Bookkeeping is a must.
If you want your business to succeed even in the most unpredictable of circumstances, proper bookkeeping will keep your business intact and expose areas for growth.
But for contractors, builders, and various tradesmen, bookkeeping is especially important.
Why YOU Need an Organized Bookkeeping System
As you know, the financial aspects associated with the work of a contractor, builder, or tradesman, can be more complex than other professions.
For example, the work usually takes place in multiple locations on various job sites, which means that equipment and labor are often on the move. This incurs mobilization costs which must be tracked with each job to get an accurate picture of the business’ cash flow operations.
Another instance that would require an organized bookkeeping system is when receiving income. For contractors, builders and tradesmen, the bulk of the work is often project and contract-based, which means that it could take weeks, months, or even years until a job is complete, unlike most businesses. Therefore, it would be beneficial to keep good records of all invoices and expected income to have a good understanding of your business’ cash flow. This ensures that there is enough money for you to pay yourself, pay your employees and pay for equipment and future jobs.
But don’t be fooled – while these points seem elementary, we’re merely skimming the surface of the importance of bookkeeping systems for contractors, builders, tradesmen, and the like. So here are our top bookkeeping tips and practices for you!
Top Bookkeeping Tips for Contractors, Builders, and Tradesmen
1. Track company bills
You likely have a lot of bills to cover job costs and materials. We recommend keeping track of these expenses by category. These expenses can include, but are not limited to:
- Repairs and maintenance for equipment
Recording the bills (payee, payment date, etc) will help you stay organized and potentially help you find deductions that will reduce your tax liability for the following year!
2. Track invoices
Because you will likely have multiple invoices sent out at once, it is good to track invoices as they are sent out and received to ensure that you are getting paid for your hard work.
3. Use a secure, cloud-based software
The days of paper receipts and invoices are long behind us. By using a secure, cloud-based software you are sure to access your files whenever and wherever you are. And you’ll be confident that you won’t lose or damage them.
For many of you running successful businesses, you may be overwhelmed by the aforementioned information. And that’s to be expected!
As a business owner, you’re not supposed to do EVERYTHING. To complete the tasks you’re needed for the most, you must take some tasks off of your plate.
That’s where we come in!
Why not schedule a free consult with David Alfano, CPA? At no cost to you, together we’ll determine what aspects of your business we can take off your plate.