If you are a contractor you know how to get the work done. At the end of your day when your body is tired, your muscles are aching and you are too tired to move is when you ask yourself three simple questions:

#1 Am I making money or losing money?

#2 Which jobs and customers are making me money?

#3 Which jobs and customers are costing me money?

Every Complex Question Has Two Answers

#1 Is Simple And Wrong

#2 Is Hard And Right

The Simple Answer Is to keep doing what you have always done and continue getting what you have always got. Don't pay any attention to your financial and job costing reports until it is time to file your annual taxes and gasp in dismay and horror while asking what happened?

It is as story of two guys living in a farming community started a business buying and selling bales of hay. They had a large truck and would buy 100-pound bales the hay, load them up it and make deliveries to their customers. They bought and sold 500 bales of hay every day.

After a month one partner said to the other "If we buy a bale of hay for $10.00 and sell it for $10.00 we need a bigger truck if we are going to make any money!"

We see a lot of contractors, men and women with good hearts; good intentions and very intelligent doing something similar day-in-and-day-out and it cause us a lot of pain because we know there is a better way.

The Hard Answer Is early to bed, early to rise know your numbers and advertise. Knowing your numbers is painful! It hurts your brain for a short while because you are using a part of your brain that may have been sitting idle for a long while. Unless you are a recent university graduate and you studied hard and applied yourself.

The following is a simple Step-By-Step Process to get you started:

Step #1 - Ask your bookkeeper or accountant or better yet your construction accountant for three reports Profit & Loss Enhanced, Balance Sheet Enhanced and Profit & Loss By Job. And you can see samples of them at http://www.fasteasyaccounting.com/blog/we-fix-quickbooks-job-costing-reports-problems

There is a lot of information contained in each of these reports and like anything new if it is the first time you have seen them there will be a considerable amount to digest and understand.

We find that even contractors with highly skilled financial backgrounds have a bit of trouble understanding these reports because of the vast differences between Construction Accounting and Regular Accounting. The good news is any contractor who invests a small amount of time and money will be amazed at how much wealth can be gained from it.

My advice is spend a few minutes and look at them casually and then wait an hour or more and check them again. Repeat the process by reviewing them every day for 10-15 minutes and make notes about anything that looks interesting. Then set an appointment with your accountant and spend some time discussing them and asking questions.

Listen to this Podcast for more…

If you are Thinking About Outsourcing Your Contractors Bookkeeping Services you are invited to download a guide to finding the right contractor bookkeeping service to fit your particular situation at www.FastEasyAccounting.com/hs

Call Sharie now 206-361-3950 or [email protected] and schedule your no charge one-hour consultation.