This Podcast Is Episode Number 0390, And It's About Contractors Need KPI, Not Get-Me-By Being in your own business can be the best time in your life. Alternatively, the worst time! No one starts a business, especially a contracting business, and have it rolling perfectly with a profit every step of the way. Between regulations, economic uncertainty, and other outside forces; always a learning curve. Picking a Get-Me-By Contractor's Bookkeeping Solution in many cases is using an Excel Spreadsheet and a shoebox, file folders all dumped into a file box and looking at the Online Banking once in a while. This accounting method is the "I still got money, so I must be okay." When you use today's Job Deposit To Pay For the material, labor, and subcontractors from the last job, it is also known as "Rob Peter To Pay Paul." Cash flow is never a problem until the sales stop; then it doesn't matter if it is the economy (your customers get laid off), domino effect (their customer didn't pay them), or you are unable to work due to being hurt on the job or get sick (flu or more serious illness). Problems Arise When You Want To Do Any One Of The Following: Get a Line of Credit at the bank to expand or buy equipment Attempt to get a commercial lease for equipment Setup a 30 Day account at a major supplier Buy a new vehicle for personal or for the company Buy a new house or Refinance existing home Answer questions on Liability Insurance Audit The Insurance Audit The insurance company may want copies of quarterly and monthly tax reports. The Low Premium is based on "low sales" and "low payroll"; at audit time, it is the adjustment in the "Actual" Premium. If all the numbers are equal or less, there is not usually a credit. To verify income, Insurance companies will want to see copies of State Revenue Reports and payroll reports.  State Agencies May Want To Do An Audit On Your Business Some states suggest you get a "Voluntary Review." Depending on the auditor, this may go smoothly. In other cases, it can turn into a full-blown audit. The audit can have a date range of several years, not just the current or previous year. In addition to , you, the contractor can be asked to provide the Check Register, Customer Invoices, Employee Timecards and Paystubs, plus the State Revenue and State and Federal Payroll reports. In other words, they want everything to cross-check what you told one agency over another. State agencies are looking at your customer and vendor list to add to their companies' plans to go after next. Banks Want Detailed And Summary Financial Statements Bank wants current and Year to date  and previous Year's tax Federal Tax Returns. In most cases, the loan officer will ask for the application, and financials be provided even when they know that the bank is not lending to anyone for whatever you are asking for. (Example: Working Capital). See  The Application Process Can Be Many Pages Long And they can feel very intrusive. Before you invest time and energy - verify the bank is lending to contractors. Then ask if the bank is lending for Working Capital, Vehicles, Equipment, or Whatever you need the loan for. What is the debt to income ratios and more? Don't Be Afraid To Ask: What is the bank looking for to say YES! Tax Accountant Uses Your "Get-Me-By Documents." When your Construction Company is small, you may find a tax accountant willing to take your "Get Me By Documents" and do a workaround to file your taxes. Don't expect them to do that Year, After Year, After Year when suddenly you have grown to make over $100,000 in sales and above. They have the reasonable expectation that you are getting it together, and if you don't, then the burden of finding all of your deductions is not on others. Every missed receipt may be a business deduction missed and causing you, the contractor, to pay more taxes than necessary.  Get You By Contractor's Bookkeeping Can Be Easily Solved We have clients who are Brand...