0191: Contractors Need Bookkeeping Beyond Get Me By

This Podcast Is Episode Number 0191 And It Will Be About Contractors Need Bookkeeping Beyond Get-Me-By

Picking A Get Me By Contractor’s Bookkeeping Solution in many cases is using an Excel Spreadsheet and a shoebox, file folders all dumped into a file box and looking at the Online Banking once in a while. This accounting method is the “I still got money so I must be okay.”

When You Are Using Today’s Job Deposit To Pay For the material, labor and subcontractors from the last job. It is also known as “Rob Peter To Pay Paul” Cash flow is never a problem until the sales stop; then it doesn’t matter if it is the economy (you customers get laid off), domino effect (their customer didn’t pay them) or you are unable to work due to being hurt on the job or get sick (flu or a more serious illness). 
 

Problems Arise When You Want To Do Any One Of The Following:

Get a Line of Credit at the bank to expand or buy equipment Attempt to get a commercial lease for equipment Setup a 30 Day account at a major supplier Buy a new vehicle for personal or for the company Buy a new house or Refinance existing home Answer questions on Liability Insurance Audit

During The Insurance Audit

The insurance company may want copies of quarterly and monthly tax reports. The Low Premium is based on “low sales” and “low payroll”; at audit time it is the adjustment in the “Actual” Premium. If all the numbers are equal or less, there is not usually a credit. To verify income Insurance Company is going to want to see copies of State Revenue Reports and any payroll reports.  

State Agencies May Want To Do An Audit On Your Business

Some states suggest you get a “Voluntary Review.” Depending on the auditor this may go smoothly. In other cases, it can turn into a full-blown audit. The audit can have a date range of several years, not just the current or previous year. In addition to Quarterly Tax Returns, you, the contractor can be asked to provide the Check Register, Customer Invoices, Employee Timecards and Paystubs, plus the State Revenue and State and Federal Payroll reports. In other words; they want everything to cross check what you told one agency over another. State agencies are looking at your customer and vendor list to add to their list of companies to go after next.

Banks Want Detailed And Summary Financial Statements

Bank wants current and year to date financial statements, and previous year’s tax Federal Tax Returns. The loan officer will in most cases ask for the application and financials be provided even when they know that the bank is not lending to anyone for whatever you are asking for. (Example: Working Capital). See Unique Construction Company Financing Secrets Revealed.
   
The Application Process Can Be Many Pages Long

And they can feel very intrusive. Before you invest time and energy - Verify The Bank Is Lending To Contractors. Then ask is the Bank Lending For Working Capital, Vehicles, Equipment or Whatever you need the loan for. What is the debt to income ratio’s and more? Don’t Be Afraid To Ask: What is the bank looking for to be able to say YES!

Tax Accountant Uses your “Get Me By Documents.”
When your Construction Company is small, you may find a tax accountant willing to take your “Get Me By Documents” and do a work around to file your taxes. Don’t expect them to do that Year, After Year, After Year when suddenly you have grown to make over $100,000 in sales and above. They have the reasonable expectation that you are getting it together and if you don’t then the burden of finding all of your deductions is not on others. Every missed receipt may be a business deduction that is missed and causing you the Contractor to pay more taxes than necessary.  

Get You By Contractor’s Bookkeeping Can Be Easily Solved
We have clients who are Brand New Companies that are Weekend Warriors, Handyman, Trade Contractors and General Contractors. In this economy, many seasoned contractors had larger companies and are now starting over. The staff that used to be there and the specialty software to run their business is gone. QuickBooks Desktop is a good program to meet the needs of Contactors

We Recommend QuickBooks Desktop In The Cloud as the program that works. It’s like getting a ¾ Ton Pickup with a full-size bed – You know it will work to put a rack on, go to the lumber yard for  4’ x 8’ sheets of plywood, tow a trailer to go to the dump and many other things. Many contractors use what they have, to begin with, but then need to upgrade. An Accounting System can be the same way. The “Get Me By” method isn’t the solution once you move from the world of seeing if being a contractor is what you to want to do and changing your mindset to doing it a “real contractor” and having a real business.   

State Governments Are Always Looking To Increase Taxes
We are located in Washington State. Currently, Washington State does not have a State Income Tax. What we do have is a Destination-based Sales Tax with special rules for Contractors to follow. It is a really big deal to determine What is Income, When is it income and Where is the customer located. A properly setup QuickBooks file with all of the State of Washington destination codes (city, county) makes that process much easier. Other states have their own rules about sales tax if it is required.

There Are Many Reasons To Have Good Accounting. For the contractor the most common questions are:  

Am I Making Any Money? Did this Job Make Any Money? How Much Should I Be Charging? Should I Add Employees? Can I Budget A Big Purchase? Can I Take A Vacation? Can I Afford For My Spouse To Quit or Reduce Hours? Is Being In Business Worth It? 

I Would Like To Say “It’s Always Worth It” To Be A Contractor – But Sometimes It’s Not.
If you hate to meet people, talk on the phone, estimate jobs, do the work, maybe have employees.
Then it is possible that being in business for yourself is not one of your life goals and you did it because you had to not because you wanted to. If this is the case: Be a Career Changer and Do Something Else.    

One Of The Things Is To Figure Out “What Do I Like To Do?” Determine it you are good at then see if you can Outsource the parts that are not working. For most Contactors, the Bookkeeping falls into the “Icky” part of owning a business. It seems never-ending and tedious; if this is you. We Can Help! With the weight of the “Icky” stuff off you may find that being a contractor is “Fun Again.”

I trust this podcast helps you understand that outsourcing your contractors bookkeeping services to us is about more than just “doing the bookkeeping”; it is about taking holistic approach to your entire construction company and helping support you as a contractor and as a person.

We Remove Contractor's Unique Paperwork Frustrations

We understand the good, bad and the ugly about owning and operating construction companies because we have had several of them and we sincerely care about you and your construction company!

That is all I have for now and if you have listened this far please do me the honor of commenting and rating podcast www.FastEasyAccounting.com/podcast Tell me what you liked, did not like, tell it as you see it because your feedback is crucial and I thank you in advance.

You Deserve To Be Wealthy, Because You Bring Value To Other People's Lives!

I trust this will be of value to you and your feedback is always welcome at www.FastEasyAccounting.com/podcast

This is one more example of how Fast Easy Accounting is helping construction company owners across the USA including Alaska and Hawaii put more money in the bank to operate and grow your construction company. Construction accounting is not rocket science; it is a lot harder than that and a lot more valuable to construction contractors like you so stop missing out and call Sharie 206-361-3950 or email sharie@fasteasyaccounting.com

Contractor Bookkeeping Done For You!

Thinking About Outsourcing Your Contractors Bookkeeping Services?

Click On The Link Below:

www.FastEasyAccounting.com/hs

This guide will help you learn what to look for in outsourced construction accounting.

Need Help Now?

Call Sharie 206-361-3950

sharie@fasteasyaccounting.com

Thank you very much and I hope you understand we really do care about you and all contractors regardless of whether or not you ever hire our services.

Bye for now until our next episode here on the Contractors Success MAP Podcast.

Warm Regards,

Randal DeHart | Contractors Accountant

Our Workflow Removes Your Paperwork Frustrations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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