This Podcast Is Episode Number 0314, And It Will Be About Proven Tax Reducing Opportunities For Your Construction Company Accounting has two sides: Internal Accounting (Management Accounting) - for making money. Its purpose is to help you operate and grow your business profitability. External Accounting (Tax Accounting) - for paying taxes. Its purpose is to prepare tax forms, report your income, and make sure you pay your fair share of taxes. Understanding the difference will impact your company's financial health and wealth. Both groups of accountants must know the relationship between your internal bookkeeping and the Internal Revenue Service, and the importance of paying the right amount of taxes. There are a lot of professional bookkeepers, accountants, and tax preparers and they all serve a different role in your business. In-House Bookkeeping Contractors who do not earn a lot of money see bookkeeping as overhead which costs money and therefore is a drain on profits so they get a cheap computer, tiny monitor, garbage printer, small desk and broken down chair that even the dog would not sit in and tell the bookkeeper this is all the company can afford. In an effort to get their money's worth the contractor assigns all kinds of additional tasks to the bookkeeper like running business and personal errands; delivering materials, supplies, and paperwork to the job site, make coffee, answer the phones, take out the trash and clean the bathroom. Anything and everything to get "value" out of the time and money that is being wasted on bookkeeping. One of the biggest challenges construction company owners have with an in-house bookkeeper is training them to work for your best interest, not theirs, and deliver consistent results and the reports you can trust day after day, year after year. Do you suspect your bookkeeper is overwhelmed trying to figure out how to do construction accounting? They cost you more than they are worth in salary, fees, and profits. If you cannot get accurate financial reports, chances are you're overpaying your taxes. Outsourced Bookkeeping The other option would be to outsource your bookkeeping. However, there are red flags that you need to watch out for when going this route. You need someone who specializes in your industry that can guide and mentor you. Today more than ever, remote access to your QuickBooks or bookkeeping file is essential to monitor your business profitability, any outsourced bookkeeping service who cannot provide you with access to a cloud-based environment is doing you a disservice unless you don't want to see your financial documents. Furthermore, remember the value of your security; the cost of proper bookkeeping combined with secured cyber information is priceless. Trust but verify - consider this when looking for an accounting and bookkeeping company. My thirty years of experience in the construction industry as a contractor, a construction accountant, and a profit and growth coach enabled me to identify these opportunities that you can seize to help with your business process and lower your tax bills: Use The Right Accounting Method Construction bookkeeping and accounting are entirely different from standard accounting systems primarily because contractors take their entire business inside trucks and vans to people's homes and perform their services, deliver, or install products. Finding the right bookkeeping and accounting solution that will do "all I need it to do" is a challenge for construction contractors like you. It all depends on how you get paid, the type of work your company does, and if you need financial reporting (such as Job Costing for instance).  Hire A Professional Construction Bookkeeper According to Malcolm Gladwell, author of the book "Outliers", it takes 10,000 hours of practice to master a skill. That is what your professional construction bookkeeper should have...