This Podcast Is Episode Number 0266, And It Will Be About Seven Deadly Construction Accounting Mistakes "Early To Bed, Early To Rise, Know Your Numbers And Advertise" Unfortunately, with everything contractors like you need to do every day including weekend and holidays it’s too easy to let crisp, timely Financial Reports go unread and in some cases, you may not fully understand what they are telling you when you do read them. #1 Not Tracking Direct Construction Costs For Each Job Or Project If you want to know where you are making and losing money you need to implement a system of Job Costing. These Reports Can only be found in the Premier Contractors and Accountants editions of QuickBooks. Some of them are also available in the Professional Services edition.   We offer Job Costing Report Service click here to learn more  #2 Not Allocating Overhead To Jobs In order for your Job Costing and Job Profitability Reports to be useful you need a way to allocate overhead among jobs. Overhead generally refers to costs that benefit all jobs. For Example: Office And Shop Rent Office Supplies Admin Staff Salary Officer Owner Salary Marketing And Advertising Consulting, Legal, And Accounting Other Overhead Costs Successful Construction Companies have a system to allocate a percentage of overhead among jobs based on field labor or field labor hours. The problem here is overhead costs may be over or under allocated which creates a distorted picture of job profitability. For example, if your projects are material and other costs intensive, rather than labor intensive, you may consider allocating overhead based on one of those costs or perhaps some blend of direct job costs. The key is to develop a method for allocating overhead costs to the jobs that drive them. #3 Change Orders Change orders can be a great source of additional cash flow and profits as well as pitfalls and money drain and lost profit opportunities for contractors. Let me share a true story. Home Improvement Contractor, Virginia USA He called Sharie, our Client Care Coordinator and his first words after hello were: "I found your how-to video about change orders and really like how you have it set up and appreciate the pointers you had to offer." He was sick and tired of customers constantly changing stuff on him and creating delays or extra work. He needed to be compensated for his time and his crew time but wanted to make sure he was doing it the right way. Click Here For Construction Change Order Video This video shows you step by step the Fast Easy Accounting way to work with your Free Construction Change Order Form. We certainly hope this will help you increase construction sales and bottom line profit by getting paid for all the extra work you are doing. Contractors Are Our Heros so we want to help you achieve your definition of success! During a short phone interview with me, he shared his story of how this change order template helped him sell new work and get a check today! He must have read our article on Contractors Are Not Bankers! Recap: He found the same thing most contractors have learned about how “Change Orders” become favors! Why, because by the end of the job he had forgotten all of the things he did that were not part of the original Scope of Work. Since he wasn’t clear with the customer about paying for those "Minor Changes" they ended up costing him time, money and profit. He said after watching the video he downloaded the FREE Change Order Template Click Here for a Free copy of it. Since it is built on Excel he said it was easy to insert his company letterhead, customize it with a few additional lines for description and save it to his desktop. He Printed Some Copies And Put Then In The Job Folder Today his customer asked about some changes that she was thinking about doing in the future. They discussed it and between them, and they decided that it the most economical to do the additional changes. Remembering the “Brand New...