you make a sale today and encourage repeat business tomorrow.  When you start asking questions, don't begin by asking questions about the sale specifically. Instead, ask questions that develop a relationship and give you a chance to get to know the client better.  For example, ask questions about their long- and short-term goals. After that, move into questions about the issues they face and what solutions they currently use. Then, find out what does and does not work about those solutions. That will help you understand your potential customer, which allows you to meet their needs right now and anticipate future needs. 2. Ask open-ended questions Open-ended questions will get you the answers you need to help you offer a solution. Closed-ended questions will only frustrate you and provide you with no additional information. For example, don't ask: Is budget a consideration? "Yes" or "no" answers won't help you here because even if they say "no," what they could mean is "no, but within limits," which really means "yes."     Instead, ask, "What sort of a budget are you looking at spending?" The customer will likely give you a range and may even talk about similar past purchases or related products they are considering. Then you have a reference to frame your solution.    3. Listen to their answers   Once you've asked a question, really listen to their answer. Focus on understanding their needs and addressing them. Then, talk about how your service addresses the issue of their problem. Once you've done that, you can go into the additional benefits your product or solution offers.    Be careful not to run through a list of robotic, pre-programmed questions, either. Often, something a prospect says leaves room for further exploration. Take the opportunity to ask follow-up questions, not push your way through a list of pre-arranged queries.   Condition Yourself For Success Be-Do-Have: Be The Person, Do The Work, Have The Results. - Randalism In life, contractors produce reasons or results and, reasons don't count. Over the years, we have experienced success and failure in construction. Success comes whenever I have engaged mentors that are where I want to be. Failure always comes from engaging people who cannot produce results but think they can. To get to the truth about your construction company, you must go on a journey. It is four levels deep, and like most successes in life, it is simple but not easy.  A Story To Illustrate The Four Levels Of Truth What Contractors Want To Hear - One evening after work, a group of contractors met at the Contractor Business Round Table, the neighborhood tavern with a round table, pitcher of beer, and four contractors. They talked about how tough it is to get profitable jobs no matter what the economy is like. When times are good, it is hard to find employees; when times are tough, the phone doesn't ring. Everyone agreed there was nothing anyone could do about it. What Contractors Want To Believe - A short while later, they talked about making money and agreed that big contractors make most of the money, and little contractors were doomed to struggle. Everything Else - One of the contractors suggested maybe they could ask one of the larger, more profitable contractors and determine what they did that made the difference. This, of course, made the other contractors a bit uncomfortable. Then it happened, and they all heard and felt the dreaded Snap-Crackle-Pop! The contractor who suggested asking for help experienced a paradigm shift and broke through to the other side. This contractor began leveling up! Suddenly they all remembered what that The Contractors Accountant, Randal DeHart, had said about leveling up. "As you develop your Business Strategy, your income is likely to increase. The impact on your friends will not be pleasant as you will be proving that good people can win in the construction game by playing it with high moral and ethical standards and the willingness to try something different." Truth - Is whatever you believe, and you will look for evidence to support your truth. Part of our truth comes from some of the writings of Og Mandino, and hopefully, you will find value in this one as well: The Salesman’s Prayer Oh creator of all things help me for this day I go into the world naked and alone, and without your hand to guide me I will wander far from the path which leads to success and happiness. I ask not for garments or gold or even opportunities equal to my ability; instead guide me that I may acquire ability equal to my opportunities. You have taught the lion and eagle to hunt and prosper with teeth and claw. Teach me how to hunt with words and prosper with love so that I may be a lion among men and an eagle in the marketplace. Help me to remain humble through obstacles and failures yet hide not from mine eyes the prize that will come with victory. Assign me tasks to which other have failed, yet guide me to pluck the seeds of success from their failures. Confront me with fears that will temper my Spirit yet endow me with courage to laugh at my misgivings. Spare me sufficient days to reach my goals; yet help me to live this day as though it be my last. Guide me in my words that they may bear fruit; yet silence me from gossip that none be maligned. Discipline me in the habit of trying and trying again yet show me the way to make use of the Law of Averages. Favor me with alertness to recognize opportunity, yet endow me with patience which will concentrate my strength. Bathe me in good habits that the bad ones may drown; yet grant me compassion for weakness in others. Suffer me to know that all things shall pass; yet help me to count my blessings of today. Expose me to hate so it not be a stranger; yet fill my cup with love to turn strangers into friends. But all these things be only if thy will; I am a small and lonely grape clutching the vine, yet thou hast made me different from all others. Verily there must be a special place for me. Guide me, help me, show me the way to become all you planned for me when my seed was planted and selected by you to sprout in the vineyard of the world. Help this humble salesman, guide me God. - The Greatest Salesman in the World by Og Mandino Final thoughts Asking questions is vital to get valuable information from prospective clients by helping you understand their needs, priorities, and problems. By showing customers, you can listen to them and understand their needs; you build an important connection with them to provide them solutions. That connection may also be what keeps them coming back to your contracting business. That's how you build valuable relationships with clients. Got a question? Let's talk. 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

    421: Digital Disaster Recovery For Your Construction Company

    Play Episode Listen Later May 28, 2021 9:30

    This Podcast Is Episode Number 420, And It's About Digital Disaster Recovery For Your Construction Company Emergencies can happen in the blink of an eye. Gmail, Yahoo, MSN, and social media are all in the cloud. When disaster strikes, flood, fire, theft, earthquake, or a lousy bookkeeper deliberately destroying business records or computer crash, you are protected against data loss by these online programs. Buy another computer, set it up, and you are back in business.   What about your bookkeeping records? Your customer list? Who owes you money? Who you owe money to? Payroll? Employee advances and loans?   Job deposits, sales tax reports due, the list goes on. You never realize how much you depend on your Construction Accounting System until it is gone forever!   What about your contracts, bids, other hard copies of documents you use to operate and grow your construction company?   When you run your own contracting or trade business, your life involves many long days being on job sites while managing projects, staff, and clients. There probably are not enough hours in the week for you to deal with all the issues that arise while keeping your customers happy, and taking time out of your schedule to manage your business is probably the last thing you want to do. Thanks to a variety of online software companies, running your business is now a lot easier. You can efficiently manage your projects, employees, finances, and records through your computer or tablet, freeing you up to focus on your clients.  With the following recommendations, even when a digital disaster strikes, your accounting data is secure because it is backed up daily on remote servers, which means, again, buying another computer, setting it up, and being back in business. Get a subscription to Box or DropBox and regularly scan important documents and store them there. It will take some effort to set up a file structure and maintain it, but it will be worth it when you lose your work or personal computer. Xero Unless you're an accountant, anything to do with finances probably isn't on your list of fun activities. You don't want to spend your time writing up invoices and chasing down clients for payment or tracking and reviewing your expenses. Instead, you want your energy to go to an exciting project or finding a solution to a client's problems. Xero lets you do just that. It offers a user-friendly invoicing system that allows you to accept payments through the software. In addition, you can connect Xero to your bank account, so transactions are imported to your Xero account daily, meaning you don't have to enter them manually. You can even manage your inventory and conduct bank reconciliation through the program. All those stressful accounting tasks are taken care of with minimal effort from you. You can review reports from home after hours. You can work on a Bid, Estimate, Change Order You can check your payables and pay bills If there is a problem – much easier to take proactive action and Lock The File Down. QuickBooks Desktop In The Cloud How much of your time do you spend hunting down financial documents, poring over spreadsheets, and tracking expenses? Searching for and trying to integrate scattered data makes it nearly impossible to quickly and efficiently close out the monthly books. Manage your business finances faster and more accurately by moving them to the cloud. QuickBooks Desktop In The Cloud has several benefits, including: Integration with all your other construction operational systems for the quick retrieval of the most current data; Automation of daily financial processes so you can step away from spreadsheets; Efficient expense tracking that improves accuracy and reduces revenue leakage; and Secure collaboration with team members and stakeholders. Why do I like using Cloud-Based Servers? For all the same reasons, every Contractor has web access to their bank is to see "The Numbers!" Money In: Have my Deposits posted and cleared?  Money Out: What checks have cleared? What's Left Over: How much money is in The Bank? Most business owners like you find that working regular hours of 9 to 5 is not realistic. Being a contractor, your hours are dictated by your prospects, customers, and clients' needs. This means as a Contractor, you may be creating an estimate, proposal, invoice, paying bills, or making an electronic deposit to your bank before 9:00 AM or after 5:00 PM (Monday - Friday). You are working in the early mornings, evenings, weekends before breakfast or after dinner, on Saturdays or Sundays. Usually, some time is devoted to business when you are on vacation. Challenges for contractors with staff can be solved with QuickBooks Desktop In The Cloud: You can review reports from home after hours. You can work on a Bid, Estimate, Change Order You can check your payables and pay bills If there is a problem – much easier to take proactive action and Lock The File Down.  Backing up essential documents on a separate hard drive is necessary, whether you're using cloud computing or not. But in the case of a natural disaster that denies you access to your premises, QuickBooks Desktop In The Cloud can be advantageous. Final thoughts Because you can access your documents anywhere, there's an Internet connection; cloud computing can be vital to ensure business continuity. The last thing on your mind is packing up your business records and computer. Accessing our cloud server is available to outsource and do-it-yourself clients. 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  

    420: Optimizing Your Construction Business Website For Local Searches

    Play Episode Listen Later May 21, 2021 8:29

    This Podcast Is Episode Number 420, And It's About Optimizing Your Construction Business Website for Local Searches   For most construction businesses, increasing sales during this time will be very beneficial and may provide some much-needed cash flow relief.    Local search engine optimization (SEO) is an integral part of any online marketing strategy for traditional businesses which serve a specific geographical area.   Local SEO works in much the same way as standard SEO, although some significant differences are considered. Taking the time and trouble to optimize your website for local is essential since about a fifth of desktop queries and more than half of mobile searches have local intent.    To capitalize on this fact, you'll need to make sure that your website appears in local searches. Fortunately, local SEO is somewhat more straightforward than regular SEO, which is significant because it is less competitive.   The first step to optimize for local searches is to include your regional keywords, such as the name of your town or city or any other areas which your business services, in the following areas of your website: Your website URLs (particularly for landing pages) Page titles  Meta titles and descriptions  h1 and h2 HTML heading tags Throughout the content of your site, provided it is relevant and done sparingly Any local business should also have a footer that appears on every page of their website. The footer should contain your address, postal code, and phone number. All information must be identical to any other online listings you have either on social networks or local directories. You should also provide a link to your Google Local listing. Another critical element of local SEO is to have appropriate landing pages. Your landing pages should include keywords and phrases referring to your business's location or service area - be careful not to overdo it since Google will penalize sites for over-optimization.  Construction businesses with multiple service areas should ideally have separate landing pages for each one so that people will still find you in Google when carrying out local searches. Each of your landing pages should provide relevant content, including information specific to the particular service area it applies to. Other Online Resources for Local SEO   Optimizing your website is only one part of the local SEO process. There are many other critical online resources which businesses should use to increase traffic and raise awareness. The most important ones, which any local company should use, include the following: Google My Business (GMB). It is a free tool that allows you to promote your business profile and business website on Google Search and Maps. Even if you don't have your website, the most crucial resource for local businesses is GMB. Claiming and verifying your business's listing on GMB will help enormously in your efforts to appear in local search results. Bing Places. Microsoft's version of GMB might not be as popular, but it is still too important to ignore. It works in much the same way, allowing you to claim and verify your business's physical location and have it appear in Bing Maps and on mobile devices running the Windows Phone operating system. Yelp. Yelp is an online urban guide providing local business listings. Yelp recently replaced the relatively unsuccessful Apple Maps app for iPhones and iPads, and these devices now use data from Yelp to display local information with their included mapping apps. Given the enormous popularity of iPhones, the advantages of getting listed on Yelp should be obvious. Foursquare. The number one location-based social media website, Foursquare, allows users to find local businesses quickly and 'check in' to specific locations. Setting up a profile on Foursquare is a quick and straightforward process that will also help you in your local SEO efforts. Local SEO is mainly about getting listed in local online resources and optimizing your online content both on your website and other platforms, in such a way that it makes references to location-relevant key phrases and regional names rather than using generic keywords.  Your construction business listing must be entirely consistent across all of the platforms you use, particularly since it won't be easy or practical to change them later on. (Related Blog post here) Final thoughts Everyone is trying to get more value for the money they spent in their business. Invest your marketing dollars wisely by optimizing your website to appear first on the local search engine page. 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  

    419: Becoming A Better Construction Manager By Developing Accountability

    Play Episode Listen Later May 14, 2021 7:50

    This Podcast Is Episode Number 419, And It's About Becoming A Better Construction Manager By Developing Accountability The success of any business, large or small, depends considerably on nurturing an efficient, productive workplace.   While improving employee productivity should always be a priority when the ultimate goal is a sustainable and profitable business, the process is easier said than done.   Being a better construction business owner is not just about the habits you practice in front of others. It is often about the habits you practice behind closed doors that make you an easy person to follow.   Whether you work alone or managing a group of people, practicing accountability matters. Accountability is a touchy subject that can make many people feel uncomfortable, but it protects you as a leader and can exponentially increase the level of influence you have over a corporation or group of followers.    Here are a few ways you can develop the kind of accountability that makes you a better construction manager. Set clear expectations for yourself As a business owner, you need to have a clear set of expectations of what you will do and what you will never do. This can go for your personal life as well as your professional life. If you are going to be an accountable person, you need to know what you are responsible for in no uncertain terms. Establish an accountability partner Establishing an accountability partner is as simple as finding a person you trust, telling them the expectations you have placed on yourself, and asking them to follow up with you regularly to ensure you haven't lowered your standards. In finance, it is imperative to have someone you are accountable to.  Countless construction companies each year get in legal trouble for laundering funds or evading taxes; when you are the project manager and provided with access to company finances, make sure there is someone within your organization that goes behind you to check invoices and balances, this could save you a massive headache in the long run. Establish a board of directors (or an accountability group) Depending on the size of your business, your board of directors could be employees that are on the payroll, or it could be friends and family members that volunteer as advisers.  Your board of directors needs to have at least a moderate amount of business sense, and they need to be easy to reach in crisis. Should you ever find yourself in the position of making a big decision quickly, you will need to access your board of directors to either obtain their permission to act or discuss alternative courses of action. An accountability group can help you strategize for future growth and set goals that move your business forward. Most importantly, checking in with other people regularly to report on your progress makes it much more likely that you'll take action and get things done. Allow the people you lead to question you Allowing employees to question your methods does not mean you are allowing them to question your authority. If you have an employee that is feeling uncertain about a leadership practice or division in your company, you should establish an open-door policy and allow them to ask difficult questions.  It is okay for specific issues to remain private, but use your best judgment to determine how to respond to their questions and be as open and honest as possible. Hold yourself to the same standard you hold others to As a business owner, you likely invest in a particular security or monitoring service. It is essential that you adhere to the same policies and procedures others are expected to.  Suppose your building has a strict internet security policy; set your work computer up with the same internet permissions as others. If you regularly monitor employee chats, make your conversations public record. Anything that needs to be discussed privately should be consulted on paper or in-person to avoid legal trouble and confusion.  Final thoughts As intimidating as developing accountability looks from the outside, it is a precious asset that no business manager can afford to be without.  Accountability can protect you from legal backlash and disgruntled employees. When you make an effort to be the same leader behind closed doors as you are in front of those you are leading, they will know you are a trustworthy person who is worth following. As always, you don't have to go through these alone. Whether it's about construction accounting or accountability - 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

    418: Steps Construction Company Owners Can Take To Avoid Employee Fraud

    Play Episode Listen Later May 7, 2021 11:09

    This Podcast Is Episode Number 418, And It's About Steps Construction Company Owners Can Take To Avoid Employee Fraud Billing schemes. Skimming. Check-tampering. Employee fraud is a real risk for businesses with fewer than 100 employees. In fact, according to the Association of Certified Fraud Examiners, small businesses lose almost twice as much per scheme to occupational fraud. If you Google Search "Construction Bookkeeper Embezzlement," you will see thousands of hits, and most of the problems construction companies suffered could have been avoided if the owner had known about and followed a few simple guidelines. Unfortunately, until a contractor has gotten to know us, they tend to think of us as just another contractor's bookkeeping service. This means some contractors think we are crazy to suggest that any trusted employee, especially an in-house bookkeeper, would steal money from their company, and so they ignore us until it was too late. Be aware of the "Employee Theft 10-10-80" Rule Discovered over many years of experience and first-hand observation by auditors, accountants, fraud examiners, anyone involved in detecting employee theft. Ten Percent - Of all employees, including bookkeepers, will steal in a variety of ways from office supplies, petty cash, graft, kickbacks, and payoffs from your suppliers, vendors and sub-contractors and even hundreds of thousands or even millions of dollars. They will do it regardless of how many security systems are in place because they lack integrity and have a "taker's" entitlement paradigm that states: "It Is Better To Take Than To Make." They cannot be stopped, only caught! And only then if you have systems in place and if you can convince the criminal justice system to take action, good luck with that! Ten Percent - Of all employees, including bookkeepers, will never steal because they have integrity and a "Producer's" paradigm that states: "It Is Better To Make Than To Take." In the end, these are the people who will add so much value to your company you cannot help but reward them with more money, benefits, and recognition. Because if you do not, they will be recruited by your competitors.  Eighty Percent - Of all employees, including bookkeepers, will steal if they feel confident they can get away with it and if circumstances allow for it due to weak integrity and a sense of "Redistributing The Wealth, But Not The Work Or The Responsibility." Recognize the most common signs of fraudulent activity before an unscrupulous employee destroys your construction business: Identify high-risk employees When an employee has something to hide, their behavior may become suspicious; they may act closed off, secretive and defensive. A typical clue is a worker who won't take time off for a holiday (because someone may take over their duties and discover the fraud). Others will try to cover up their improved financial status - a new car or home, for instance - with tales of a lottery win or inheritance. In addition to employees acting suspiciously, high-risk employees might also include those: struggling with debt dealing with mounting bills because of unfortunate circumstances (e.g., divorce, a family member's poor health) with a history of drug abuse  involved in risky financial ventures (e.g., gambling, investments)  If an employee has a motive for fraudulent activity at work, think of the following behaviors as red flags. Access and opportunity Unsurprisingly, the highest risk employees for fraud have trusted roles in financial services: Accounts Payable, Accounts Receivable, accounting, and bookkeeping. To commit fraud, or in this case, embezzlement, an employee must have both access and opportunity - that is, access to funds, banking records, and accounting data. The ideal situation is someone entrusted with performing multiple roles; that is, they can both cut and sign checks, process AP, and handle bank reconciliations. Unmanaged Control Access is just one part of the equation when it comes to employee fraud. Also, keep a watchful eye on employees who exert control over certain aspects of their job.  For instance, they may insist on: working unnecessarily long hours  working outside of regular business hours performing specific job duties and refusing to share individual tasks only dealing with a particular supplier or vendor* * A common employee scam is known as "purchasing fraud" when a supplier or vendor inflates an invoice amount, the employee cuts a check, and both parties split the difference. Red flag scenarios Monitor your financial records closely, and investigate if you come across the following discrepancies: Mismatched payees: the name on a cashed check doesn't match the name entered in the general ledger Identical payments:  two checks have cleared for the same amount to different vendors in the same date range; one may have been authorized on the strength of supporting documentation for the legitimate payment.  Questionable companies: a supplier or vendor with unprofessional invoices (i.e., apparent errors, a missing or incorrect address, home address, or non-existent web presence) Construction Bookkeeping Embezzlement Bad Bookkeepers will leave you with unfiled and unpaid taxes. They come in every race, creed, color, gender, age. There is no definitive profile, no absolute way to know which contractor bookkeeper is an embezzler until they have been caught and convicted, and even then, if you do not perform extensive background checks, you may never know it until it is too late. Just because you catch a bookkeeper embezzling funds, don't think for one minute they will always be punished and made to pay you back. For the most part, you must understand that employees are poor innocent victims of brutal greedy business owners in the eyes of the public. I have seen bad bookkeepers ruin too many businesses, especially construction businesses. In most cases, it was Bookkeeper Incompetence or Bookkeeper Embezzlement, and in other cases, it appears to me there may have been some deliberate identity theft; however, I cannot be certain. All I know for sure is that I have witnessed business failures that have led to divorce, families destroyed, finances wiped out, and people living on the streets. In a few extreme cases, I know of contractors who have taken their own lives, and this needs to stop! Final thoughts Now that you know how to spot the most common warning signs for employee fraud, your management team must take steps to combat it. Let this post be a reminder to watch for suspicious employee behavior. Segregate financial roles, so no one has unlimited access, control, or opportunity - and ensure your bookkeeping is always up to date so any "red flag" scenarios can be dealt with promptly. 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

    417: Winning Tactics For Contractor Paperwork

    Play Episode Listen Later Apr 30, 2021 10:08

    This Podcast Is Episode Number 417, And It's About Winning Tactics For Contractor Paperwork You started your contracting company to have fun, be your own boss and do the work you love. Now you are overwhelmed with paperwork, and the fun is gone!   One of the biggest struggles construction business owners deal with is the overwhelming amount of paper they have to organize as part of their everyday tasks. Invoices, receipts, bills, contracts, client records, pay applications, insurances, licenses - are just among the few in the seem to be never-ending "etc."   Keeping essential documents is necessary. Most contractors go from one extreme to the other. One extreme is saving everything for decades, and the other is tossing everything out.   What to save? What to toss out? At Fast Easy Accounting, we no longer need to print and save every document in file folders and keep adding new file cabinets. Our paperwork processes ensure your happiness and peace of mind knowing that your papers can be retrieved electronically at any time in the future. Here are my Paperwork Tips: Save your receipts If you have it in paper, get a file box and toss in all the gas, food, miscellaneous receipts paid by credit card. Make a note on the receipt. You have the receipt for backup. I remember a story where someone needed to prove where they were. Charges on the credit card statement weren't enough.   Make individual file folders For your state taxes, quarterly payroll reports, W-2's, 1099's. Other helpful folders are for your Bond, Liability Insurance, Worker's Comp Insurance, Tools, Office Equipment, and Cell Phones. All the statements you may need to reference over and over again and Receipts with extended warranties. Print a copy of the contract with your client An electronic signature is fantastic. Use a service that will time and date stamp in case of a dispute or an issue arises. If all goes well, then The Signed Contract is just another piece of paper. I have heard stories of customers altering the contract, and the contractor did not double-check. Magically things happen with software. Be sure what the client signs are the exact copy of the agreement you sent them and expected to be signed. Take credit cards Use multiple services if that is what is available. If you use a service to send your contracts for signature and have a Merchant Services feature, sign up for it. Everything that happens seamlessly is the best. Approval Now + Authorization of Payment means you have real money (their money) to start the job.  OPM (using Other Peoples Money – meaning you are using the client's money to start, continue and finish the job). Build in the Merchant Services Fee into your pricing. Cost of doing business.  Many contractors lost money on Groupon Coupons as customers only do the One or Two Rooms as was prepaid on the coupon. (Example Carpet Cleaning – Drywall Patching)  Use an invoice built on Excel Word is pretty and is needed for all the descriptions. But to properly get the money you expect to be paid, you need a form that adds up the money.  Do not call all the payments a Job Deposit from beginning to end. Call it a Statement, Progress Invoice; once work is approved, it is no longer an Estimate or a Work Order. If you are in a sales tax state (Washington State) and need to collect sales tax, add sales tax to every invoice.  Customers have selective memory. Be sure to use "Plus Applicable Sales Tax" on the Estimate, Contact, and future billings. If sales tax increases, you need to be able to pass the increases on to the customer.  Identify which job it is Contractors who are doing remodel projects like to have job costing. To achieve primary job costing reports, the accounting software needs to know what job the expenses should apply to.  Many contractors will create a single file folder and drop all of the individual receipts in it. This is handy if they have outsourced their bookkeeping and needed to give their bookkeeping to others to enter into accounting software (QuickBooks). A straightforward way to add more detail for bookkeeping is to have accounts with the primary supplier. The person at the counter will ask you if you have a PO (Purchase Order). Purchase Order does not need to be complicated. Job Name and Job Address. Why both name and address? Because the name that pays the bill may not be the same as the nickname that you know your client as. Examples: Bob, Bobby, Rob, Robby, Robert or Bill, Billy, Will, William may be the same person to you but not to the bank or credit card company.  Always exciting when Spouse, Family member, or good friend helps pay your invoice. From the Accounting side, next week, next month, next year, will you remember which job the individual receipts are tied to?  Keep good records For larger projects – use a file folder for each invoice, especially if you are billing Time & Material or Cost Plus.  Customers will randomly want to confirm the cost of some or all of the items. Does your customer want copies of all receipts?  Does your customer want to nitpick the price of each 2x4, cost of temp, service, and every dump fee?  Does your customer agree verbally to Change Orders but give excuses when asked to confirm changes on paper or by email?  Does your customer hide when you ask for payment? Conclusion: Remember, if you are sick and tired of doing administrative tasks such as handling your documents, we are here to remove your paperwork frustrations. Although a 100% paperless office is not the complete answer, we can certainly help you reduce most of it. In most cases, we can help contractors like you eliminate over 50% of your paperwork; the related savings and increased production more than pays for our services. 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    

    0416: If My Construction Business Is Making A Profit Where Is The Cash

    Play Episode Listen Later Apr 23, 2021 7:56

    This Podcast Is Episode Number 416, And It's About If My Construction Business Is Making A Profit Where Is The Cash Some construction business owners find themselves in the difficult position of running a business that appears to be profitable but still having no money in the bank. It's a critical situation to address. After all, a lack of adequate cash flow is one of the leading causes of small construction business failure.    Here are three reasons why profitable construction businesses have little money in the bank and what company owners can do to handle these tricky situations.  1. Using business money for personal reasons Owners may be using their business bank account as a personal bank account, withdrawing the money as they see fit. Of course, business owners need to earn a living. Instead of using the business account as a personal account, you should give yourself a wage and transfer that from the business account to your personal account at set intervals. If your personal money runs out, you can't go back to the business account for more money until your next withdrawal date.  Regular use of the business account, even for relatively small amounts, adds up and can have a drastic effect on your business's cash flow.   2. Not collecting payments Construction businesses need to make money, and they do so when customers pay their bills. Not sending out invoices promptly, not following up when customers fail to pay, and not conducting adequate credit checks on customers all put cash flow in jeopardy.  It's best for contractors like you to send out invoices with clear payment terms and follow up immediately if customers violate those. You can also put procedures in place to avoid customers who are unlikely to pay for work done or mitigate the damage if clients attempt to get away without paying. Requiring deposits, for example, are a great way to manage both cash flow and customers.  When doing a construction project, do not be a banker! Invoice early and often and get change orders signed. There Is A Hall Of Justice, But There Is No Hall Of Fairness No law says there have to be change orders. A lawyer may enforce a verbal contract; however, for contractors, unless you have something in writing, it is my opinion that construction contracts are fixed in stone. If a deal states, "I will pay you $X to do Y scope of work," your customer cannot force you to do more, and you cannot do less than agreed. Change orders can protect you and your client. Change orders give contractors leverage because you can refuse to make the change unless you are paid. 3. Not preparing for tax season Many small construction business owners see taxes as something they can worry about later. Then tax season rolls around, and they don't have enough money set aside to pay the collector. In some cases, a construction business may have suddenly had a significant profit increase but have not increased the amount set aside for taxes.  Treat your taxes as a regular expense. Set money aside each month to pay taxes. Suppose there is a drastic increase in profits, set aside even more money. Being prepared is far better than being caught with too little.  Final thoughts There are steps you, as a construction business owner, can take to ensure that your business makes a profit and has money in the bank. First, you should learn how to read and understand your balance sheet and Key Performance Indicators (KPIs). These show how much money is coming in and where it's going. It also highlights which customers aren't paying their bills.  Contractors should also avoid using the business bank account for personal expenses. Instead, you should pull a set amount of funds to your personal account and limit your personal expenses to that amount. Finally, you must understand your liabilities. Liabilities affect how much cash is available for your business, and even minor penalties add up quickly. Know how much is owed, how much is paid monthly and when those bills are due.  By keeping track of the money coming into your construction business, where it goes, and when it leaves, you can get a better handle on ensuring your business not only makes a profit but has money in the bank.   Got a question? Let's talk. 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  

    415: Proven Construction Client Payment Practices That Work

    Play Episode Listen Later Apr 16, 2021 8:41

    This Podcast Is Episode Number 415, And It's About Proven Practices To Collect Construction Client Payments Effectively All construction contractors have experienced bad debt's financial pain, which is defined as a customer who refuses to pay no matter what you do. We've been there before, and it will probably happen again in the future. Owning and operating any business, including accounting, means sometimes you provide goods and services and not get paid. Knowing The Answers Helps "If you know the answers, the questions will not bother you" - Randalism. When you sat for an exam or a school test and knew the material forwards and backward, it was fast and easy. The exams and tests for the classes you struggled with were the opposite. In your construction company, it is the same; you need the answers to develop understanding, which helps us all let go of the past and move forward. The larger your construction business grows, the more likely you could end up operating as a bank without the hundreds of ways to generate revenues from fee income and interest calculation that banks use. The most popular method designed by investors and developers and shrewd business people who understand the concept of divide and conquer is for contractors to get little or no down payment for a construction project, do all the work, including change orders, and then try to collect their money. The least popular method is getting work orders, contracts signed, and deposit checks before starting the project because most of us were conditioned from childhood through adulthood and beyond not to ask for money. Some construction company owners are gung-ho about doing the work and yet are embarrassed about asking for money. Here are the best construction client payment practices that worked for our company and clients: 1.Separate the good from the bad. Not everyone who never pays you is a bad person. Sometimes things happen which are beyond their control. We have clients who have experienced situations beyond their control in all of our companies, and when it is legitimate, we have been known to issue a letter stating the debt is canceled, and they owe us nothing. Oddly enough, most of them paid the debt years later, and all of them were very appreciative that we treated them with courtesy and respect. Some people are just bad, like Bad Bookkeepers, and I would rather be the person who was taken advantage of than the one who took advantage. Do whatever you think is within reason to collect the debt and no more. 2. Offer payment options. You are not a bank, so never, ever use your high-interest credit cards and supplier accounts to provide financing to your customers in the form of offering a lot of labor, material, subcontractors, and rental equipment, hoping to get paid later on down the road. You can offer to finance by getting a merchant account setup at a bank or credit union that will contribute to loan your construction client's money for small projects. Your construction client signs paperwork with the lender; you do the work and get paid. Accepting credit cards is another way to offer to finance, and it is like having an "Electronic Armored Car" on standby 24 hours a day, seven days a week, ready to automatically take your money to your bank. If your QuickBooks is set up correctly, an invoice can be emailed to your customer or clients, and when they open it, there is an option for them to pay by credit card immediately. Ask and receive job deposits and progress payments so that you are always using "Other People's Money" (O.P.M.) to pay for the labor, material, subcontractors, rental equipment, and overhead of their construction projects. 3.The right mindset. Finally, consider the 80/20 rule, which means investing your time and energy in the highest and best use, for example: Which action is likely to yield the highest return on your investment of time and energy and put the most money in the bank:   #1 Chasing a client who cannot or will not pay?   #2 Focusing on your top 20% clients and finding more of them?   We work with many contractors, remodeling contractors, and tradespeople, and we coach the ones who listen to not sweat the small stuff and instead focus on developing a system that can help you win the big game.   Which Is Better?   #1 Annual sales of $250,000 with $45,000 net income including your salary              #2 Annual sales of $2,500,000 with $350,000 net income including your salary   The right answer is whichever one lets you sleep well at night! We show only the necessary tools to open your mind to the possibilities that are available to you.  Final thoughts Having owned and operated several construction businesses, we know how vital cash flow is to any business's success or failure, especially construction companies like yours!   The right mindset and method will help you avoid client payment problems. The best finish carpentry tools in a golf professional's hands without proper carpentry training will not produce anything near to what a skilled finish carpenter can. The same can be said about the best construction business consulting and accounting tools in an experienced finish carpenter's hands. Moreover, we say that with respect and admiration for everyone in construction. 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

    0414: Leading Contractors Successfully Through Major Organizational Change

    Play Episode Listen Later Apr 9, 2021 9:50

    This Podcast Is Episode Number 414, And It's About Leading Contractors Successfully Through Major Organizational Change We are all currently experiencing and adapting to present pandemic times. We've probably adjusted our business model to cater to our clients, new and existing. Construction business change is almost always a good thing, but often poor management means that the workforce becomes disengaged and the change process painful. In the worst cases, this results in irreparable damage being done. It doesn't need to be this way. Follow these steps and empower yourself to lead your contractors through significant organizational change successfully. 1. Understand the change Make sure you understand precisely what is changing and how it affects your people. Speak to whomever you need to ascertain this properly. You need to know what the impact is on your people and the jobs they do.  Educating yourself will mean you're better equipped to communicate with your staff. It will give them confidence that you are the right person to lead them into the unknown. It will also relieve their anxieties, as they will trust you to keep them informed and look after their individual and collective interests. 2. Communicate effectively Regular and varied communication is essential in managing change. Initial briefings to employees should be face to face, with adequate time set aside to prepare beforehand.  They should be delivered by an appropriately senior manager who also has excellent presentation skills and a natural delivery style. The audience needs to be engaged, not alienated. In the future, set up a recognized channel that will control information flow on daily developments.  This could be an online micro-site or a newsletter or bulletin. Ensure the tone and language are upbeat and that the positive messages the business wants to promote about the change are a recurring theme. You should consult with your marketing team for advice on how to do this effectively. 3. Consult with your people Consult staff on their views and provide clear channels for those opinions to be received. Consider providing an email address to receive questions, or if you have set up a micro-site, set up a message board that allows for questions and answers to be posted online.  It is equally important to ensure you are responding swiftly to those questions. It's a good idea to set up and publish an FAQ list, preventing answering the same question multiple times. This will also help inform the content of future communications through understanding the hot topics.  Ultimately, the change may be mandatory and not open to amendment, but even if this were true, communication must still be a two-way street. If you don't demonstrate an active interest in employees' views, you risk an outright mutiny. 4. Use your champions Identify the characters in your team that are positive about the change, and pick out one or two popular to hold or sway over their teammates. These are your wingmen, and it's essential you tap into that resource early. Get them on the side and meet with them regularly. Explain the critical role they have to play in helping others to stay upbeat. As well as being a supportive and positive voice amongst the people, they are also your eyes and ears, in a position of trust with colleagues. This means they will pick up on potential concerns or flashpoints early and bring these to your attention in confidence.  Your champions will play a pivotal role in supporting managers; positive voices from the populace are invaluable. 5. Control the dissenters The negative voices in your team are often the loudest and most influential. You will have several people in your organization who are confused or undecided about how they feel about the change. They are susceptible to being convinced by your team's detractors, who will attempt to rally them to their cause. If all those sitting on the fence jump off on the wrong side, your life will worsen. Don't let that happen.  Target those dissenting staff members and speak to them individually. Show empathy and understanding of their concerns but explain their colleagues' impact on their negativity's open expressions. Try to get them involved in meetings, taking an active role in being a critical but objective voice.  But ultimately, if their views are extreme and it's clear they intend to persist being a disruptive influence, then take a hard line. Tell them their behavior is not acceptable and could lead to disciplinary action on the grounds of their conduct. 6. Maintain the business Don't let your team lose focus on their day-to-day responsibilities and the running of the construction business. There will inevitably be some impact on productivity during a major change. However, there is a limit to this, and staff needs to be reminded that their traditional roles and responsibilities remain. Plan briefings and communications to minimize the impact on your resources, and by extension, your customers. 7. Toe the line A lack of professionalism and objectivity of managers can spell disaster. Even if you feel that the business change is fundamentally wrong or concerns your seniors' judgment, you must not reveal this. You need to maintain the party line and express the changes in favorable, objective terms.  Discuss your concerns with others you trust in the business if you need a sounding board, but be very careful whom you confide in.  8. Manage outside influences The change may attract outside attention from the local or national press or pressure groups. This might happen if your organization is huge, in the public sector, or a regulated or contentious industry. In these cases, you also need to be aware of the effect of these outside agencies' activities on your employees. You can rarely exercise much control over external media, but you can make sure your finger is on the pulse. This will allow you to react quickly if an external event occurs that's likely to cause disruption or concern. Final thoughts Change doesn't have to be stressful and unpredictable, providing you to plan and stay in control. The key to success is keeping your construction employees bought into the objectives and engaged with the change mechanics. Following these steps will ensure you do that and allow you to successfully lead people unscathed through even the most major organizational change. 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

    0413: The Ugly Truth About Doing Your Construction Company Payroll

    Play Episode Listen Later Apr 2, 2021 10:11

    This Podcast Is Episode Number 413, And It's About The Ugly Truth About Doing Your Construction Company Payroll Still Doing Your Payroll? At face value, it seems like a great idea.   If you're a small construction business owner with just a few employees, you probably think hiring a payroll specialist is an expense that you can avoid.    You feel that you can handle it yourself. You have the best intentions to keep your staff paid and on time. What could go wrong, right?   Well, lots. Here are 3 reasons why you should stop:   It's a time waster If you don't have a finance background, you'll likely spend a substantial amount of time calculating employees' work hours, computing for taxes and other deductions, creating payslips, processing, and filing. Even if you have a bit of a bookkeeping background, are you sure you want to spend your precious time doing these tasks instead of focusing on your construction business's core aspects? You don't need to study the ins and outs Sure, you can learn about relevant tax adjustments and benefits procedures if you want to. But then again, you'd be spending more time educating yourself, not to mention the possibility of making costly mistakes.  On the other hand, a payroll specialist knows the ins and outs of taxes, overtime, contributions, sales commissions, and bonuses. The bottom line is: another professional can do it better, and while they're at it, you can get back to doing what you do best-- like growing your construction business! It may cost you more to do it yourself One of the most common mistakes of construction business owners is that they think they're saving money by doing everything on their own. Remember, time is money-- and as mentioned earlier, instead of dedicating your time doing tasks such as payroll, you can spend it more efficiently on business activities that drive profits and growth. If you get your payroll wrong or fail to do it on time, you can get penalties that are not fun. These are also avoidable if you entrust a payroll specialist. A Better Approach If you think hiring a full-time in-house payroll staff is not practical, you can always come to us and let us take care of your payroll. Whether you need weekly, fortnightly, or monthly processing, our team is flexible enough to do it for you.  When contractors ask us which payroll option we recommend most, often we say Direct Deposit. As usual, the reasons are simple and related to our primary role as "Profit And Growth Specialists For Contractors" and our mission, which helps you - the men and women of the most significant industry on earth - the construction industry, to achieve your definition of success.  Option 1 - Paper check looks like the least expensive. Calculate payroll, handwrite or print a paycheck, hand it to your employee, and done. What is the first thing an employee does after getting a paper paycheck? They go to the bank or the check cashing store and get cash! If they are paid for travel time to and from the job site, they will typically cash their paycheck to the job site or take a break as soon as the bank opens. Having this scenario in mind, there are three costs to consider:  #1 Travel Time - See What Is Ten Minutes Costing Your Company and multiply by three! Because it will take ten minutes each way to detour to and from the bank or payday advance company plus ten minutes inside the building. For example, you pay your employee $25.00 per hour, which means every ten minutes of doing personal business on company time costs you $5.94, multiplied by three equals $17.82. If your company earns 10% Net Profit, you need to sell another $178.20 worth of work to compensate for the loss you suffered. If there is more than one worker in the company vehicle, multiply everything by that number. #2 Cost Per Mile - To operate the company vehicle, which varies depending on the type of vehicles your company uses. Generally, the numbers we see range from $1.25 to $1.75 per mile. This takes into account Fuel + Insurance + Repairs + Maintenance + Registration + License divided by the number of miles driven. In this example, we estimate a three-mile detour at the middle range of $1.50 per mile = $4.50 #3 Delays On The Job - In construction, you are dealing with project-based systems, not operations or manufacturing-based operations. Every additional day you have to mobilize and de-mobilize costs you money. For example, if it takes (15) minutes for (4) workers to get set up in the morning and the same amount of time at night, your total costs could be $121.92. Total cost for paper checks - between $15.00 and $50.00 per employee. To get the actual results for your company, some analysis would need to be run, or you would look in your Business Process Management System (BPM) for the answers. Option 2 - Direct deposit could cost an additional $5.00 per payroll and $0.99 per deposit. Direct deposit drops into your employee's bank account one minute after midnight on the day payroll is due. Having a Professional Bookkeeper prepare the payroll is less with direct deposit because of the time saved in making and printing the paper checks, setting them aside for you to sign them, stuffing them in the envelopes, and taking time to pass them out. Option 3 - Debit Card is similar to a direct deposit. The difference is that the employee does not need a checking account. Final thoughts As payroll experts in the construction industry, we can keep your employees happy with timely and accurate wages, maintain tax compliance, and significantly ease your back office burden. Profitable construction companies have known the value of outsourced bookkeeping services. Remember, you deserve to be wealthy because you add value to other people's lives. So get in touch with me today and give yourself the peace of mind you deserve! 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

    0412: The Right Accounting Software Can Increase Your Profits

    Play Episode Listen Later Mar 26, 2021 9:38

    This Podcast Is Episode Number 412, And It's About The Right Accounting Software Can Increase Your Profits Most construction business owners who use accounting software quickly master the basics. They automate processes like invoicing and payroll, track expenses, and view real-time financial reports to manage cash flow and make better business decisions.  What three reports do you need for your construction business? #1 Cash On Hand - This report shows you how much cash you have in your checking accounts, savings accounts, payroll accounts, hip national bank (your wallet), and petty cash box in your office.  #2 Cash Coming In - This report shows you how much cash your customers and clients owe you and how much of it will be likely to receive in the next 30-60-90 days. #3 Cash Going Out - This report shows you how much cash you owe yourself, suppliers, employees, and the taxman and how much of it will be likely to pay out in the next 30-60-90 days. It used to be QuickBooks was the only real option for construction companies to generate a decent set of Financial Reports and Job Costing Reports, and that is still true. Our biggest pain point with QuickBooks has always been it is like a large semi-truck with two trailers capable of moving massive amounts of data which is great if your construction company needs Work In Progress (WIP) Reporting, Pay Application Invoicing For Large Residential Remodels, Pay Applications For Commercial Tenant Improvement (TI), Job Deposit Tracking, Retention Tracking, Schedule of Values, Complex Job Costing Reporting Services and other construction reporting which we provide. What about the contractors and service companies like plumbing contractors, electricians, handymen, drywall repair, carpet cleaners, HVAC, remodeling contractors that have jobs lasting a few days, locksmiths, and hundreds of other service companies? Xero Accounting Online To The Rescue The short video below shows side by side the primary Financial Reports contractors need in living color. Please take a look and leave a comment; we want to know what you think. Do You Own A Small Contracting Company? Do you look forward to the day where you can press a button and know where all your money is because it is stressful to wing it like you are doing now? Perhaps you own a service and repair firm specializing in plumbing, electrical, HVAC, or maybe a handyman service or someone who does small construction projects that last from a few hours to a few days, and you only need to give your customer or client one invoice? If this describes you, then perhaps Xero is a better fit for you than QuickBooks. We offer both Xero and QuickBooks bookkeeping services for construction contractors and have found the dividing line is how you get paid. QuickBooks Works Best If You Take Job Deposits Have Change Orders Issue Multiple Invoices Need Job Costing Reports Need Payment Applications Periodic Invoices For Bank draws Need Complex Construction Accounting Reports Xero Accounting Online Works Best If You Have Simple Jobs With One Invoice Need Basic Key Performance Indicator Financial Reports Now that you have a better understanding of the right accounting software for your construction company, it's time to take advantage of critical insights that can improve customer care and increase sales.  Gain insights that increase sales If you're not tapping into your QuickBooks or Xero analytics to better understand your customers, you're missing a major opportunity to close more sales. Most accounting software can highlight your biggest spenders and buying trends. How would knowing who your best customers are, your biggest selling services, and how much each customer spends impact your marketing decisions – not to mention help you fine-tune your sales strategies? By the same token, when you know which products and services aren't selling, you'll be able to make more profitable purchasing decisions. Improve customer care and boost profits QuickBooks and Xero can offer peace of mind when you know your financials are accurate and up to date. But another major advantage of an online accounting solution is how much time you'll save by automating processes like invoicing and payroll – giving you more time to follow up with clients and seek out new prospects. We all know how important the personal touch is when it comes to sales. So why not use your accounting software customer data to help remember your customers' birthdays or thank them when they've hit a milestone – spending more than $5,000 on your services, for example?  With enhanced customer data at your fingertips, your business will earn a reputation for personalized service. You'll be able to respond quickly when a customer calls with a question about a product or an order. And you'll be able to suggest substitutions and offer valuable add-ons based on their buying preferences, so upselling becomes a snap. Final thoughts  Savvy business owners take the first step toward better profitability when they stop thinking of accounting software as only a financial management solution and start thinking of it as a comprehensive tool for business growth. You may be surprised at the many ways accounting software can help you better serve your customers or improve your sales strategies when you look at its true potential.  Now that you have a handful of ideas for better use of your accounting software, what will you do differently to enhance customer care, improve your profits and continue to grow your construction business?  We make everything painless for you, whether you are using QuickBooks or Xero. Would like to outsource or Do-It-Yourself - we can offer you services that fit well with your budget and construction business needs.  If you missed it, we have an ongoing promotion for our blog subscribers and podcast listeners! You can use this code in both our Fast Easy Accounting Store and Construction Accounting Academy for a 30% Discount: SPRING30 Code is valid up to Sunday, March 28, 2021, at 11:59 PM. (Please note: Offer does not apply to Outsourced Accounting, Bookkeeping Review, or any Consultation and Training products; you can use it, however, to purchase any course or monthly subscription classes in Construction Accounting Academy). 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  

    0411: Overcome The Struggles Of Hiring And Managing Independent Contractors

    Play Episode Listen Later Mar 19, 2021 10:50

    This Podcast Is Episode Number 411, And It's About Overcome The Struggles Of Hiring And Managing Independent Contractors  

    0410: How To Make 2021 Your Contracting Cash Flow Year

    Play Episode Listen Later Mar 12, 2021 10:07

    This Podcast Is Episode Number 410, And It's About How To Make 2021 Your Contracting Cash Flow Year Nobody wants their business to fail. Although it's impossible to predict the future with 100% accuracy, a cash flow forecast is a tool that will help you prepare for different possible scenarios in the future.  What is Cash Flow Forecast? Cash flow forecasting is the process of estimating how much cash you'll have and ensuring you have a sufficient amount to meet your obligations. By focusing on the revenue you expect to generate and the expenses you need to pay, cash flow forecasting can help you better manage your working capital and plan for various positive or challenging scenarios. A cash flow forecast comprises three key elements: beginning cash balance, cash inflows (e.g., cash sales, receivables collections), and cash outflows (e.g., expenses for utilities, rent, loan payments, payroll). Building Out Cash Flow Scenario Models It's always good to create best-case, worst-case, and moderate financial scenarios. Through cash flow forecasting, you'll be able to see the impact of these three scenarios and implement a suitable course of action. You can use the models to predict what needs to happen, especially during difficult and uncertain times.  In situations where variables shift quickly, such as during a recession, reviewing and updating your cash flow forecasts regularly on a monthly or even weekly basis is highly recommended. By monitoring your cash flow forecast closely, you'll be able to identify warning signs such as declining revenue or increasing expenses. How To Improve The Accuracy Of Your Cash Flow Forecast In cash flow forecasting, your estimates are based on historical data. This means having accurate historical information is critical. Below are some tips for improving its accuracy: At the end of the week or the month, input your actual results or the cash that was received and money spent. This will allow you to identify which items you got wrong in your estimates and evaluate why you got it wrong. This analysis may lead you to place more significant issues and help you make adjustments to your assumptions. Carefully evaluate all of your assumptions. Take note that just because it's correct now does it mean that you'll get it right in the future as well. Go through everything, especially when it comes to sales, and validate it. Don't forget to include annual payments, loan payments, credit card debt payments, and estimated taxes. It's almost impossible to forecast where your business will be in longer than one year out. You'll introduce more risk and greater uncertainty the further out your financial scenario models go. How To Manage Your Construction Cash Flow Owning a small business in the construction industry can be incredibly stressful. In addition to the long days and hazardous working conditions, you have to worry about cash flow issues. It can take a long time to collect on payment from your clients or contractors who hired your business, and in the meantime, you have to pay employees, cover fixed expenses, buy supplies and pay your subcontractors.  Here are three tips for managing your cash flow if you own a small business in the construction industry.  1. Be aggressive in following up on invoices  Small businesses in the construction industry are at risk of having their clients not pay them on time. Or at all. Being too passive in collecting unpaid invoices or reminding clients when payment is due will not help you manage the money you need to pay your bills. Sending out reminders of invoices that are due can not only speed up getting you paid but also encourage clients who were considering not paying you to reconsider. Reach out to clients if necessary to discuss payment options. Even a payment schedule is better than no payment at all. The worst thing you can do is sit around and hope your client will pay you.   2. Watch for scope creep "Scope creep" occurs when clients or other project stakeholders change a project's goals or deliverables. Almost all projects experience some form of scope creep, but too many changes to a project can severely impact your bottom line, and it can hurt your cash flow.  Ensure your project's terms are set out clearly and let clients know that any changes to the project will result in additional fees. If clients attempt to change the project, you can remind them about the original agreement and the extra costs. If they insist on making the changes, you are free to charge the agreed-upon amount.  3. Consider delegating the financial tasks Many construction small business owners become self-employed because they have construction skills, not because they want to be businessmen. The financial aspects of running a construction business are complex and take a great deal of time and planning. That can add much responsibility to the business owner.  Hiring someone to take care of your business's financial aspects, or even to advise you about the decisions you face, can take the stress off you. That's precisely how we can help. Having someone on your side who has the financial expertise that can assess your business, advise you about your cash flow and help you secure funding is invaluable. It will be worth it in the long run with the time and money you'll save.  Final thoughts Whether your contracting business is growing, fighting for survival, or you want to run it better, a cash flow forecast can help you make critical decisions that impact the financial health of your company. Most construction business owners face cash flow issues at some point in their careers. Unfortunately, those in the construction industry typically have a more difficult time managing cash flow. The large scale of the projects, the multiple stakeholders involved, and the number of factors that can go wrong on a project all increases the financial risks. Following a few steps can significantly enhance your cash flow and make financial management in your business a more painless process this year and the years to come.   To get expert assistance with your cash flow forecasting and management, connect with me through email or phone call. Get in touch to book a one-on-one free consultation, and we'll work out a plan to help you keep more money in your pocket. 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

    0409: The Answer To Your Construction Bookkeeping Chaos

    Play Episode Listen Later Mar 5, 2021 10:37

    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

    0408: 4 Contractor Do-It-Yourself Bookkeeping Flaws Exposed

    Play Episode Listen Later Feb 26, 2021 9:54

    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

    0407: Critical Crisis Takeaways For Construction Business Owners

    Play Episode Listen Later Feb 19, 2021 7:01

    This Podcast Is Episode Number 407, And It's About Critical Crisis Takeaways For Construction Business Owners If there's one thing last year taught us, it's how quickly the world has changed in such a short time and that we cannot take anything for granted. While we can all hope that the pandemic is a once-in-a-lifetime scenario, there is a lot in life and in business that is uncertain, and there is a great deal we can learn from the response to COVID-19 to help plan for the future. Yes, your construction company might have changed drastically in recent months. There is good news in that, too. It means your business is adaptable and that you can find ways to survive. Here are some lessons learned from resilient businesses and business owners during COVID-19. 1. Be Adaptable There are ways that many small businesses adapt to ensure they can continue operating during a crisis. The question is whether you're willing to adjust or are fighting to keep your business the same as before. You might miss the old ways of running your construction business. However, losing the old way of doing things doesn't mean you have to hold firm to them. Adapting your goods or services and letting office employees work remotely are all changes that can ensure your business stays open after COVID-19 is over and even save you money in the long run. 2. Plan Ahead While almost nobody saw this disruption coming, some experts warned about the possibility of a recession and how to prepare for it. Unfortunately, many small business owners limit their planning to a crisis that lasts only a few weeks, which is where they get into financial trouble. Disaster can strike at any time, and it doesn't have to be a global pandemic. Having a healthy cash flow, savings account with enough built up to cover costs for at least a few months, and a plan for addressing recession scenarios will help your business survive tough times, whatever brings them about. You don't want to be reactive to an emergency because that's when terrible decisions get made. Instead, plan, so you're prepared and don't have to make tough decisions based mainly on emotion. Prepare for an emergency that lasts months, not just weeks. 3. Pay Attention In situations like COVID-19, business owners can learn from and help each other. Take a look at what others in the construction industry are doing, and even look outside your trade for inspiration. Seeing someone move their services online might give you an idea of how you can remotely provide some of your services. Noticing how construction businesses similar to yours adapt can influence you to make beneficial changes to your company. Reach out and talk to other business owners; to your clients to find out how you can help them. At times like these, you aren't alone in trying to keep your business operational. Everyone is looking for solutions, and there's a good chance you can help each other. 4. Embrace Innovation Innovating internally, such as upgrading your technology department or even as simple as updating your systems and processes, or externally like offering a different business model to your clients. One of the most often cited reasons for not embracing innovation is that it is too risky. Prototyping or testing often comes with a high cost. Combined with the cost of the time spent, this can all be relatively high for an unknown outcome. There is no way to eliminate the risk in innovation, but there are ways to reduce it. It's easy to understand the dilemma. A construction business owner doesn't want to put himself in a position to waste time or money, especially as the economy continues to climb out of the sinkhole, and yet, businesses that don't innovate will suffer severe consequences, maybe damaging the construction company beyond repair.  It's important to back up and ask a few key questions: What problem is being solved, and for whom? What are the financial benefits and drawbacks of this idea? Identify the potential roadblocks. Final thoughts Global pandemics can devastate a small business and have lasting impacts on the industry. There are many lessons that construction business owners can take away from COVID-19. To help them survive the next economic emergency, being adaptable, planning, paying attention to industry leaders, and embracing innovation can all help your business through any financial disaster. 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

    0406: Practical Tips To Trim Your Overhead Costs

    Play Episode Listen Later Feb 12, 2021 7:47

    This Podcast Is Episode Number 406, And It's About Practical Tips To Trim Your Overhead Costs Every small construction business owner knows how challenging it is to cut down expenses without somehow compromising internal or external quality. Regardless of your business's nature, the first step to reducing your overhead costs is to take the time to go through every single expense you have. Next, assess which ones are necessary for your business to operate smoothly, what can be trimmed down, and what can be eliminated. It's important not to rest on your laurels. Continually thinking of ways to reduce your overheads is essential for a healthy cash flow, so conducting regular reviews of your business expenses should be a routine task. Here are some smart and practical tips that you might not have considered to lessen your costs while maintaining employee and customer satisfaction. Negotiate with suppliers Don't hesitate to contact your suppliers and vendors to request flexible monthly payment plans or discounts, especially with the current challenging economic climate. They are often willing to help out small- and medium-sized business clients and cut them a break. Review your software subscriptions It is no secret that cloud-based apps and tools can help you manage your business with ease. Although a few dollars a month might seem affordable at first, the costs can quickly add up once you set up your subscription for multiple apps. If you want to reduce your overhead costs, audit your recurring software subscriptions and cancel those you rarely use. You might also want to downgrade your plan or opt for the free version of these tools. Furthermore, you can search the internet for cheaper or free alternatives that offer the same functionality. Maintain a paperless office If you are still relying on physical printing, going all-digital and paperless will remove printing-related costs and keep your documents better organized. Aside from being cost-effective, a digital workplace is also environmentally friendly and means data is easily accessible. Revisit your Marketing Strategy To grow your business, you must be willing to set some marketing budget, even if you are trying to cut down on expenses. However, before you continue with your marketing strategy, it is crucial to evaluate each channel and its return on investment. Get a clear idea of how much you are spending and gaining from each marketing channel. Test and measure different media, and re-allocate your budget accordingly if you find one that isn't working. Get a financial advisor Regardless of how confident you are with your new budgeting, it pays to have a fresh set of eyes to look into it. An experienced accountant can provide you with an objective analysis of your budget allocations and help you save even more on your expenses. Ways to save There are several things you can look at here, tried-and-true methods for keeping costs down. Some of the most effective are: Business taxes – talk to us about ways you can legally save on your taxes. For instance, can you claim your home area as an office, which is a legitimate business expense? Importing – you could look at importing your business's raw materials. It could be that they're cheaper to buy from an overseas supplier than the one you've been using locally. Make the most of technology – moving your accounts to a cloud-based system, reducing manual paperwork processes, and communicating with your customers over Skype or Zoom instead of visiting them face-to-face will all help reduce costs. You can even have your staff work from home and, as mentioned above, save on renting a commercial space. Final thoughts Cash flow is the lifeblood of any construction company, especially those with annual sales volume under $1,000,000. Some construction Company experts even say that healthy cash flow is more critical than your contracting company's ability to complete projects. While that might seem counterintuitive, consider this: if you fail to satisfy a customer and lose that customer, you can always work harder to please the next customer. If you do not have enough cash reserves to pay your suppliers, creditors, and make payroll, then your Construction Company is out of business; game over! 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

    0405: Early Warning Signs Of Insolvency To Watch Out For

    Play Episode Listen Later Feb 5, 2021 7:40

    This Podcast Is Episode Number 405, And It's About Early Warning Signs Of Insolvency To Watch Out For Running a construction business isn't exactly a walk in the park. It is hard work but a rewarding journey at the same time, and you can probably attest to this yourself.    Sometimes, things also don't go as planned, and you may find your business in financial distress. Suddenly you find yourself falling behind on due dates, suppliers are chasing for payments, and your stress levels are skyrocketing.    Regardless of your business's nature, it would be best if you had sufficient cash flow to meet your financial obligations. And the closer you are to not being able to do this, the closer you get to insolvency.   To ensure that your situation doesn't get worse and prevent your construction business from going under, here are some early warning signs to look out for. These are signs that you need to deal with the situation as soon as possible. Constant Shortage of Cash In any business, cash is king. So if your business expenses are higher than your earnings, expect to experience some problems in the long run unless it is well-funded. Don't let your cash flow continuously stay negative for extended periods, as it can imply that cash in the bank could be running low and eventually lead to bankruptcy. Falling Profit Margins Long-term survival requires sustained profits. Falling profit margins may mean that costs are increasing and income is declining.  If your business struggles to earn good profits, it may be challenging to keep it running smoothly and may cause added pressure to your cash flows. Delayed or Defaulting on Payments  If your business has to delay payments to its creditors continually, some suppliers may be forced to halt the supply, leading to delays in your production or service delivery.  Also, it is not unusual to forget or miss a payment. However, if it is becoming too frequent, this is a warning sign of business failure. Higher Interest Payments If lenders are not confident of your business viability or see your business as high risk, funding debt will cost more and interest payments will be higher. Because high interest can put added pressure on your cash flow, this will likely worsen your situation. Difficulty in Raising Capital Do you find yourself in constant need to borrow or ask investors to inject more capital into your business? If so, this is a glaring sign that your business is finding it challenging to self-sustain. Now is the time to re-evaluate your enterprise and check if it is viable in the long-term. Employee Turnover and Stress in Management Businesses in financial distress have increased employee turnover rates or reduction in headcount to cut down on costs. Also, significant changes in senior personnel and stress management are key indicators that your business is in trouble. Market Risks and Other External Factors Economic downturns, changes in market trends, the loss of a significant market or critical customers, loss of a franchise or license, among other external factors, may also put friction on your profitability. While these conditions are often inevitable and beyond your control, it is vital to be aware of these risk factors and stay ahead of these changes and disruptions. By doing so, you will effectively manage them and cushion their impact on your business. Is Your Construction Business At Risk? If you find your business showing any or some of these early warning signs, it's time to take action. The faster you act, the higher your chances of turning things around. While nobody knows your contracting business as well as you do, seeking expert financial advice right away is crucial for your survival in the face of insolvency. For a free initial assessment of your business, feel free to get in touch with me. I look forward to chatting with you, and hopefully not only help you understand your current situation but also help you consider your options, implement concrete action plans, and minimize your exposure to further risk through practical strategies. 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  

    0404: The Reason Why Some Construction Projects Fail

    Play Episode Listen Later Jan 29, 2021 8:42

    This Podcast Is Episode Number 404, And It's About The Reason Why Some Construction Projects Fail Estimating and submitting bids is one of the most stressful and nerve-wracking sides of your construction business. It is essential to keep in mind that "break-even" in the construction business is challenging to calculate because most projects are one-of-a-kind custom jobs. Proactive contractors have systems and cost libraries with pre-priced assemblies for bidding, which works in conjunction with Strategic Construction Accounting to provide management with progress invoicing, job costing, and job profitability. With poor bookkeeping, misguided judgment, and clerical errors come bad decisions on what projects to bid on and not to bid on until eventually, you'll run out of time and money. This is why some construction projects fail or, worse, construction companies get bankrupt.  Whenever someone decides to have some work done, they get several bids from competing contractors because they heard someone say a long time ago.  There are two things to consider: The Low Bidder Good / Fast / Cheap - Choose Cheap & Fast or Cheap & Slow! Expect the project to be late and over budget! Base costs - Taxes, fuel, cell phones, nails, glue, and small parts are the same for all contractors; no savings here. Labor - Cheap labor makes mistakes and causes damage because they are learning, by experience, on your project! Material - Price is King! So they buy and install cheap material! Tools - Cheap tools take more time, and the finished product may be hard on the eyes, but they have to cut costs! Trucks - Rickety old trucks and vans may break down, which means the job may take longer, but costs have to be cut! Office - They work out of their house or truck; so-called no-overhead Cheap Construction Manager - Biggest, "baddest" construction worker. Also, the bill collector. Also acting as a "Working Project Manager," which means the company is attempting to save money in the short run and lose money in the long term. Assembling parts and building something takes a "Tactile" mindset. Running a project is "Strategic." Put another way, no man can serve two masters as he will hate one and love the other, and the inevitable outcome is the Peter Principle, which leads to a construction train wreck. Invoices - Make no sense, the total cost may exceed the bid, and you will pay the contractor to avoid violence! Warranty - Cheap contractors cannot afford warranty work because they are "One-Hit-Wonders" never to return. The Other Bidders Good / Fast / Cheap - Choose Good & Fast or Good & Slow! Expect the project was done on time and on a budget! Base costs - Taxes, fuel, cell phones, nails, glue, and small hardware are the same for all contractors. Labor - Skilled labor costs more, produces more work faster with fewer mistakes, which means a quality project. Material - Quality and reputation are King! Skilled labor can install quality material faster than cheap material. Tools - Quality tools and equipment cost more and produce a product that is easy on the eyes and lasts longer. Trucks - Reliable trucks and vans mean the job is done quicker and with fewer delivery issues. Office - Skilled staff and office equipment provide for effective communication. Qualified Construction Manager - Has a construction background and formal training in project management. Most professional construction companies with good reputations will have people with credentials like PMP (Project Management Professional) assigned to oversee projects. Invoices - Are Pay Applications that make sense because they show a history of costs and payments made.  Warranty Work - This is a marketing cost because the first project is the beginning of a relationship. Final thoughts Never hire the lowest bidder. The sweetness of low price fades quickly while the bitterness of poor quality lingers on. When hiring a contractor, discard the low bidder because you will get what you pay for and sometimes less than what you paid for. See that you have enough time to review subcontractor pricing and make clarifications from the project manager, architect, or owner if there's anything you are unsure of. This is where writing down a list and checking it twice will come in handy.  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

    0403: Cash Flow Management And How To Track Income

    Play Episode Listen Later Jan 22, 2021 9:04

    This Podcast Is Episode Number 403, And It's About Cash Flow Management And How To Track Income A wise business owner once said, "Happiness is positive cash flow." As a business owner, I'm sure you agree. Everything is better when your cash-in exceeds your cash-out. A cash crisis can be emotionally devastating, and it can even kill your business. If you've ever had to beg, borrow, and steal to cover tomorrow's payroll, you know what I mean. Having a proper cash management system allows you to: Know when, where, and how your cash needs will occur. Know what the best sources are for meeting your additional cash needs. Be prepared to meet these needs when they occur by keeping good relationships with bankers and other creditors. The starting point for avoiding a cash crisis is allowing your accountant to develop a cash flow projection for you. Your construction accountant can help you develop both short-term (weekly, monthly) cash flow projections, help you manage daily cash, and long-term (annual, 3-5 year) cash flow projections to help you develop the necessary capital strategy to meet your business needs. Also, a well kept historical cash flow statements help you understand where all the money went. Having an accurate cash flow projection has several benefits and will make many procedures easier for your construction company. The one burning question contractors want to know: When is it income? When money comes into the business, at some point, it turns into income. "Money goes in and out of my business, and I don't understand when it is income and when it is not." Without proper tracking and matching of income and expenses, most construction companies never know if they made a profit until the job is over. The Diagram Below Shows Five Ways Money Comes In Job Deposit - Customer signs a contract and gives the contractor a down payment check - (Not Income) Invoice - Contractor sends the customer an Invoice for the work done, and the customer pays - (Income) Loans - Contractor, outside investors, banks loan money to the business - (Not Income) Refunds - Contractor returns unused material, gets money back - (Not Income) Rebate - Contractor receives a rebate when buying a new truck - (Not Income) The Diagram Below Shows Five Ways Money Goes Out Labor - Payroll and taxes because contractors can make good money with qualified labor - (Not Income) Material - It takes money to make money, and you need material to build and repair things - (Not Income) Other - Costs you need to operate a mobile business like construction - (Not Income) Subcontractors - Do what you do best and outsource the rest - (Not Income) Overhead - Everything not directly related to fieldwork - (Not Income) The Diagram Below Shows When It Is Income Invoice - The only time when money coming in is - (Income) Job Deposit - Applied to an Invoice, the money is - (Income) Customer Payments - Applied to a complex Invoice, it is - (Income) Our services can provide you: Help in obtaining an appropriate line of credit Cash collection acceleration techniques Proven effective collection policies Established effective payment policies Help in getting the maximum rate of return on your idle cash Final thoughts Cash flow is the lifeblood of any construction company, especially those with annual sales volume under $1,000,000. Some construction Company experts even say that healthy cash flow is more critical than your contracting company's ability to complete projects. While that might seem counterintuitive, consider this: if you fail to satisfy a customer and lose that customer, you can always work harder to please the next customer. If you do not have enough cash reserves to pay your suppliers, creditors, and make payroll, then your Construction Company is out of business; game over! 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

    402: Contractor Bookkeeping In Ten Minutes A Day Using QuickBooks

    Play Episode Listen Later Jan 15, 2021 8:42

    This Podcast Is Episode Number 402, And It's About A Guide On Contractor Bookkeeping In Ten Minutes A Day Using QuickBooks

    0401: Hidden Costs When Choosing The Right Construction Accounting Software

    Play Episode Listen Later Jan 8, 2021 11:31

    This Podcast Is Episode Number 401, And It's About Hidden Costs When Choosing The Right Construction Accounting Software Typically, in the first month of the year, many contractors with expensive high-end construction software are re-examining if QuickBooks for Contractors is all they need and if switching over to it makes sense. I chat with Contractors every day. You tell me your stories - about your challenges in running a business, keeping up with the bookwork, estimating and bidding jobs, doing the work and collections from clients, and having or not having employees and paying their taxes.  The first thing we ask is which of The Four Types of Contractors best describes your company? Salt of The Earth Dog And Pickup Truck Professional Enterprise Level Having used several high-end construction software programs costing over $60,000 and a few low-cost programs under $500 like QuickBooks and Peachtree, and some free online bookkeeping programs, I have concluded that for contractors with annual sales volume under $5,000,000, the only answer is QuickBooks For Contractors. For an in-depth comparison of QuickBooks versions, click here. We started using QuickBooks when it was first released in the DOS version in the early 1990s and had been raving fans of it ever since. It's had problems and growing pains; however, Intuit, the parent company of QuickBooks, is right about finding and fixing the issues as evidenced by the number of contractors using it compared to their competitors. What are the five things to consider? 1. Setup This is the most critical and least understood part of the selection process. A correctly set up QuickBooks contractor file will do everything a contractor with less than $5,000,000 in sales will need, including generating reports for: Monthly And Quarterly Tax Returns Sales Tax Returns Payroll Processing Payroll Tax Returns, 941 and 940 Contractor Invoicing Work In Progress (WIP) Reporting Preparing Pay Application Invoicing For Remodel Preparing Pay Applications For Tenant Improvement (TI) Job Deposit Tracking Retention Tracking Insurance Audit Support Service QuickBooks Financial Reports Job Costing Reports Five Key Performance Indicator Reports for monitoring your business And more Setup is the most expensive hidden cost of all. Anyone who suggests the average contractor can buy construction software and have it up and running in less than 200 hours in a span of several months is stretching the truth. There is a big difference between selling construction software and setting it up to use it. QuickBooks Setup Has Three Main Phases: Chart of Accounts, Item List, Customers, Vendors, Employees, Payroll; Clean up the existing data; and input the behind transactions. You can do it yourself = 200 hours x $10 an hour you could earn flipping burgers (opportunity cost) adds $2,000 to the value of the software. Give it to your bookkeeper = 200 hours x $25.29 (Paid $15.00 per hour plus taxes and overhead) adds $5,058 to the software's cost. In most cases, you can outsource the complicated and costly QuickBooks Setup and Job Costing Reports to us, get it done right in a fraction of the time and cost of any other option, and we can clean up QuickBooks existing data and input your back-work or as we call it QuickBooks Catch-Up. From our extensive knowledge base of Construction Accountants and studying highly profitable contractor's QuickBooks setup files, we have developed a library of QuickBooks for contractor modules to build your custom QuickBooks Contractor files in a fraction of the time and at a lower cost. It has made us the leader in setup QuickBooks for Contractors. 2. Bloat The more the software costs, the more bells and whistles it has or, as I like to say, "bloat." Software bloat in construction is deceiving because it looks like something you've got to have or you are missing out; the good news is you're not. It merely adds fluff and filler to jack up the price, just like college and university textbooks sold by the pound. 3. Construction Bookkeepers Talent Pool The more expensive the construction software, the more dependent you will be on the developer for tech support and training. When you pay $1,000 for two days of training for your bookkeeper and their time 16 hours x $25.29 = $404.64 plus lunch $10 x 2 = $20 and parking $10 x 2 = $20 for a total of $1,444.64, they have increased skill sets, and they will ask for a raise or seek employment elsewhere! Worse yet, what if you don't pay for training and they learn by trial and error on your payroll? Do you know What Ten Minutes A Day Costs Your Company? 4. Contractors Bookkeeping Services System Everything in your construction company that makes money follows a process that is called "CONTROL." For example, building a new house is: Foundation | Framing | Mechanical | Roofing | Finish | Clean up. Everything in your construction company that costs money and does not follow a logical process is called "CHAOS." Construction bookkeeping services is a system with a logical process, and when it is followed, you make money; when it is not, it costs you money. 5. Cloud-Based Construction Software Cloud-Based Construction Software Is no longer a luxury reserved for enterprise-level contractors. Any contractor using QuickBooks Contractors desktop version can have it too. We offer a way for you to access the full desktop version of QuickBooks Contractor with all of the built-in reports and the ability to print on your local desktop printer, email, or have documents linked to individual transactions. You can do just about anything you are doing now with QuickBooks Contractor on your desktop except losing your data due to computer failure, weather, earthquake, flood, fire, or other disasters because it is on a secured cloud server with multiple redundant backups and power supplies. You can even access your QuickBooks Contractor financial reports in the cloud without having to open QuickBooks. Final thoughts Consider these five hidden costs when choosing the right construction accounting software for your company. Have a recovery plan if the entire software crashes during updates/upgrades - this will even cost you more money.    The best finish carpentry tools in a golf professional's hands without proper carpentry training will not produce anything near to what a skilled finish carpenter can. The same can be said about the best construction business consulting and accounting tools in an experienced finish carpenter's hands. And I say that with respect and admiration for everyone in construction. 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

    0400: A Guide On How To Provide Year-round Value To Your Contracting Clients

    Play Episode Listen Later Jan 1, 2021 10:55

    This Podcast Is Episode Number 400, And It's About A Guide On How To Provide Year-round Value To Your Contracting Clients Markets are dynamic and continually evolving, so no business can afford to stand still. Many construction business owners have learned that in the last few months as COVID-19 spread around the world. No matter how excellent your products or services, they have a finite lifespan, so they must be developed, improved, or replaced if you're continuing to grow your business. New products, services, and ways of providing more value to your clients and prospects are the hallmarks of a go-ahead business. Improvements and extensions You can lengthen your services' market life through a process of continuous improvement in response to customer feedback. You can also work on extending your range through complementary products or services. However, there's a limit to the extent you can keep on refining, and in many cases – in the end, you'll need something new. Besides, if you are a trade contractor specializing in a specific skill and service, how can you translate your expertise to show that you have your prospective clients' best interest year-round? Steps to take Don't make the mistake of sitting around, waiting for events to overtake you. It's essential to take a proactive approach to identify possible market threats as well as opportunities by: Ensuring you're getting regular market feedback from your customers and others – customers are often the first to tell you that your products are no longer meeting their requirements. Setting up a new service committee of key staff members – meet regularly to review market feedback and gather ideas on improving existing services and potential new services. Attending trade shows (or online events) – can be a great way to open your mind to what's happening in your industry. Seeing what similar businesses are doing overseas, spotting new trends and products, and making new business contacts are great ways of coming up with new products or services. Keeping up with networking – attending conferences, seminars, and industry events (hopefully in-person this year). They're your best sources for finding out if any government grants or initiatives are coming up. Make the most of the Internet Online research is one of the easiest, cheapest, and most effective ways to keep your ear to the ground about what's happening in your industry, and it's a great source of inspiration when it comes to new ideas. If you don't have the time yourself, appoint an employee to monitor things like: Social media platforms and channels – signing up to relevant Twitter feeds, Facebook pages, and LinkedIn are all excellent ways to stay up-to-date with what's happening in your industry. Subscribe to RSS feeds – again, it's a useful tool that helps you keep your ear to the ground about what's happening. University and other academic research – papers are often published on the outcomes of the latest research and development, and in many cases, they're free to read. While you learn and grow, you can now share new information and develop different strategies to serve your clients and prospects. Here are some content ideas you can share - online (website, blog post, podcast, and email) or offline (marketing materials like brochures, flyers, and newsletter): Client Interviews Testimonials are one-sided and usually a short text of how you performed. Take it up a notch and make it a Q and A post: Why did they hire you? What processes have you been through together to come up with a successful plan? This would deliver an impactful message to your audience. How-to Guides Imagine a mother's anxiety before a significant renovation; add her full-time job and her family's needs to that. If you can address most of her concerns before wreaking havoc inside their home, that's value right there. Example: How to Prepare for a Kitchen Remodeling Project Checklist Write about safety and procedures, your daily inspection, or task reminders on what to do. Guide By creating a handbook post, you tell prospective clients the qualifications of an expert (insert your particular trade) contractor. This is a subtle way of showing your mastery and skills without being "salesy." Example: What to Look Out for Before Hiring a Capet Installer Biggest mistakes/lessons Nobody wants to talk about their failures, but your takeaways from these failures lead you to step up your game plan. Example: My Painting Job That Went Horribly Wrong Tips and Tricks Helpful and bite-sized information. Whether you're talking about using a manual tool, choosing the right paint color, etc. Tutorial with Video Demonstration They can probably search this on YouTube, but it doesn't mean you cannot make one. This is part of positioning yourself as their "Go-to person." Telling your clients you know how to use your tools is one thing; showing them how is another. FAQ What are the most common questions you've been asked? Is it about how you deliver your services? What time of day can they expect you to show up? Start taking notes of what your clients are asking or telling you. These little details can make up for an informative blog post. Share a list of online resources related to your services Example: 10 Inspiring Minimalist Bedrooms Event Recap Have you participated in a trade show? Attended an industry conference or a marketing event? It shows your keeping up with the industry standards and best practices. Always remember - for every marketing material that you produce, think about your purpose and how it will benefit your target audience regardless if they hire your services or not. Final thoughts Providing value to your clients tells that you are serious about your construction business; providing it year-round builds your relationship with them, establishes your credibility in your local neighborhood, and makes you the "go-to" person in your particular industry.    As we welcome the new year, I'll leave you with a simple Randalism that you can put into practice every day: Be. Do. Have. Be the person. Do the work. Have the results (or peace of mind).     We believe contractors deserve to be wealthy as you add value to people's lives. If you believe it too, it will happen regardless of whose services you engage, including ours. Celebrate Life for every day is a good day no matter what happens; tomorrow is a new day.    Happy New Year!

    0399: Smart Contractors Spend Money On Marketing, Accounting, And Production

    Play Episode Listen Later Dec 25, 2020 8:07

    This Podcast Is Episode Number 0399, And It's About Smart Contractors Spend Money On Marketing Accounting And Production There is no better time to reflect and think seriously about your construction business. Excellent organization systems add considerable value to any business because they allow you to spend more time working on your business rather than on it. Year over year and regardless of the economy, one thing never changes; 20% of the contractors earn and keep 80% of the profits because they have a Business Process Management Strategy like our Contractors Success M.A.P. that tells them how, what, when, where and why to focus their limited resources on the M.A.P. = Marketing / Accounting / Production. As a construction company owner, investing your money in these three things can immensely help your business and help you protect it from slower times: Marketing Many construction business owners think marketing is about finding clients today, but a good marketing strategy looks to the future. Just because your business is busy today doesn't mean it will be tomorrow, and if you only focus on your marketing when things are slow, your downturns will last longer than they should. Unfortunately, too many construction business owners only gear up their marketing efforts when business slows down. By then, it's too late. No matter how busy you are today, marketing should be one of your financial priorities. It would be best if you marketed yourself today to ensure clients tomorrow, next week, and next month. Spend your money on a proven marketing strategy that draws customers in, and you might be able to avoid future downturns or at least stop them from lasting as long. Stop, Look, Listen And Think - Understand the impact of the 80-20 Rule for contractors 20% of your customers usually generate 80% of your net profit.  20% of the goods or services you sell contribute 80% of your revenue 20% or 2 out of 10 of your staff create 80% of your customers' value. Accounting (Administrative Tasks) There's a lot to running a business that can be outsourced. Yes, outsourcing costs you money. But it also saves you valuable time and energy. It may also prevent needless headaches. There are many service providers out there that offer valuable assistance, freeing up your time for the things you love to do and are more skilled at. You can outsource your payroll, invoicing, bookkeeping, accounting, legal advice, and marketing. You can even hire an administrative assistant to help you with day-to-day business tasks. These outsourced service providers are specialists in their field and can provide you with the services you need when you need them. If you're not an expert in those fields - primarily legal and accounting - outsourcing those tasks can prevent costly errors. Your time is valuable. Spending money so someone else can take care of the mundane tasks you dislike is worth the expense. Production (Employees) Your business is nothing without your employees, and happy employees are more productive, motivated, and loyal. Smart construction business owners know that it's worth spending a little extra money to ensure you have the best employees on your staff and reward them for their hard work.  When you can, spend money on your employees. Offer bonuses or gifts for meeting their goals or exceptional service, provide better-than-average benefits plans, give them opportunities for training, or increase their salaries. Happy employees give more to your business. They reduce the turnover rate, saving you the cost and headache of finding and training new workers. Plus, your clients and customers like seeing consistency in your staff, so they'll appreciate that you keep your workers happy. At this point, you have some basic operation manuals in place for your field and office employees. It is the document that answers the same questions you will be asked 100's times. It is the Wikipedia of your company. "This is Who We Are, And This Is How Things Are Done Here." Final thoughts Smart construction business owners know there are a time and a place to spend money. Spending your money in intelligent ways saves you time and energy. It can even save you money in the long run by reducing turnover and preventing expensive mistakes. Consider whether you could help your business, and yourself, by spending money on your employees, marketing, or administrative tasks. Now, you have a road MAP to success, and all you have left is to assemble the tools, equipment, and staff to set up your trucks and vans and go to work! And of course, treating everyone a little nicer will make the challenges of the day go easier. I invite you all to join me in the Celebration of the Holiday Season, of Living Well and being Happy. Merry Christmas to all! 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  

    0398: How To Avoid Overpaying Your Construction Business Tax

    Play Episode Listen Later Dec 18, 2020 8:17


    This Podcast Is Episode Number 0398, And It's About How To Avoid Overpaying Your Construction Business Tax Contractors want to maintain control without making any changes. "Keep doing the same thing but expecting a different result."  Throwing the receipts in a shoebox (behind or under the seat in the truck) is the favorite way to deal with paperwork. This is "Under Managing" and frustrates everyone around them who is playing "Where's Waldo?" Job costing is nonexistent; bills are usually paid late, customers are unbilled, lost, and forgotten. On the other hand, micromanaging every detail is an over-reaction from years of doing as little bookkeeping as possible to prepare the tax return. Knowing what to do, however, will stop you from making a big mess of it. Year-end phone conversations are usually out of frustration.  Contractors will call and say: I can't get any reports I don't like the reports I am getting My tax accountant is not answering all of my questions How can I improve my business? In-house bookkeepers will call and say: Bookkeepers inherit the "CRAP" from everyone who worked in QuickBooks before they arrived and are expected to produce useful reports. Bookkeepers are expected to use: Old Equipment One Or Two Tiny Monitors Dot Matrix Printer (or equal – the noise an old printer makes when printing is unforgettable) Frustrated Spouses Call Me because spouses usually get "Seagull Management" from the Contractor. The in-house Bookkeeper gets that and "Zap Management." That is when people learn what to do by doing something wrong and getting "Zapped" by the Contractor in the form of an insult or nasty comment, and the process continues until the Bookkeeper shuts down and doesn't do much or anything at all. Under both styles, the core problem does not lie with whoever is doing the Contractor bookkeeping. The source is the Contractor and how the Contractor thinks about their business. How the Contractor reacts at the moment to a crisis? Making dozens or hundreds of decisions (moment by moment activity) every day is part of what being a Contractor is all about. In a way that non-contractors or even their employees do not understand. Embrace it, and decisions will come easier.    Simply put - the wrong Bookkeeper will cause you to overpay your taxes.  Your tax bill is based on reports produced by your accounting system. The old saying garbage in = garbage out is absolutely true here. Only it means Garbage In = You Overpaid Your Taxes!  If your Bookkeeper is an Untrained Bookkeeper who attended a one-day seminar, watched some videos, took an online class, spent a few months working in an accounting firm, or is self-taught and believes in learning by experience (this means when they make a mistake, you get to pay for it) then you almost certainly are spending a whole lot more in taxes than you should. 10,000 Hours Of Practice Are Required - To master a skill, according to Malcolm Gladwell, the author of the book "Outlier." His book has examples like the Beatles playing nearly 10,000 hours together in Germany before they emerged as "The Beatles," Tiger Woods invested 10,000 hours on the golf course before turning 21, Bill Gates as a kid put in 10,000 hours on his PC. Professional Bookkeepers - Are people who have invested at least 10,000 hours in practicing and learning their trade because that is what it takes at least that long to become a master construction bookkeeper. We scan your receipts and invoices and give you back a "CPA-ready packet for your tax return." If your Bookkeeper put all those receipts in as expenses, you could be overpaying your taxes by at least $5,000 and probably more. Putting receipts inside QuickBooks is easy! Putting them in the right account, so the reports are accurate, the business owner can trust them, and when the taxes are filed, you will pay the least amount possible - that is where the professional Bookkeeper earns their money. Final thoughts If you think your Tax Preparer - will catch the bookkeeping errors, think again! That is not what they are paid to do! Most of them are paid on commission to prepare as many tax returns as fast as possible! This means most of them will not spend the time and effort to review the details of hundreds or thousands of transactions to make sure the amounts have been put in the right accounts.  You don't have to go through this alone. We can help you a little or a lot depending on your construction business needs. Let me know how I can help you by filling out the form or reaching out to me. 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


    0397: The Value Of Time And Bookkeeping For Construction Business Success

    Play Episode Listen Later Dec 11, 2020 7:33

    This Podcast Is Episode Number 0397, And It's About The Value Of Time And Bookkeeping For Construction Business Success Keeping track of sales, earnings, expenses, and purchases are fundamental to your construction business's overall health and sustainability. Effective bookkeeping produces the data you need to evaluate your current practices, anticipate challenges, and set attainable future goals. But despite their proven importance, many business owners dread and avoid accounting tasks. Smart Contractors know their time is more valuable spent meeting prospective clients, putting together bids, managing job sites, and many other things other than bookkeeping. So they find someone else to do it.  Any bookkeeping and accounting firm that does not know how to calculate complex algorithms that take into account fluctuations in the workload and generate a monthly fee that is fair to you and them they need to go back to school and take those courses on Decision Modeling, Statistical Analysis, and Business Process Management. All Professional Construction Bookkeeping and Accounting Services have formulas for calculating fee structures. It is not rocket science, but it does take a deep understanding of accounting: How many employees do you have? From that, we know how much time and effort it will require to process payroll and do the tax reports. What type of construction do you do? New, remodel, service, residential, commercial? From the number of employees and the kind of work you do, we know how much time and effort it will require to do all the bookkeeping, bank and vendor reconciliations, and the rest. Because we have a system. Wondering if it's really worth the aggravation? Here are three reminders of how effective bookkeeping is and why it is the cornerstone of small business success. Keeping track of reimbursable expenses  A reliable system for tracking reimbursable expenses ensures you reap all the benefits you're entitled to when filing your taxes. Expenditures sorted into categories, such as "food," "travel," and "office supplies," can be cataloged quite merely using our LMOS system - Labor, Materials, Other costs, Subcontractors, granted that your construction bookkeeping is set up correctly. Using a dedicated credit card for business expenses, and updating your records every month, will put money back in your pocket come tax time. Measuring profitability and planning for the future To grow your business, you must track and compare its finances from one year to the next. In addition to reconciling the books and bank statements every month, effective bookkeeping generates records you can use to gain a comprehensive overview of your business. This data can help you: measure year over year profits; identify opportunities to cut costs; plan for major expenses (such as new office space, equipment, or staff); and develop data-based strategies for expansion. Preparing for tax season Few things are more stressful for business owners than scrambling to get poorly maintained financial records ready for tax season. In addition to the panic of last-minute filing, inaccurate or incomplete documentation can lead to severe penalties, fines, and even an audit.  Save money and get peace of mind with sound bookkeeping. You'll be assured of compliance with regulations and will receive a reliable estimate of amounts owing long before your tax bill is due. Final thoughts Most contractors are passionate about developing new business ideas – not crunching numbers. Not to mention your daily workload is stacked high up with not enough time to deal with it. Outsourcing a professional bookkeeper, even on a part-time or as-needed basis, can help optimize your accounting and increase overall profitability. Do what you do best because your time is valued more than anything. It's well worth it. Invest in effective bookkeeping, and you'll build a solid foundation for a resilient, forward-moving construction business.  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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