Bookkeeping for many industries is a chore and many small business owners are also often unequipped when it comes to keeping a clean set of books, the construction industry is no different. Below is a list of five common deadly sins of construction bookkeeping:
1. Doing your bookkeeping by hand
This inevitably turns into a disaster. Running a home building, contracting, or renovation business requires you to be on the job site for extended periods of time, which can make keeping track of your expenses, invoicing, cost-plus hours, etc. overwhelming. A solid accounting software application like Corecon or Quickbooks is a vital tool for keeping your financials in order.
2. Taking on too much
Dealing with numerous projects and labour costs are all a part of the game. However, taking on multiple tasks while trying to maintain your daily routine can often be your biggest weakness. Face it, at the end of the day the last thing you want to worry about is keeping track of your financial expenses. Adopting a financial management system that allows you to keep your company on the straight and narrow without veering off on unwanted issues keeps everything running smoothly.
3. Employing more staff than you need
Employing incompetent or unneeded staff can drastically drain your operating budget. Outsourcing your required services is one of the best ways to save money in the long run. You don’t have to deal with annual salaries, overtime pay, holiday pay, benefits, etc. Pay for what you need and no more.
4. Neglecting your business for the sake of your clients
Take care of your business first. Even if that means turning down lucrative projects so that you can invest in or replace old equipment, pay your outstanding bills, or to recognize and provide your employees with the support they deserve.
5. Avoid looking at your finances
Many business owners will sometimes stop looking at their finances because they suspect they have gone off track. Your cashflow is at the heart of your business – the longer you avoid looking at the financial health of your business, the more trouble you could soon find yourself in.