Ledgers, job costing, overhead costs. The “to do” list for a construction executive can feel neverending. That is why bookkeeping and accounting for a construction business is a sore spot for many construction companies — especially those just starting out who are not ready to hire a full accounting team.
But despite the time and energy it takes to keep up with your business’s bookkeeping and financial management, accurate bookkeeping is essential to running a successful construction business.
If you need a little bit of administrative support with your construction accounting and bookkeeping, Virtual Construction Assistants can recruit, hire and onboard virtual assistants to help with your construction bookkeeping. You can grow into a successful construction company in no time with the right construction accounting help.
Not sure where to start? Let’s walk through the importance of bookkeeping and accounting services for your business and some bookkeeping tips for construction firms.
Why Bookkeeping Matters in the Construction Industry
Let’s start with the basics — Why is bookkeeping even important in the construction industry?
Whether you are in the construction business or not, running a business requires clear reporting and tracking of your business expenses to make sure your business is profitable and your financial recordkeeping is accurate.
If you are not tracking business expenses or cash flow, you can lose money on your construction projects and overhead costs for your small businesses without even realizing it. This can lead to incorrect job costing, loss of profit, and overall poor business management. No business owner wants that!
If you are not sure where to turn for help, a virtual construction bookkeeper can majorly impact your bottom line and ensure you are getting accurate accounting and reporting when it comes to financial transactions. Think of it as an investment into your business’s bottom line!
How a construction bookkeeper can help
Imagine having a single, reliable employee who can offer support with invoice processing, expense tracking, payroll management, and financial reports. When you hire a virtual construction bookkeeper, you will have a dedicated teammate who can help you with the tedious reporting and revenue recognition that is required to make the right business decisions.
Hiring virtual support to help with your construction bookkeeping can help you streamline your reporting and assist with those difficult yet required tasks like:
- Managing your accounting software
- Realizing project costs
- Tracking business transactions
- Organizing construction contracts
- Running your accounts payable and accounts receivables
- Tax preparation
- Tracking material costs
- Generate financial reports
- Prepare profit and loss statements
- And more!
For most businesses without a full-time accounting team, this work requires an executive’s time and attention, which they often cannot spare in the midst of running their construction company. But adding a virtual assistant to your business can give you the extra set of hands to boost and grow your business.
Construction bookkeeping tips
Since we have experience in the construction industry, we know what it takes to manage your company’s bookkeeping accurately. Here are a few construction bookkeeping tips we suggest to our clients as they set up their accounting team:
Have a separate business bank account – It seems obvious, but it is often overlooked by construction businesses just starting out. Make sure you have a separate business bank account so you do not confuse personal and professional expenses.
Track direct and indirect costs – You should be tracking both of these expenses in your accounting software to ensure you are accurately monitoring the job costs and overhead expenses.
Find an accounting software that is easy to use – There are countless types of bookkeeping software that you can use for your expenses. Find one that is intuitive and allows you to track business expenses without too much time and effort.
Use the percentage of completion method – When you have completed a contract and use this accounting method, you can track expenses based on the amount of the completed project. The benefit allows for a more accurate financial record as you work through the contract.
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