This Podcast Is Episode Number 0336, And It Will Be About Calculating Costs And The Value Of A Construction Bookkeeper   Owning a construction business means you understand that bookkeeping is just one of those mundane, nasty, dirty, aggravating, grubby little chores you get stuck with along with its rotten scoundrel cousin the Monthly/Quarterly Tax Reports.  If you have employees - look out! On top of everything else you have payroll to process, in some cases, you may decide to provide cash advances to your employees to keep them focused on the job and not on personal issues, and finally there are all the Payroll Taxes you need to keep track of and file the reports for on a regular basis. Smart Contractors know their time is more valuable spent meeting prospective clients, putting together bids, managing job sites, and a whole lot of other things other than bookkeeping. So they find someone else to do it.  Just like there are skilled construction workers and clowns trying to pass themselves off as skilled workers, there are Professional Bookkeepers and Bad Bookkeepers. You know how to tell if someone knows what they are doing in construction because you have been doing it a while. Any bookkeeping and accounting firm that does not know how to calculate complex algorithms that take into account fluctuations in the workload and generate a monthly fee that is fair to you needs to go back to school and take those courses on Decision Modeling, Statistical Analysis, and Business Process Management. All Professional Construction Bookkeeping and Accounting Services have formulas for calculating fee structures. It is not rocket science, but it does take a deep understanding of accounting: How many employees do you have? From that, we know how much time and effort it will require to process payroll and do the tax reports. What type of construction do you do? New, remodel, service, residential, commercial? From the number of employees and the kind of work you do, we know how much time and effort it will require to do all the bookkeeping, bank and vendor reconciliations, and the rest. Many of you begin with the thought: I am just a contractor. I don't want to be the business owner. I just want to do the work. That is what is important. Yes, doing the work is important. Keeping track of your hard costs, soft costs, general expenses and overhead is the difference between making a profit or having a loss. Ignoring the costs do not make them go away; it just avoids putting them on the tax return. Any missed expenses make your profit on the job look higher than it really is and causes you to pay more income taxes because all net profit is taxable. All businesses need to keep track of their company expenses, including the material and much more. Contractors usually go from one extreme (doing nothing) to the other (trying to count every bean, every paperclip, all the nails and, the scraps of 2x4’s). The balance is somewhere in the middle. Construction Company Owners Like You Need A Working Knowledge Of Business To Become Successful Customer Invoice Tracking - Knowing Who Owes You Money And How Much A proper Construction Contractor Bookkeeping System is set up to create a Customer Invoice - receives payment. Seeing the balance if anything is owed. Accounts Receivable Aging Report is one of the reports banks look at before giving you a business loan. Bankers want to know what is your volume (sales), what have you collected (customer payments), and how much do customers still owe you, and finally how long does it take you to collect. In some industries 30-60 days is standard.  Accounts Payable is keeping track of the bills owed to a supplier or subcontractor A proper Construction Contractor Bookkeeping System uses the Accounts Payable feature to track the unpaid bills. Again, the banker wants to know how long it takes to pay your bills. The bank wants to get paid, and...