Keeping track of your accounting for your construction business seems like a lot of work at times.
The list of different numbers you have to keep track of seems endless at times. There’s payroll, material and inventory, tools and machine costs, and more.
It can all be a bit overwhelming at times.
However, keeping good track of your accounting is essential for the success of your construction business.
Here are some of the issues you can run into if you’re not keeping tabs on your accounting.
Money May Be Lost
One of the biggest struggles for a small construction business is making sure that they are getting paid for all their jobs.
By maintaining clean books, you can easily see which jobs you’ve completed and have been fully paid vs. those that have been completed but the client still owes you money.
If you’re trying to keep track of who and who hasn’t paid you without implementing proper accounting techniques, it can be easy for payments to slip through the cracks. Remember, it’s not up to the homeowner to make sure that they have paid you everything they owe. That responsibility falls on you.
In addition to this, there are some crucial numbers that you should keep tabs on when it comes to tax deductions. For example, you’re probably aware of the tax deductions you can get for driving to a client’s location.
Well, if you’re not keeping accurate records of travel, then you’re likely won’t see the tax deduction you actually deserve.
It Will Be Difficult to Grow
Keeping your finances and accounting in order is a key part of being able to grow and expand your construction business.
Thinking about trying to move to a bigger office? If your accounting methods are lackadaisical at best, then how are you going to determine how much money you have for the upgrade? It will be extremely hard to figure out if you have the funds necessary to pay for an increase in rent.
In addition to this, you’re not going to receive any business loans from banks if your financial records are out of order.
Oh, and good luck bringing in new talent, as people tend to not want to work for a business who aren’t on top of their operations – especially when it comes to the money your business is taking in.
You’ll Have a Field Day With Taxes
Unless you have a CPA savant on retainer, completing your taxes without updated and well-maintained accounting records of the past year will be extremely time-consuming.
Either you’ll spend a significant amount of time trying to track down all your records over the course of the past year, or you’ll hire a bookkeeper to do it for you — which can be very costly due to a large amount of time and effort they’ll be putting in to clean up your books.
So, keep up with your accounting, or tax season will become a living hell for you (Okay, maybe not that bad…but it certainly won’t be fun).
You’ll Be in Trouble if You’re Audited
No one ever thinks they’ll be audited. But, the thing is, it has to happen to someone — and your construction business has just as good of odds as anyone else.
Having accurate records is a must if you ever get audited. If you’re found to have paid fewer taxes than you should of due to mis-understating your income, for example, you’ll be charged hefty fines to make that up.
How 24hr Bookkeeper Can Help Keep Your Constriction Accounting Books in Order
Are you having trouble with your construction business’s accounting? Don’t worry, you’re not alone.
Many business owners struggle to manage their finances and accounting while simultaneously working to produce the best results for their clients.
That’s why they turn to outsourcing some of their accounting to third-party accounting companies.
Here at 24hr, we can update your financials, take care of your monthly bookkeeping, and even train you in QuickBooks Online.
Take a look at our full list of services to see all the ways we can help take your accounting to the next level!