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Given the numerous details that pass through a GC business, impacting both the bottom line and IRS requirements, it is essential to hire an experienced Bookkeeper and ensure all these necessary tasks are being completed.
I will use two examples of businesses that we've helped where when we took over the books, the company became more compliant and knew exactly where they stood financially.
In the first example:
A remodeling contractor who became a GC, used to have his books with his Accountant who did his taxes. The problem with that was, we didn't know what the financial scene looked like because it was never updated and more than just the regular transactions needed to be tracked because it was a remodeling business.
We assumed responsibility for the bookkeeping, revised the Chart of Accounts (used for categorizing transactions and creating bank accounts), and updated the financial data on a weekly basis. We introduced a job profit tracking sheet, established a collection process and policies, and developed a system for estimating and invoicing using QuickBooks until we eventually implemented a comprehensive project management software. These enhancements enabled us to oversee the entire financial picture, increase pricing, eliminate discrepancies, and ensure timely payments.
These enhancements enabled us to oversee the entire financial picture, increase pricing, eliminate discrepancies, and ensure timely payments.
In the second example:
Once more, we removed the bookkeeping from their CPA because the tasks were not handled regularly, preventing the owner from accessing current financial information needed to manage his business effectively.
We transitioned from using a Word document for estimating to a template we created in QuickBooks, which streamlined the process. We reduced QuickBooks costs by $65/month by switching the payroll company and downgrading QuickBooks, as he was paying for unnecessary features that we could handle in a Google Sheet. We also reorganized the Chart of Accounts to provide clearer insight into income sources and detailed the expenses for more effective reporting. Additionally, we set up the tracking of contractors for 1099s in Quickbooks and implemented a process to immediately collect paperwork from new contractors, avoiding last-minute issues at year-end.
We reduced QuickBooks costs by $65/month by switching the payroll company and downgrading QuickBooks, as he was paying for unnecessary features that we could handle in a Google Sheet.
In general, with general contracting and remodeling businesses, there is more to monitor compared to a typical business because of the ongoing projects and their specifics. This is why specialized bookkeeping for GC businesses and an expert bookkeeper are essential. Some companies are willing to invest in high-end project management software to assist with this, and we can recommend those options. However, for smaller businesses, it's more cost-effective to develop our customized systems using more affordable resources.
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