5 bookkeeping tips for construction businesses
Businesses in the construction industry have a set of unique challenges. As they regularly have the unique experience of working with a range of employers, partners, extra contractors, businesses and individuals, all who have different payment schemes. Due to this, the books can become complex, and so, bookkeepers for the construction industry need to be vigilant and knowledgeable to accurately calculate and report on incomings, outgoings, tax, super, and other benefits.
Despite its complexity, bookkeeping for construction is vital to ensuring the success of your business. So, what can you do to make it a far simpler process?
Why is bookkeeping in construction different?
Bookkeeping in construction has to deal with a unique set of requirements in order to provide the best benefits to construction businesses. It is important that when doing your bookkeeping, you or your bookkeeper understand the following differences:
- Construction is project driven. These projects are often scattered, occurring across multiple different sites. Each of these sites may have differences in wages, equipment and transport costs.
- Contract lengths vary and payments can lag.
- It is vital that costs are accurately tracked to each project.
- Plans can be changed abruptly, so these changes need to be tracked. Certain changes in the scope, design, site conditions, or even schedule could make or break the budget, so it is vital that these are tracked.
1. Don’t be afraid to ask for help
The financial operations for your construction company can become complicated quickly. When it does so you should not be afraid to ask for help. Outsourcing your bookkeeping to keep your financial records on track is the best way to find the help you need. They will ensure that every process is performed accurately and meets all obligations, taking a lot of work off your shoulders.
With a professional bookkeeper who specialises in small business bookkeeping and has experience with the construction industry, you can find the help you need. A professional bookkeeper will help you avoid losing track of your expenses. This will allow you to focus on your business, rather than your bookkeeping.
2. Keep in the loop of your business
As your business grows and expands it may become increasingly difficult to stay in the loop as your business gets busier. Often owners will take on a more managerial role, shifting focus from smaller operations to the bigger picture. However, small changes on projects like changes in orders, contracts and plans can come suddenly, messing up your budgets and financial records. If you are out of the loop with the smaller aspects of your business it can be extremely easy to miss these.
A great way to ensure you don’t miss these changes and have all projects in sight is by using a digital tracking system for your projects. Ultimately, to keep in the loop about your ongoing and upcoming projects you need great communication and organisation. However, digital project management tools make this a lot easier, allowing your site managers to keep the system updated informing you and your workers as to what is happening and when.
3. Use a digital trail
Using digital programs in your business can extend beyond project management. You can also go cloud based for your financial reporting as well. This can save you a lot of time and effort, helping you in meeting your financial obligations, keeping records for the required 5 years (and often longer if required). Everything is in one place, allowing you to access it online from any device, so you can manage the financial side of your business at any time. The trick is to find the right accounting software to make this possible.
4. Find the best accounting software for your purposes
Cloud-based accounting software has the power to make your bookkeeping far more seamless and simple. It provides a virtual hub for all things financial in your business, allowing you to manage your payroll, send invoices, and manage expenses. We believe the best software for any construction business is Xero. It makes accounting and bookkeeping simple with an easy to use and understand interface, powerful automation tools, and bank level security. If you need assistance setting up and learning how to use Xero, we can help you out.
5. Find a great bookkeeper
While we touched on the benefits of outsourcing your bookkeeping to a professional bookkeeping firm, the key to realising these benefits is to find the right bookkeepers. The best bookkeepers feel like they are apart of your team. Despite being outsourced they should be responsive, cooperative, and always ready to help, as if they were a part of your team. You should love the work they do, and reap the benefits. That is what we strive for with each of our clients. If you want a great bookkeeper, reach out to Link Books.