5 Minutes to Better Construction Bookkeeping
Are you tired of spending hours on bookkeeping and accounting tasks in your construction business?
We know that managing the financial side of your business can be overwhelming, but it doesn’t have to be. Sometimes, a few simple tweaks is all it takes to transform your bookkeeping from “overwhelming” to “helpful”.
Here at Atlas Accounting Group, we’ve helped many construction & home service business owners get meaningful insights and data out of their monthly bookkeeping.
In today’s blog, we’re going to share a few useful tips that we’ve found can help take your bookkeeping (and business finances) to the next level.
Let’s dive in.
Our Quick Tips for Better Construction Bookkeeping
Separate Your Business & Personal Expenses
The first thing we recommend is to always keep your personal and business expenses separate. This may seem like an obvious rule, but it’s one that we find business owners break a lot.
And we get it! You needed to grab a quick snack from the gas station and only had your business card with you. It seemed harmless to put through a small transaction on the business account.
But it’s important to not make this a habit. The IRS can penalize you for these small transactions, and even invalidate your LLC status. Keep your business and personal expenses separate.
Automate As Much As You Can
One thing we stress here at Atlas Accounting Group is automating as much of the work as you can. Entering data into spreadsheets and reconciling numbers manually is so old school. We strongly recommend using bookkeeping software like QuickBooks Online, and integrating it with all of your other software including ServiceTitan, Housecall Pro, etc. That way, you can sync your bookkeeping software with your business bank account and other operating software so you always have accurate, up-to-the-minute records.
Keep On Top of It
As a small business owner, it can be tempting to push aside bookkeeping tasks in favor of more pressing matters. However, neglecting your company’s digital books can lead to a host of issues down the line, such as inaccurate financial statements and difficulty tracking expenses. To avoid these problems, it’s important to roll up your sleeves and dive into your books at least once a month. This will help ensure that your records are accurate and up-to-date, making it easier to catch mistakes and identify opportunities for growth.
Set Up a Simple Chart of Accounts
Setting up a chart of accounts for your bookkeeping software is critical to ensure that you’re allocating transactions to the appropriate categories. But business owners often make their COA much more complex than it needs to be. When setting up your Chart of Accounts, it’s important to strike a balance between granularity and simplicity. While it can be tempting to split income into numerous subcategories, doing so can lead to a confusing and time-consuming system. Instead, aim for a standardized initial Chart of Accounts and only add new accounts when they would be useful for decision-making or understanding the financial story of your business. This will help ensure that your financial statements are easy to understand and accurate. You can use our simple Chart of Accounts Template here.
Pay Attention to Your Bank Feed
GIGO (Garbage In, Garbage Out) is a common problem in bookkeeping, and it’s especially true when it comes to bank feeds. Blindly accepting every transaction that comes through can lead to duplicate entries, inaccurate reports, and other issues.
To avoid these problems, take the time to carefully review your bank feed and ensure that each transaction is assigned to the correct account. This may take a bit of extra time, but it will save you a lot of headaches in the long run.
Hire a Pro
Last but not least, sometimes it’s just easier to hand over the financial work to the experts. Most of the construction clients we see are unnecessarily leaking thousands of dollars every month without knowing it. An ongoing construction bookkeeper can help make sure that you aren’t leaving revenue on the table or running into cash flow problems. But instead, will give you an accurate, full picture of your financials so you can make better business decisions.
And that’s it! With a few simple tweaks, your monthly bookkeeping can become something you look forward to, rather than dread.
After all, your financial numbers should be the foundation for all of the decisions you make in your business. We want to make sure you get it right!
If you want more help with your monthly bookkeeping, we’re always here to help.
You can schedule a quick complimentary chat with one of our construction bookkeepers here.
Until next time!
