10 Website Examples for Construction Bookkeepers & Accountants

There are some key differences between contractors and employees, and it’s good practice to familiarise yourself with these. Those are just a few benefits that an excellent bookkeeper can bring to your contracting business. Savings, improved efficiency, actionable data, and managing growth are all benefits that take your business to the next level. Your bookkeeper helps you make the right decisions, see the entire business picture and catch problems while they are still small. Red Flag #5 Time Billing Only – Professional Bookkeeping Services charge a flat monthly fee for services. Only someone who does not know what they are doing still charges by the hour.

Proper bookkeeping is a skill and professionals work for years to learn the right methods and strategies for efficient record-keeping that satisfies all the necessary legal and financial requirements. That being said, you can perform the services you need by staying organized and researching some tried and tested methods. If you plan on doing your bookkeeping yourself, here are some of the best bookkeeping construction tips to familiarize yourself with.

How does construction bookkeeping differ from bookkeeping in other industries?

Customers send referrals, your rates keep going up, and people come to you knowing they’ll get fantastic quality and service. Contractors are great at what they do, but bookkeeping isn’t a part of that mix. Having an excellent bookkeeping service isn’t just nice but essential to your profitability and keeping things running smoothly. Let’s cover a few reasons why an expert bookkeeper is someone you need right now.

Then include a second set of numbers that reflect the retainage value which should be shown as a credit. Every small business needs a bookkeeping system that takes into account all the variables that make that business unique. If you do not accurately bid jobs, measure profitability upon job completion, identify mistakes, and perpetually improve bidding accuracy then you are missing out on huge profitability potential. When you’re ready to lower your taxes, build pristine financials and focus your staff with useful reports and dashboards, then connect with us for a free consultation.

Bookkeeping for Contracting Businesses – What Canadian Contractors Need to Know

Operating as a limited company can be more tax-efficient, which is why it’s crucial to be aware of the IR35 rules we mentioned earlier. Having HMRC breathing down your neck can feel overwhelming, but keeping your accounts up-to-date as you go makes life, and tax, a whole lot easier. This is great if you’re just starting out, so you can hit the ground running with clients (without having to deal with quite so much admin). An Umbrella company will ‘employ’ and be the intermediary between you and your clients. This means you can’t just keep any profits, so you’ll need to decide how to pay yourself.

If you do not file your profit and expenses, you are putting yourself at risk of being audited by the IRS. Anytime you complete more than $600 of work for a law firm bookkeeping client, they will need to file and send you a copy of Form 1099-MISC. This is an information form for filing to send non-salary income numbers to the IRS.

Never Mix Personal Expenses with Business Expenses

More often than not, part of your duties will require that the bookkeeper train managers to communicate in a way that jobs and projects accurately reflect what is supposed to be recorded in the books. Proper bookkeeping in construction is limited by the quality of information that the bookkeeper receives. Given that the multiple classes are required, we recommend QuickBooks Desktop for construction businesses. QuickBooks Online, though more accessible, has the pitfall of not allowing the bookkeeper to create complex classes and reports that may be required for contracting companies. QuickBooks Online, on the other hand, has a limited number of job costing reports, report filters, and WIP reports. Again, as a bookkeeper with complex projects, reports on jobs classes need to be able to be filtered to be able to make meaningful decisions.