This Podcast Is Episode Number 0220 And It Will Be About Contractors Are Skilled In Construction But Not Usually In Construction Accounting Almost every Contractor understands how to do basic repairs and remodels on a house.   As the project grows it gets a little more complicated. Is it a kitchen remodel, a bath remodel, upgrading the laundry area? Building a Deck? Adding a second story addition? Adding a garage? Your Construction Accounting System started small and easy. Perhaps you tracked everything with bank statements and Excel sheets and it worked fine for a while. Later as your Construction Company grew and you began to wonder where you are making and losing money (Job Costing) and you realized you need to better understand Construction Job Cash Flow you purchased QuickBooks thinking it was "Quick" and that is when the trouble started... Each type of project takes planning and skill. Doing a teardown and then building a new house? Oh, maybe the zoning does not allow for a new house so technically it is a major remodel keeping a certain amount of square footage of the original house.   A brand-new contractor without a background in larger projects typically is not going to immediately jump into a large remodel.  Someone who has done lots of remodels may not be comfortable building a new house from the ground up. Decisions in any project are what level of quality of the work, how much detail, the size and the material needed to complete the job Decides How Much It Costs.  Is a Cottage or a Mansion?          The area of the country makes a difference. For Example, a $500,000 house in one part of the country could be a two story, 4 bedrooms, 2.5 baths and a wraparound porch. In another part of the country, it may be a 3-bedroom rambler and a carport.      The cost of material may not be a lot cheaper in one area over another. The price of sheetrock and lumber increased in Seattle after Hurricane Sandy and Hurricane Katrina. Local labor may be different.   The skillset needs to complete the Handyman Repair, Installation of Plumbing, Heating, Electrical, Roofs, building the Additions on a House, creating a whole house remodel or building a new house are not the same as being able to track all of the expenses and do all of the bookkeeping properly. Construction Accounting and Regular Accounting require entirely different skill sets. With an Excel Spreadsheet, quite a lot can be done to know your costs and track the bills that need to be paid. Many contractors have done this for years. Turning in the spreadsheet and a pile of paperwork to the Tax Accountant to file the annual taxes.   If the Tax Accountant has worked with you for years; they understand your method and figure out a workaround.  Some will setup QuickBooks Desktop or some other software to create monthly, quarterly numbers leading them to the annual Profit & Loss and Balance Sheet needed to file your annual taxes   Your Banker is not quite so willing to do “try to figure out” your financials. They have a limited amount of time to make a presentation to a Loan Committee.  Financial Statements from QuickBooks make it easy for your Banker and the Loan Committee to compare financial statements between applicants. Some contractors have the benefit of being in a small town, where their banker has known them for years. The decision process is more informal.  As Bank Regulators have gotten involved with the decision process – what was a simple “Yes” decision may suddenly be “No”. A lot of Home Builders got caught up in that loop and lost property because could neither sell or refinance. Are you counting on “The Kindness of Others” (to quote slightly from a classic movie) for solutions to your lack of good bookkeeping? Sometimes it is harder to avoid doing something than it would be to find a qualified “Construction Bookkeeper” to do...