Discover the benefits of full cycle book keeping for Edmonton contractors.
The construction industry presents a number of unique challenges when it comes to business management: new customer requirements during a job (change orders), synchronizing labour schedule with material delivery, contract disputes, bad weather, time management and financial management to name just a few. The financial management side of the business, which include mostly but not only job costing, managing your cash flow, payroll, sending checks to suppliers and collecting money from your clients, is considered by most business owners to be nothing more than a headache. Most contractors have limited administrative experience or any. Therefore many treat this aspect of the business as lower priority, and this alone can impact negatively on your success.
When a contractor takes on a project, that job is usually long term by nature and is subject to many uncertainties and risks. For a project to be considered successful, it must be finished on time, on budget, profitable and have a happy customer in the end. Many contractors succeed to deliver project on time and as per their customers' requirements. Unfortunately by talking to contractors, a lot of them cannot assess with certainty that their budget was respected and most important if it was profitable! I don’t have to convince anybody by stating that to make sure a company stays in business, they need to be profitable. In the construction industry, you increase this probability when good accounting practices are in place. It is perceived as a vital component to the businesses success and required to be implemented on a regular basis.
So what is the benefit of full cycle over catch up bookkeeping in the construction industry? It allows a business to see how well the project is doing at any given time. Management will be able to see what the accumulated costs are to date, project the time and costs needed to complete the job but most importantly, use the information to take corrective action if needed to change or improve the outcome, especially if a job is headed for financial trouble. It is very difficult and most often too late to turn a project around once it is headed south.
One customer of mine, who was a general contractor for residential and small commercial projects fell victim to this all too common problem. He hired me to do catch up bookkeeping so obviously he never implemented regular bookkeeping practices in his business. After showing him the numbers and explaining that overall he showed a financial loss for the year, he said “ I knew it, I had a feeling that the project wasn’t going well, but there were too many issues going on, I was overwhelmed, it got out of hand and I didn’t know to stop it. So I finished the job and it cost me a lot personally.”
Full cycle bookkeeping can also provide valuable information to the contractor after the job is complete. By knowing what went wrong and what went well, companies can avoid issues or re-create the experience on the next project. It allows contractors to think forward strategically on future work and bid responsibly. No longer will businesses underbid and work for free.
Truebooks provides full cycle bookkeeping services that frees you from time consuming tasks. We can help you track fixed assets, supplies, and materials. We will keep accurate records of your accounts receivable and accounts payable. We can even assist with managing your tax liabilities and payroll, and reconcile your bank statements. These tasks are our specialty, and we are happy to help you experience the benefits that come from personal service.
To discuss your bookkeeping needs, call (587) 805-0808.
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