This Podcast Is Episode 614, And It's About Social Media Marketing Basics For Construction Contractors Social media can feel overwhelming. With so much noise and so many platforms, where do you start? The truth is that a great social media strategy can transform how you connect with customers and help you grow your contracting business.   Social media platforms' reach and accessibility are unprecedented. They connect businesses with a vast audience in real-time. Besides their broad reach, social media platforms also serve as valuable tools for businesses to listen to what their customers say about their brand, competitors, or the industry.   Social media allows for active engagement. Construction companies like yours can post questions, respond to comments, and forge stronger customer bonds. Unlike traditional marketing channels, it's a great leveler. All businesses – whether big or small, have equal access. This means smaller companies can compete effectively against their larger counterparts.  

Whether you are new to social media or are refining your approach, these six steps will help you thrive online.

1. Start with the fundamentals

Social media isn't just about pretty pictures or funny tweets. At its core, it's a powerful tool for strengthening your brand, building relationships, and hitting your business goals—if you have a plan.

Think of it this way: Posting randomly is like throwing darts in the dark. Set clear objectives for your efforts. Are you trying to boost brand awareness, increase leads, or engage your current customers? Once you define your goals, you can create content that moves the needle.   

Action steps:

• Map out your objective. To build brand awareness, plan posts introducing your business, sharing behind-the-scenes moments, or showcasing customer testimonials.
• Identify your target market, including homeowners, commercial property managers, or other businesses needing construction services.
• Create customer personas to understand their needs, challenges, and preferred social media platforms.

2. Choose the Right Platforms

You don't need to be everywhere—you need to be where your audience is. Each social platform serves a different purpose. If you're a Commercial Remodeler, LinkedIn lets you interact with other businesses and build authority. For visual appeal, Instagram is still king. Facebook can help you connect with a broad range of users, while TikTok excels if you want to reach younger audiences.

Quick tips:

• Focus on visually-driven platforms like Instagram and Pinterest to showcase completed projects.
• Use Facebook for community engagement and updates about your services.
• Consider LinkedIn for B2B connections and networking with industry professionals.

3. Develop a Content Strategy

Walking into a grocery store that constantly changes where items are placed is incredibly frustrating, and that's exactly how your audience feels if your posts are scattered and inconsistent. A content strategy helps you post consistently, maintain your brand's voice, and keep people returning for more.

Content calendars can be your best friend. They help you plan posts. And variety is key! Include posts showcasing your services, tips to help your audience, fun polls, or behind-the-scenes sneak peeks.

Action steps:

• Share high-quality images and videos of your work, such as before-and-after shots or time-lapse videos of projects.
• Post educational content that teaches your audience about construction processes, maintenance tips, or industry insights.
• Highlight customer testimonials and case studies to build trust with potential clients.

4. Engage with Your Audience

Social media isn't a one-way street. Don't just post and ghost—start conversations. Respond to comments, ask questions, and keep the dialogue going. Genuine interactions build trust and loyalty.

Contests, polls, and live Q&A sessions are excellent for boosting engagement. For example, hosting a giveaway like "Share your favorite product/service moment and tag us for a chance to win!" can encourage your audience to interact with your brand.

Practical approach:

• Respond promptly to comments and messages to build relationships and trust.
• Encourage clients to share their experiences and tag your company in their posts.
• Join relevant groups or forums on social media to connect with potential clients and industry peers.

5. Explore Paid Advertising

Organic content is essential, but paid advertising can supercharge your reach. With ads, you can target specific demographics, interests, and behaviors. The best part? You don't need a massive budget to start. Start small, run tests, and identify what works.

What you can do:

• You could advertise your bestselling product or promote a free resource (like an eBook or webinar). Ads help you position content in front of your dream customers.
• Consider running targeted ads on platforms like Facebook and Instagram to reach a broader audience.
• Use geographic targeting to ensure your ads reach local homeowners and businesses needing construction services.
• Start with a $50 test ad on Facebook or Instagram. Target a specific audience, monitor results, and expand from there.

6. Track and Analyze Your Results

How do you know if your social efforts are paying off? Numbers don't lie. Pay attention to metrics like reach, engagement, and follower growth. Built-in analytics or third-party tools make tracking what's working (and what's not) easy.

If you notice that your audience loves memes or prefers short videos, adjust your strategy based on that data. Social media success is flexible—it's about trying, learning, and improving.

If you're new to this:

• Use analytics tools available on social media platforms to monitor engagement, reach, and conversion rates.
• First, focus on a few key metrics. Start with the engagement rate (likes, comments, shares) and build from there.
• Adjust your strategy based on what content performs best and resonates with your audience.

Remember to monitor industry practices and adapt your strategy accordingly. To increase visibility and engagement, participate in social media challenges or trends that align with your brand.

Final thoughts

It's important to note that while setting up a social media account may be free, social media marketing is not devoid of costs. The time spent updating channels, responding to posts, and participating in discussions equates to time not spent on other business activities.

Social media marketing doesn't have to feel overwhelming. The results will come when you focus on understanding your audience, crafting a strategy, and staying consistent. Success takes time, but with some planning, you can connect with your customers, grow your brand, and achieve your goals—one post at a time.

By implementing these social media marketing basics, construction contractors like you can effectively promote your services, engage with your clients, and grow your brand online, ultimately building meaningful connections and trust with your audience.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]

 

This Podcast Is Episode 613, And It's About Strategies To Boost Construction Team Morale During Transitions Change is inevitable in any business, but it's rarely easy—especially when managing morale. Significant transitions can leave employees feeling uncertain, disengaged, or even overwhelmed, whether you're restructuring your team, implementing new processes, or pivoting your business strategy.    As a small business owner, you probably ask yourself, "How can I guide my team through this while maintaining morale?" You're in the right place. Maintaining high morale within a construction team is crucial for productivity and overall job satisfaction. The construction industry can be challenging, with tight deadlines, physical demands, and unpredictable work environments. Supporting and motivating your team is essential.   

Here are 10 practical tips to help you support your team and maintain a positive, productive environment during significant change.

1. Communicate early and often   Transparency is your best friend during periods of change. Keep your team informed by sharing information as early as possible—and don't stop there. Regular updates can help reduce uncertainty and foster trust. Whether it's an email, a town hall, or a one-on-one conversation, aim to explain:  

• What's changing
• Why the change is happening
• How it will affect your team 

  For example, a quarterly team meeting can serve as a platform to address concerns and answer questions. Employees who feel informed are less likely to speculate or fear the worst.   2. Listen to employee concerns   Change impacts everyone differently; your team will have questions, concerns, or frustrations. Show them you care by creating space for open dialogue. Encourage team members to:  

• Express their feelings 
• Share feedback on how the change is unfolding

  Using anonymous surveys or hosting informal "ask me anything" sessions can make employees feel heard. Remember, acknowledging their concerns—even if you don't have all the answers right away—goes a long way in building trust.   3. Share the vision   People resist change when they don't understand its purpose. Focus on the bigger picture to paint a clear picture of what lies ahead. How will this change benefit the team, the company, or even your customers in the long run?    For instance, if you're restructuring to expand into new markets, explain how it can lead to more innovation or exciting growth opportunities. A shared vision provides clarity and motivates the team to move forward together.   4. Empathize with your team   Here's the truth—change can be stressful. Acknowledge and validate your employees' emotions. Begin meetings or updates with statements like, "I understand this may feel overwhelming" or "We know this transition has been tough."    By showing empathy, you foster a sense of unity and make it clear that you're working through this change together.   5. Keep leadership visible   Your team looks to you for guidance, especially during times of uncertainty. Be present, approachable, and ready to answer questions. Your availability demonstrates that you're actively engaged in the process, whether walking the office floor, participating in virtual check-ins, or sending team-wide updates.    Remember, leadership isn't just about decision-making—it's also about reassurance.   6. Lead with optimism   Have you ever noticed how a leader's tone sets the mood for an entire team? Stay positive and relay your belief in the team's ability to overcome challenges. It's important to remain genuine—optimism doesn't mean brushing off difficulties but tackling them confidently.    When you frame challenges as opportunities for growth, the team will be more likely to rise to the occasion.   7. Invest in employee growth   When change disrupts workflows, employees may feel stagnant or uneasy about their roles. Counteract this by providing opportunities for professional development. Whether you offer access to online courses, arrange workshops, or encourage skill-building projects, you'll remind your team that their growth still matters to the business.   For example, consider introducing workshops to train employees on new systems during a technological shift. This will boost morale and build confidence.   8. Recognize achievements   Sometimes, it's the small wins that keep morale alive. Take the time to acknowledge individuals or teams adapting well or going above and beyond during transitions. Whether it's a shoutout during a meeting or a personal note of appreciation, celebrating achievements can maintain momentum.   Pro tip: Pair recognition with tangible rewards, like an extra day of paid time off or coffee vouchers. It doesn't have to be expensive—just thoughtful.   9. Maintain consistent messaging   Mixed messages can create unnecessary confusion. Ensure that updates regarding the change are consistent across the board. Empower managers and team leads with the right talking points so everyone is on the same page.    Providing an FAQ document or a central update hub is a great way to keep communication aligned and accessible for your team.   10. Foster a sense of community   Change is easier to manage when employees feel like they're part of a supportive team. Arrange team-building activities, whether virtual or in-person, during this period. From group lunches to brainstorming sessions, these activities can help strengthen relationships and build camaraderie.    Create opportunities for employees to collaborate on problem-solving tasks related to the change. This will give them a feeling of ownership and reinforce the idea that "we're in this together."   Adaptability in Construction Bookkeeping   The construction industry frequently shifts due to regulatory changes, economic fluctuations, and technological advancements. An adaptable bookkeeping approach allows businesses to adjust to these changes swiftly, ensuring compliance and minimizing disruptions in financial reporting.   By leveraging technology, enhancing communication, and being responsive to industry changes, construction businesses can maintain strong financial health and become more resilient in a competitive market. An adaptable bookkeeping approach ultimately leads to better decision-making, increased profitability, and a solid foundation for growth.   Keep moving forward    Change can be difficult, but it also holds the potential to bring growth, innovation, and opportunity. By empathizing with your team, communicating clearly, and keeping morale front of mind, you can ensure that the transition strengthens your business instead of destabilizing it.   An adaptable construction business owner can navigate unexpected challenges—such as changes in market demand or supply chain disruptions—more effectively. This resilience helps the business weather economic fluctuations and positions it to seize new opportunities.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]

 

This Podcast Is Episode 612, And It's About The Budget Blueprint: Project Cost Control For Contractors Did you know that 39% of projects fail due to budget issues? For small businesses and entrepreneurs, the stakes couldn’t be higher. Managing a project budget is not just about numbers; it’s about ensuring your business is profitable. By understanding the essential steps of project budgeting, you can turn potential pitfalls into opportunities for success.  Whether launching a new service or expanding your services, mastering project budgeting is invaluable for achieving your construction business goals.   Understanding Project Budgeting   Project budgeting is a crucial component of successful project management. At its core, a project budget is the total estimated cost of all the tasks, activities, and materials associated with a project. It serves as a roadmap for project managers, offering a framework for allocating resources and tracking expenses throughout the project lifecycle.   Budgeting is essential for several reasons. A well-prepared budget helps control costs, ensuring that project expenditures don’t exceed available funds. It also improves resource allocation by identifying potential bottlenecks and enabling more informed decision-making. Additionally, effective budgeting aids in risk management by setting aside contingency funds to cover unforeseen expenses, thereby reducing the likelihood of project failure.   Whether you're allocating funds for an internal project or you are working on a client project, here are the steps to create a basic project budget:   Creating a project budget involves several critical steps. Understanding and following these can significantly boost your chances of project success.   1. Identify project scope   The first step in budgeting is defining the project scope. This involves outlining the project’s objectives, deliverables, and timeline. A clear scope helps you identify the necessary resources and costs associated with the project, ensuring that all essential components are included in the budget.   Consider the tasks and activities required to achieve the project’s goals. Determine the personnel, equipment, and materials needed to complete the project. Establishing a clear understanding of the project’s scope lays the foundation for an accurate and comprehensive budget.   2. List all project costs   Once you’ve defined the project scope, the next step is to list all project costs. These costs can be classified as direct or indirect. Direct costs include materials, person-hours, and equipment required to complete the project. Indirect costs, on the other hand, include overhead expenses such as rent, utilities, and administrative expenses.   Be thorough in your cost estimation process. Use market prices, vendor quotes, and historical data from similar projects to ensure accuracy. It’s better to overestimate expenses than be caught off guard by unexpected costs later.   3. Estimate costs   Estimating project costs is a crucial aspect of budgeting. Several methods can be used to estimate costs, such as expert analysis, historical data, and three-point estimating. Expert analysis involves consulting with experienced professionals to obtain accurate cost estimates. Historical data analysis involves examining past projects to identify cost patterns and trends. Three-point estimating uses optimistic, pessimistic, and most likely cost scenarios to generate a more accurate estimate.   Employing these estimation techniques can help you develop a realistic budget that accounts for potential uncertainties and variances in project costs.   4. Create a budget timeline   A budget timeline allocates costs over the project’s duration, ensuring a balanced cash flow. It helps identify when specific expenses are expected to occur, allowing for better financial planning and management.   A well-structured budget timeline enables you to proactively address cash flow issues and allocate resources efficiently. It also clarifies how project costs will be distributed over time, reducing the risk of budget overruns.   5. Include contingency funds   Contingency funds are essential for addressing unexpected expenses that may arise during the project. Setting aside a portion of the budget for contingencies provides a financial safety net that allows you to manage unforeseen challenges without derailing the project.   Experts recommend allocating 10-20% of the project budget as contingency funds. This buffer helps cover unexpected costs while maintaining the project’s financial integrity.   Tools and techniques   Several tools and techniques can simplify the budgeting process and improve project management efficiency.   Budgeting software   Budgeting software can streamline budgeting by automating calculations, tracking expenses, and generating reports. These tools offer cost estimation, budget tracking, and financial forecasting features, enabling project managers to make informed decisions.   Popular budgeting software options include Microsoft Excel, Google Sheets, and targeted project management platforms. These tools provide flexibility and ease of use, making them suitable for businesses of all sizes.   Templates and spreadsheets   Templates and spreadsheets are practical tools for managing and tracking project costs. They provide a structured format for inputting expenses, ensuring all costs are accounted for. Templates can be tailored to suit specific project needs, while spreadsheets offer the flexibility to incorporate formulas and calculations.   Using templates and spreadsheets simplifies the budget creation process, allowing project managers to monitor and control costs effectively.   Common mistakes to avoid   Avoiding common budgeting mistakes is crucial for maintaining the project's financial health. Here are some pitfalls to watch out for:   1. Underestimating costs   Underestimating costs is a common mistake that can lead to budget overruns. To avoid this, ensure that all project components are thoroughly researched and accurately cost. Use historical data and expert analysis to refine cost estimates.   2. Ignoring contingency planning   Contingency planning is essential for managing unexpected expenses. Failure to allocate contingency funds can result in financial strain and project delays. Set aside a portion of the budget for contingencies to mitigate risks and maintain project stability.   3. Lack of updates   Regular budget updates and tracking are crucial for staying on course. Failing to monitor project expenses can lead to financial mismanagement and cost overruns. Implement a system for tracking expenses and updating the budget as needed.   Summing up   Effective project budgeting is essential to achieve project success. By understanding the fundamentals of budgeting and implementing best practices, you can allocate resources efficiently, manage risks, and ensure project profitability.   Engaging a construction bookkeeper can be a game-changer for your project budgeting process. A bookkeeper specializes in managing financial records and can help you maintain accurate financial oversight throughout your project. Construction projects can involve various tax considerations, including sales tax on materials, employment taxes, and potential deductions. A bookkeeper can help you navigate these complexities, ensuring that your project complies with tax regulations and maximizes available deductions. Proper tax planning can ultimately impact your overall project budget and profitability.   Talk to us for help with project budgeting – we’re here to help. Let's enhance the financial health of your project and mitigate risks associated with budget overruns.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]

 

This Podcast Is Episode 611, And It's About The High Cost Of Not Keeping Up With Your Bookkeeping If you ask 100 business owners what they like least about running a business, bookkeeping will likely rank high. It's an annoying and frustrating chore that takes up much time and is easy to put off until tomorrow.   Avoiding your bookkeeping is dangerous, however. Not knowing your construction company's financial situation can result in missteps that could ultimately cost you your business.   When starting bookkeeping as a construction business owner is challenging, a good first step is to break the process down into manageable tasks.  

Here are a few tips to help get you started:

1. Set up a simple system

Choose an accounting method and set up a basic system, whether a spreadsheet or accounting software tailored for construction businesses.

2. Gather your documents

Collect all necessary financial documents such as invoices, receipts, bank statements, and payroll records. Organizing these into folders can make the process less overwhelming.

3. Focus on one area at a time

Instead of tackling everything at once, concentrate on one aspect, like tracking expenses or invoicing, until you feel comfortable before moving to the next.

4. Schedule regular time for bookkeeping

Setting aside a specific time each week for bookkeeping tasks can help make it a routine and prevent it from piling up.

5. Seek help when needed

If you're feeling stuck, consider hiring a bookkeeper or accountant with experience in the construction industry. They can help you set up your system and teach the essentials, providing much-needed support in this challenging task.

Take small, consistent steps to gradually build your bookkeeping skills and confidence. By taking control of your bookkeeping, you're empowering yourself to make informed decisions about your business.

What happens then if you fail to do so? Here are three costly consequences of not keeping up with your bookkeeping:

1. You'll make poor decisions

You can only make informed decisions about your business when you have a complete picture of your current financial situation, including how much money is in your accounts, what your cash flow forecast predicts, and how much money you owe. Knowing when you can afford to spend money or need to hold back is much more challenging without that information.

Without proper bookkeeping, your decisions will be based on how you think things are going, which isn't always accurate. You may have just finished a good month and decide it's time to hire new employees, only to find out you don't have enough money in the bank to pay them. In the long run, waiting three months to hire employees might be more profitable, but you won't know that because your books aren't up-to-date.

Maintaining your books ensures that you have your company's full financial picture available so you can make smart decisions.

2. You'll make financial mistakes

Your employees, contractors, and lenders all rely on you to make your payments on time, every time. Payroll itself requires considerable attention to ensure your employees receive their benefits adequately.

Not keeping track of your financial books can result in expensive errors, including missed benefits, bills not being paid on time, or over- or under-payments. This could cost you extra in fees for late payments or rushed payments, which also affects your books.

In addition to all this, financial mistakes can lead to a lack of trust. You need a trusting relationship with your employees, contractors, and lenders, and payment errors can quickly erode that relationship.

3. You'll lose money

In addition to losing money in unnecessary late fees and payment charges, not keeping track of your books can result in lost money that your business desperately needs.

You won't know which of your clients or customers aren't paying you on time, which means you can't follow up with them or add interest charges for their late payments.

You could be paying too much in expenses, and if you don't reconcile your books, you'll have no idea that money is being wasted. You may have purchased a software program to enhance productivity in the early days of your business. You may have stopped using it but forgot to cancel it, so each month for the past few years, you've been paying for a service you don't use.

Those payments add up and affect your overall financial position.

Why outsource your construction bookkeeping to us - we might be the help you need

Flat Fee No Hourly Rate Surprises

You don't have to pay for payroll taxes, workers' compensation insurance, health and other benefits, or office expenses. We will work within your budget, so there are no surprises. Our services are usually cheaper than hiring a qualified employee, and you can choose an hourly or flat fee. Our contract has no time minimum time commitment clause. You have our service for as long as you need it. There is nothing to lose.

Quality & Experience

We pride ourselves on employing the highest quality bookkeeping professionals and ProAdvisors. Our employees have passed our extensive test, a thorough background check, and a personality screening process. Most of our employees have over 10,000 hours of bookkeeping experience. This experience level is difficult to find when seeking a part-time employee.

Professionalism

As non-employees, we can give helpful, honest advice on improving your procedures and overall efficiency. Most employees want to fill their time simply and are resistant to change. 

Final thoughts

Bookkeeping might be many entrepreneurs' least enjoyable task, but it's essential. If you find yourself putting off or dreading it, it's a good idea to look into hiring someone to do it for you. Construction Bookkeepers are trained and knowledgeable in the process, and they can save you valuable time and money in the long run.

Otherwise, be prepared to set aside time regularly to do your books yourself, and don't let yourself put the task off. It's too critical to the future of your business.

Want to get your books in order without adding more work to your plate? Contact us today.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]

This Podcast Is Episode 610, And It's About Practical Applications Of A Must-Read Book Into Your Small Business It's amazing how some books stand the test of time. We usually refer to one of our most recommended, Stephen Covey's The 7 Habits of Highly Effective People, when we mentor our contractor clients and employees. Although it was first published three decades ago, its lessons are still incredibly relevant for business owners. You might wonder – how these habits fit into today's landscape of changing trends, tight deadlines, and constant distractions. The short answer is that they're timeless because they focus on principles that help you stay grounded while growing your construction business.   Below, we'll break down some of Covey's key habits and explore how you can bring them to life in your business today. Think of this as your blueprint for thriving in the chaos, not just surviving it.   1. Be proactive – the power of owning your choices   Covey's first habit, "Be Proactive," is about owning your life and decisions. For business owners, this means focusing on what you can control instead of stressing about what you can't.   Here's the thing about being reactive—it's debilitating. Complaining about a slow economy or frustrated customers doesn't solve anything, but switching to a proactive mindset is a game changer.  

• Anticipate potential challenges before they become disasters. For instance, if team morale starts to dip, address it early with open communication or team-building initiatives.
• Focus on solutions, not problems. Instead of dwelling on a client who backed out, consider what adjustments in your sales process could improve retention.
• Teach your team the same mindset. An empowered team that problem-solves proactively is a considerable asset.

  Proactive leadership doesn't just keep you afloat; it helps you adapt and innovate in a competitive landscape.   2. "Begin with the end in mind" - set clear goals   This one often hits deep because how many rush into a workday without a clear direction? Covey's second habit reminds us to define our goals before taking action.   If you're running a business, you have to think long-term. What kind of company culture are you building? What legacy do you want to leave behind? Once you're clear on those things, aligning your daily tasks and decisions with the bigger picture becomes easier.  

• Create a vision statement that both you and your team can rally behind.
• Before launching a new service, ask, "What does success look like?" and "How does this align with our core mission?"
• Use goal-setting frameworks like OKRs (Objectives and Key Results) to ensure everyone in the business knows where they're headed.

  Think of this habit as your compass. Without it, you're likely to work hard but still feel lost.   3. Put first things first – manage your time   Quick question – how often do you find yourself buried in "urgent" tasks, only to acknowledge at the end of the day that you didn't touch what's important? That's where Covey's third habit, "Put First Things First," shines. It's all about distinguishing between urgent and truly important, then acting accordingly.  

• Use Covey's Time Management Matrix. Focus on tasks that fall into Quadrant II – essential but not urgent (strategic planning, team development, or building new partnerships).
• Delegate or eliminate tasks that don't move the needle. Not everything deserves your attention.
• Start each day by asking yourself, What's my biggest priority? If I do nothing else today, what task absolutely must get done?

  When you focus on what truly matters, you'll feel less like you're playing catch-up and more like you're moving forward.   4. Think win-win – building mutually beneficial relationships   Business isn't a zero-sum game. Covey's fourth habit, "Think Win-Win," pushes us to find solutions that benefit everyone involved—clients, employees, and business partners. It's the foundation of trust and collaboration.  

• Negotiate with empathy. During discussions, consider the other party's needs and goals and find a compromise that works for everyone.
• For your team, create opportunities where employees feel empowered and valued. A win-win work culture keeps talent engaged.
• Innovate with your customers in mind. Ask how you can provide more value to them – and watch how that mindset leads to loyalty and referrals.

  Win-win isn't always the easiest route, but it pays off in the long run.   5. Seek first to understand, then to be understood – empathetic communication   Have you ever been in a meeting where everyone is talking, but no one is actually listening? Covey nailed it when he discussed the importance of understanding others before getting your point across.   Empathetic communication is one of the most valuable tools for construction business owners. Whether with a frustrated client or a team member struggling with workload, truly listening builds trust and clarity.  

• Pause during tough conversations and fully grasp the other person's perspective before responding.
• Use active listening techniques like paraphrasing or asking thoughtful follow-up questions.
• Encourage this habit in your team to strengthen collaboration and reduce misunderstandings.

The better your communication, the stronger your relationships – and a thriving business is built on great relationships.   6. Synergize   Combine the strengths of diverse team members to achieve innovative solutions. In construction, this can mean leveraging the unique skills of various trades to enhance project efficiency. Encourage collaboration through joint problem-solving sessions, where team members can share ideas and work together on challenges. The combined efforts of a well-coordinated team can lead to exceptional results.    7. Sharpen the Saw   Invest in the ongoing development of yourself and your team. This includes professional training, certifications, and wellness initiatives to ensure everyone functions at their best. Encourage a culture of continuous improvement through workshops and skill-building exercises. Regularly reassessing and refining processes keeps your business adaptive and innovative in a competitive market.   What makes "The 7 Habits of Highly Effective People" priceless for construction business owners today? Its focus is on principles over trends. Trends come and go, but these habits ground you in what truly works – proactive leadership, clear goals, thoughtful planning, and fostering meaningful relationships.   Adapting these habits to your daily life won't happen overnight, but even small shifts can create momentum. Pick one habit to focus on this week, cultivate a proactive, goal-oriented, collaborative environment, and see how it transforms your leadership and business growth.   Remember, no matter how fast the business world moves, the principles in this book will always hold relevance. They don't just make you more effective – they make you a better leader, decision-maker, and collaborator. So whether you need an excellent book or a knowledgeable bookkeeper, we are here to help.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]

This Podcast Is Episode 609, And It's About How Construction Business Owners Can Overcome Digital Hurdles

 

We are witnessing a remarkable transformation driven by Artificial Intelligence (AI) and automation. While these advancements promise to enhance efficiency and speed, business owners must recognize the enduring importance of soft skills in their teams for long-term success and competitiveness.   The construction industry has also experienced a significant transformation in recent years, driven by technological advancements. From project management software to drones and Building Information Modeling (BIM), construction business owners leverage these tools to enhance productivity, improve safety, and boost profitability.    This blog post will explore how you, as a construction professional, can thrive in today’s tech-driven environment and what skills you can build upon to remain adaptable.

Access to the best available tools and information is vital in almost any operation but is especially crucial in the competitive construction and home service industry. To help with your year-end bookkeeping tasks, take advantage of our exclusive 40% discount on Bookkeeping Templates (consulting, bookkeeping review, and outsourced accounting subscriptions excluded) and Construction Accounting Academy classes through January 6, 2025. you can use our promo code YEAREND40.

1. Embracing Construction Management Software

Construction management software is one of the most impactful technologies in the construction sector. Tools like Procore, Buildertrend, and CoConstruct offer a centralized platform for project management, enabling business owners to streamline communication, manage budgets, and track progress in real-time. By embracing these tools, construction companies can minimize delays, reduce errors, and improve team collaboration.

2. Adopting Building Information Modeling (BIM)

BIM technology has revolutionized the way construction projects are planned and executed. It allows for creating detailed 3D models that provide insights into every aspect of a project, from structural integrity to material quantities. This enables construction business owners to identify potential issues before they arise, reducing costly rework and enhancing project outcomes.

3. Utilizing Drones for Site Surveys and Inspections

Drones have become invaluable in the construction industry for site surveys and inspections. They offer aerial views of job sites, allowing for accurate measurements and progress monitoring without the need for labor-intensive methods. By incorporating drone technology, construction owners can increase efficiency, improve safety, and make more informed decisions based on real-time data.

4. Implementing Safety Management Tools

Safety is a top priority in construction. Technology has provided numerous solutions to enhance workplace safety, including mobile apps that facilitate real-time incident reporting, safety training, and compliance management. By investing in these tools, business owners can create a safer work environment, reduce accidents, and lower insurance costs.

5. Exploring Prefabrication and Modular Construction

Prefabrication and modular construction methods are gaining traction as they offer faster project completion times and reduced waste. By utilizing these approaches, construction business owners can enhance efficiency and deliver high-quality results to clients. This is especially important in a market that demands quicker delivery times and sustainable practices.

6. Focusing on Data Analytics

The rise of data analytics enables construction businesses to make informed decisions based on insights from past projects. By analyzing data on project performance, cost overruns, and scheduling, owners can identify trends and areas for improvement. This data-driven approach can lead to more successful project outcomes and increased client satisfaction.

In this regard, the World Economic Forum’s Future of Jobs Report highlights the disruption of skills we will see in the coming years, pinpointing critical competencies for future success:

• Analytical thinking
• Creative thinking
• Resilience, flexibility, and agility
• Motivation and self-awareness
• Curiosity and lifelong learning

These skills are universally applicable, highlighting the need for adaptability across all sectors.

Essential skills for teams in small businesses:

1. Resilience

As AI takes over routine tasks, construction employees must redefine and adapt their roles to stay valuable. For a small construction business, having resilient team members is crucial. You must navigate challenges, upskill in new areas, and leverage AI technology to maintain relevance and drive business success.

2. Lifelong learning

With rapid technological changes, continuous learning becomes vital. Your construction crew should embrace a growth mindset and eagerly acquire new skills to stay ahead. Lifelong learning isn’t just about meeting professional development requirements; it’s about adopting the latest technologies to enhance business operations.

3. Ethical decision-making

Even with AI-generated insights, ethical decision-making remains essential. Contractors like you must weigh the broader impacts of your decisions, balancing legal allowances with moral considerations. This skill ensures that business decisions are compliant but also fair and equitable.

4. Collaboration skills

Today, employees are expected to be strategic partners, offering insights to drive business success. This means working closely with various teams and stakeholders in a construction business. Collaboration skills, including effective communication and emotional intelligence, are crucial for turning data into actionable insights and fostering strategic partnerships.

5. Business acumen

AI-driven insights are only valuable if applied with an understanding of the business context. Construction employees must grasp industry dynamics and strategic goals to provide meaningful advice. Cultivating curiosity, critical thinking, and problem-solving abilities is essential for developing business acumen.

Final thoughts

As the construction industry evolves, embracing technology is no longer optional—it is essential for success. Construction business owners who invest in technology and adapt to these changes will enhance their operational efficiency and position themselves as leaders in a competitive market. By staying ahead of the technological curve, you can thrive in a world that increasingly values innovation and efficiency.

Integrating AI and automation presents a tremendous opportunity for business owners. However, the real value lies in the human touch that complements these technologies. 

By emphasizing developing soft skills such as resilience, lifelong learning, ethical decision-making, collaboration, and business acumen, teams can thrive alongside AI, ensuring your business survives and thrives in the evolving landscape. 

My advice: Foster an environment that values these competencies to ensure your team is equipped for the future.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]

This Podcast Is Episode 607, And It's About Managing Stress, Prioritizing Wellness, And Spreading Holiday Cheer The holiday season is usually filled with joy and celebration. Still, it can also bring significant stress for construction business owners. With project deadlines, year-end financial tasks, and the hustle and bustle of the festivities, it's easy to feel overwhelmed.    Here are some strategies to help you manage stress and prioritize your well-being during this busy time of year.   1. Set Realistic Goals   As project timelines draw near their conclusion, it can be tempting to push for everything to be finished before the holidays. However, setting realistic goals for yourself and your team is crucial. Prioritize tasks that must be completed and recognize that some projects may need to be deferred until the New Year. This will help reduce pressure and allow for a more balanced method as the holidays approach.  

2. Embrace Time Management Techniques

Effective time management can be your best ally during the holiday season. Use calendars and to-do lists to map out work obligations and personal commitments. Block out time for breaks and leisure activities to ensure you're not solely focused on work. Adopting methods like the Pomodoro Technique can help you maintain productivity while allowing necessary downtime.

3. Establish Boundaries

As a business owner, it can be challenging to step away from work, especially when demands are high. However, establishing clear boundaries between work and personal life is essential for managing stress. Designate specific work times and communicate these to your team and clients. This will help prevent work from creeping into personal time, allowing you to engage in holiday activities fully.

4. Prioritize Wellness

Physical and mental well-being should be a core part of your holiday strategy. Regular exercise can help reduce stress levels and increase energy even in short bursts. Make time for healthy meals and hydration, and don't skip your sleep! Incorporate self-care activities you enjoy, whether reading, meditating, or pursuing a hobby. A nourished body and mind will make you more resilient to stress.

5. Practice Gratitude

Reflecting on what you're grateful for can shift your focus away from stressors and toward the positive aspects of your life and business. Whether it's your team's accomplishments this year or the support of family and friends, taking time to appreciate these can enhance your mood and outlook.

6. Involve Your Team

Your team is your greatest asset, and involving them in holiday planning can foster a sense of camaraderie and make them feel valued. Involve them in decisions about project timelines and holiday work schedules. Celebrate your achievements together with a fun gathering, which can strengthen bonds and create a positive atmosphere as the year wraps up.

7. Seek Support

If the holiday season feels particularly overwhelming, remember you're not alone. Don't hesitate to ask for support. Whether talking to a mentor, seeking advice from fellow business owners, or consulting a professional, sharing your challenges can lighten your emotional load and provide fresh perspectives.

Spreading holiday cheer can significantly impact communities and individuals, and there are many ways a construction company like yours can step up to make a difference. By engaging in community service, you not only make a positive impact but also strengthen your connection with the community, fostering a sense of pride and belonging. 

Here are some inspiring ways:

1. Community Service Projects: Organize volunteer days where employees come together to work on community improvement projects. This could include renovating local shelters, building playgrounds, or assisting in affordable housing projects, benefiting those in need.   2. Charitable Donations: You can donate some of your profits or resources to local charities and organizations supporting underprivileged families, homeless shelters, or food banks. This helps those in need and shows a commitment to community welfare.   3. Sponsoring Holiday Events: Sponsor local holiday events, such as parades, festivals, or tree-lighting ceremonies. Contributing financially or providing logistical support can create joyful experiences for young and old alike.   4. Toys and Clothing Drives: Organizing drives for toys, clothing, or food has become common among construction businesses. Employees can contribute these items, which are distributed to families struggling to make ends meet during the holidays.   5. Seasonal Parties for Families: Many companies host holiday parties or gatherings for employees and their families. These events help foster community and belonging while spreading holiday cheer through fun activities, food, and entertainment.   6. Employee Volunteer Programs: Encourage employees to take paid time off to volunteer for causes they are passionate about. This initiative promotes community service and strengthens employee engagement and morale.   7. Building for a Cause: Some companies have taken on projects specifically aimed at helping marginalized groups. For instance, constructing homes for needy families through partnerships with organizations like Habitat for Humanity showcases the industry's commitment to societal improvement.   8. Holiday Cards and Messages: To convey appreciation and warmth, send personalized holiday cards to clients, partners, and community members. Many construction companies also send messages celebrating their partners and the achievements shared throughout the year.   9. Support for Local Businesses: Support local businesses by sourcing materials locally or collaborating with them for holiday events. This will boost the local economy and foster a sense of community togetherness.   10. Promotion of Safety and Well-Being: During this festive season, you can organize workshops or webinars focused on safety and mental health. This will help employers prioritize their employees' well-being and ensure they return to work refreshed and ready for new challenges.

Through these initiatives, you can spread holiday cheer and demonstrate your commitment to positively impacting your neighborhood. Engaging in meaningful activities strengthens relationships with clients, employees, and the community, making the season brighter for everyone.

Conclusion

Remember, while the construction industry is demanding, it's crucial to prioritize your mental and physical well-being, especially during the festive season. By implementing these strategies, you can manage stress more effectively and enjoy the holiday period with your loved ones.

As we celebrate this festive season, let's take a moment to recognize the incredible efforts of everyone in the construction industry. Thank you for your commitment and craftsmanship. Wishing you and your team a joyful Christmas filled with love, laughter, and well-deserved rest. Your hard work and dedication have built not just structures but a strong community. May the New Year bring new projects and opportunities your way!

IMPORTANT NOTICE:

Recent changes to the Beneficial Ownership Information reporting requirements may affect your organization. Please thoroughly review these updates to comply with the latest regulations. Also, please pay attention to any deadlines and necessary documentation to maintain compliance.

Starting January 1, 2024, many U.S. businesses must report information about their beneficial owners, i.e., those who own or control the company. Businesses must report Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN), a U.S. Department of the Treasury bureau. The reporting, a requirement of the Corporate Transparency Act (CTA), aims to combat financial crime and corruption and must be completed by January 1, 2025.

Key points about the update:

Who needs to report:

Any company formed or registered in the United States, including:

• Corporations
• Limited Liability Companies (LLCs)
• Limited Partnerships
• Certain trusts

What information needs to be reported:

This includes the legal name, date of birth, and address of each beneficial owner, as well as identifying information like a passport or driver's license number. 

Filing deadline for existing businesses:

Companies formed before January 1, 2024, must file their beneficial ownership information by January 1, 2025. 

Filing deadline for new businesses:

Companies formed in 2024 must file within 90 days of formation. 

Where to file:

Beneficial ownership information must be submitted electronically through FinCEN's BOI E-Filing website. 

Potential consequences of non-compliance: Businesses that fail to comply with the beneficial ownership reporting requirements may face significant civil penalties and possible criminal charges. 

Please go directly to the FinCEN website for more information and answers to Frequently Asked Questions.

Keeping your records current is crucial for adhering to these new requirements. If you have any questions or need further clarification, please contact a legal expert specializing in compliance. We do not offer this service, but please feel free to contact me anytime when you need help with your construction bookkeeping, accounting, and business in general.

Disclaimer: This notice is for informational purposes only and does not constitute legal advice. For specific guidance, please consult with an attorney familiar with the CTA and its regulations.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]

 

This Podcast Is Episode 606, And It's About Construction Business Review - What Went Right Or Wrong This Year he construction industry is dynamic and challenging, and a business's success or failure can hinge on various factors. As we approach the end of another year, it's essential to take a step back and assess your company's successes and challenges.    Contracting is notorious for its complexities and ever-changing landscape. It is crucial to evaluate what worked well, what didn't, and what lessons we can carry into the following year. These are my key takeaways from phone chats and emails with our clients, industry friends, and followers. Use this as a template - remove, add, and reflect on this list to hold yourself accountable for what you can improve.   What Went Right   1. Embracing Technology   Your commitment to technology was one of the most significant positive shifts this year. Implementing various project management software has streamlined your processes and improved team communication. This investment increased efficiency and enhanced collaboration, allowing you to meet deadlines consistently.   2. Strong Client Relationships   Focusing on building strong relationships with your clients pays off tremendously. Most of you have secured several repeat contracts by maintaining open lines of communication and prioritizing customer service. Satisfied clients shared positive reviews, which helped you to attract new business through referrals. This year, we learned that transparency and trust are invaluable in fostering long-term partnerships.   3. Financial Management Improvements   We made a conscious effort to improve your financial planning and management. Developing a more robust budgeting system and closely monitoring cash flow allowed you to navigate unpredictable economic fluctuations more effectively. This proactive approach has prepared you to make better-informed decisions moving forward.   4. Commitment to Sustainability   As clients increasingly value sustainability, you have embraced eco-friendly construction practices. By incorporating green building methods and materials into your projects, you have met client demands and differentiated yourself from competitors.    5. Continuous Learning and Training    We are proud of our Construction Accounting Academy students and the contractors who took their certifications and licenses. Encouraging ongoing employee education and training ensures that you and your team remain adaptable and knowledgeable about industry trends and practices. A skilled workforce is pivotal to delivering high-quality work.   What (Mostly) Went Wrong   1. Labor Shortages   Despite the successes, there are significant setbacks due to the ongoing skilled labor shortage in the construction industry. Attracting and retaining talented tradespeople proved challenging, leading to project delays and impacting quality. This highlighted the need for better recruitment strategies and a stronger focus on employee retention.   2. Inadequate Project Planning   Project planning sometimes fell short, leading to cost overruns and missed deadlines. Although you made strides in overall project management, you learned the hard way that comprehensive planning, including risk assessments and resource allocation, is vital for successful project execution.   3. Neglecting Marketing Efforts   While most excelled in many areas, some of your marketing strategies took a backseat this year. You missed potential project opportunities without an effective online presence and outreach efforts. This experience underscored the importance of prioritizing marketing and business development in a competitive landscape.   4. Safety Compliance Issues    Although you have generally maintained a safe work environment, you've encountered a few instances of oversight regarding safety regulations. These moments served as crucial reminders of the importance of strict compliance. It is necessary to review safety training protocols to prevent any future incidents.   5. Bookkeeping   Neglecting bookkeeping in your construction business can lead to significant challenges that may hinder your overall success. Accurate financial management is crucial in this industry, and overlooking bookkeeping tasks can have far-reaching consequences. Particularly with your cash flow -inconsistent tracking of income and expenses can result in shortages and tax issues - paying penalties or fines that could even attract attention from tax authorities due to discrepancies.   Poor practices can also lead to disputes over unpaid invoices or discrepancies with subcontractors and suppliers, damaging relationships crucial to your business.   As construction bookkeepers and accounting specialists, our contributions extend beyond simply recording transactions. By implementing efficient bookkeeping practices, we play a crucial role in shaping your construction business's financial stability and growth. Regular reviews and updates of financial practices can help your company adapt to challenges, seize opportunities, and ultimately thrive in the competitive construction landscape.    Moving Forward   Reflecting on the year provides valuable insights into your strengths and weaknesses. You can enhance your operations by building on your successes—embracing technology and fostering strong client relationships. Simultaneously, addressing the areas where you fell short, such as improving labor recruitment and ensuring relentless project planning and bookkeeping, will be critical in your growth strategy for the coming year.   As we look forward to the new year, let's harness the lessons learned and strive for continuous improvement. The construction industry poses challenges, but with a proactive mindset and determination, we can navigate its complexities and position our business for more tremendous success in 2025. Here's to building a brighter future together!

IMPORTANT NOTICE:

Recent changes to the Beneficial Ownership Information reporting requirements may affect your organization. Please thoroughly review these updates to comply with the latest regulations. Also, please pay attention to any deadlines and necessary documentation to maintain compliance.

Starting January 1, 2024, many U.S. businesses must report information about their beneficial owners, i.e., those who own or control the company. Businesses must report Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN), a U.S. Department of the Treasury bureau. The reporting, a requirement of the Corporate Transparency Act (CTA), aims to combat financial crime and corruption and must be completed by January 1, 2025.

Key points about the update:

Who needs to report:

Any company formed or registered in the United States, including:

• Corporations
• Limited Liability Companies (LLCs)
• Limited Partnerships
• Certain trusts

What information needs to be reported:

This includes the legal name, date of birth, and address of each beneficial owner, as well as identifying information like a passport or driver's license number. 

Filing deadline for existing businesses:

Companies formed before January 1, 2024, must file their beneficial ownership information by January 1, 2025. 

Filing deadline for new businesses:

Companies formed in 2024 must file within 90 days of formation. 

Where to file:

Beneficial ownership information must be submitted electronically through FinCEN's BOI E-Filing website. 

Potential consequences of non-compliance: Businesses that fail to comply with the beneficial ownership reporting requirements may face significant civil penalties and possible criminal charges. 

Please go directly to the FinCEN website for more information and answers to Frequently Asked Questions.

Keeping your records current is crucial for adhering to these new requirements. If you have any questions or need further clarification, please contact a legal expert specializing in compliance. We do not offer this service, but please feel free to contact me anytime when you need help with your construction bookkeeping, accounting, and business in general.

Disclaimer: This notice is for informational purposes only and does not constitute legal advice. For specific guidance, please consult with an attorney familiar with the CTA and its regulations.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]

This Podcast Is Episode 605, And It's About The Power Of Accurate Job Costing In Your Construction Business Have you ever wondered how successful construction companies accurately price custom projects? The secret is in a method called Job Costing. For small business owners like you, understanding this process could be the key to increasing your profitability and ensuring that every job is priced right.    Welcome to a world where every material, labor, and overhead cost is meticulously tracked to unveil the actual cost of doing business. Let's explore Job Costing, how it works, and how you can leverage it to enhance profitability.   Understanding Job Costing   Job Costing is a way to assign costs to specific jobs or projects. Unlike methods that evenly spread costs, this approach focuses on the details—tracking materials, labor, and overhead for each job. This makes it especially useful for businesses handling custom projects, particularly construction services like remodeling or home building.  

Key Concepts

The key elements of job order costing are direct materials, direct work, and overhead. Direct materials are raw materials used in a project, while direct work involves workers' wages directly tied to the project. Overhead encompasses indirect costs like rent and utilities. Understanding these terms helps you track and allocate expenses accurately.

How Job Costing Works

The process begins by defining the job and assigning it a unique identifier. This helps track all related costs. Next, businesses document materials used, calculate labor costs and apply overhead based on a predetermined rate. Finally, all these costs are summed to determine the total job cost.

Imagine a custom furniture maker tasked with creating a bespoke dining table. The direct materials are wood and varnish, while direct work (staffing) includes the carpenter's hours. Overhead might consist of electricity used during production. The business can accurately price the table by calculating each element, ensuring profitability.

Benefits

Accuracy

Job Costing is all about precision. It helps you avoid guessing and gives you confidence that your prices cover your expenses and help you stay profitable. This accuracy lets you set competitive prices and maintain a healthy bottom line.

Bespoke design

Job Costing is a game-changer for businesses that handle bespoke orders. It allows for detailed cost breakdowns, ensuring each price reflects the actual cost of the custom work. This tailored approach keeps businesses competitive and fair.

Decision making

Understanding the actual cost of each job means making more intelligent decisions. It helps budget, forecast expenses, and identify the most profitable projects. This insight leads to better project selection and pricing strategies. With job order costing, businesses can confidently make informed decisions that positively impact their bottom line.

Challenges and Solutions

Common challenges

Implementing Job Costing involves challenges such as accurate tracking, complex record-keeping, and time consumption. Overhead allocation poses another difficulty, requiring careful consideration to ensure fairness.

You can use strong tracking systems and conduct regular checks to address these challenges. Teaching employees how to manage job order costs well and using software to automate tasks are also helpful.

Real-world examples

Consider a construction company like yours that uses Job Costs to build custom homes. By tracking each material and each labor, they ensure prices reflect actual costs, enhancing profitability.

Lessons learned

These examples show the importance of detailed cost tracking. Accurate records enable businesses to set appropriate prices and understand profitability. By reviewing these insights, companies can make informed decisions that boost their bottom line.

Implementing Job Costing in Your Construction Business

To start using job order costing:

1. Define your jobs clearly and use unique identifiers for tracking.
2. Document all materials and person-hours involved, calculating total costs accurately.
3. Begin with small projects to refine your process.

Better practices

This includes regular audits to ensure accuracy, using technology to streamline processes, and training staff thoroughly.

Much better: Hire or Outsource a Construction Bookkeeper/Accountant.

A material receipt can be coded to any of a dozen or more accounts or item codes depending on whether it is a direct cost, indirect cost, Work-In-Progress, retention, warranty, overhead, administrative, or other expense. Putting costs in the wrong place can be disastrous, like baking a cake and putting in a cup of salt instead of sugar because they both look the same.

Construction accountants think holistically because Job Costing Reports differ from Profit and Loss reports. Job costing reports hardly match any financial reports because economic reports are accumulated vertically, while Job Costing Reports are accumulated horizontally.

Conclusion

Understanding costs is paramount in business. Job Costing is a systematic way to price custom projects in your Construction Business, ensuring profitability and competitiveness. While challenges exist, they are surmountable with the right strategies and tools. Job Costing could be the key to unlocking hidden profits in your business.

Should you need guidance, feel free to reach out. We'll be happy to assist you.

IMPORTANT NOTICE:

Recent changes to the Beneficial Ownership Information reporting requirements may affect your organization. Please thoroughly review these updates to comply with the latest regulations. Also, please pay attention to any deadlines and necessary documentation to maintain compliance.

Starting January 1, 2024, many U.S. businesses must report information about their beneficial owners, i.e., those who own or control the company. Businesses must report Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN), a U.S. Department of the Treasury bureau. The reporting, a requirement of the Corporate Transparency Act (CTA), aims to combat financial crime and corruption and must be completed by January 1, 2025.

Key points about the update:

Who needs to report:

Any company formed or registered in the United States, including:

• Corporations
• Limited Liability Companies (LLCs)
• Limited Partnerships
• Certain trusts

What information needs to be reported:

This includes the legal name, date of birth, and address of each beneficial owner, as well as identifying information like a passport or driver's license number. 

Filing deadline for existing businesses:

Companies formed before January 1, 2024, must file their beneficial ownership information by January 1, 2025. 

Filing deadline for new businesses:

Companies formed in 2024 must file within 90 days of formation. 

Where to file:

Beneficial ownership information must be submitted electronically through FinCEN's BOI E-Filing website. 

Potential consequences of non-compliance: Businesses that fail to comply with the beneficial ownership reporting requirements may face significant civil penalties and possible criminal charges. 

Please go directly to the FinCEN website for more information and answers to Frequently Asked Questions.

Keeping your records current is crucial for adhering to these new requirements. If you have any questions or need further clarification, please contact a legal expert specializing in compliance. We do not offer this service, but please feel free to contact me anytime when you need help with your construction bookkeeping, accounting, and business in general.

Disclaimer: This notice is for informational purposes only and does not constitute legal advice. For specific guidance, please consult with an attorney familiar with the CTA and its regulations.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]

This Podcast Is Episode 604, And It's About Stop Chasing Payments - How To Streamline Your Construction Receivables Running a small construction business is a constant juggle, and managing your receivables is one of the more frustrating tasks. How often have you been waiting on overdue invoices? Do you have enough cash flow to cover next month's expenses? If this sounds familiar, you're not alone. Many small business owners need help keeping their accounts receivable in check, which can ultimately impact their business's health and sustainability.   This guide will provide practical steps to streamline your invoicing process, confidently approach past-due invoices, and ensure steady cash flow.   Understanding the importance of timely invoicing   Timely invoicing is more than just good business practice; it's critical to maintaining a healthy cash flow. When invoices go unpaid, your cash flow takes a hit, potentially affecting your ability to pay suppliers, cover payroll, or invest in growth opportunities. By sending invoices promptly, you lay the foundation for timely payments.   Studies show that businesses that practice timely invoicing and set clear payment terms see fewer delays and disputes.  

Setting clear payment terms and policies

You need crystal-clear payment terms and policies to avoid confusion and ensure your clients understand their obligations. These should be outlined in every contract and reiterated on every invoice. Here are some essential components to consider:

• Due dates: Clearly state when payment is due, whether upon receipt, net 30, or another timeframe.
• Late fees: Specify any penalties for late payments, such as interest or a flat fee. This encourages prompt payment and offsets the cost of delays.
• Payment methods: Offer several payment options, such as bank transfers, credit cards, and digital wallets, to make it convenient for clients to pay.

Having these terms laid out upfront will reduce misunderstandings and set expectations.

Leveraging invoicing tools and templates

Gone are the days of manual invoicing and spreadsheet tracking. Today, there are numerous invoicing software options that can automate and streamline your billing process. These tools offer templates that ensure consistency and professionalism.

Tools like QuickBooks and Xero allow you to automate invoice generation and send reminders, and they integrate with your accounting systems. The result? Less time spent on paperwork and more time focusing on your business.

Strategies for collecting past-due invoices

Let's face it: Chasing overdue invoices is a task few enjoy. However, it's essential for your cash flow. Here's how to approach it:

• Polite reminders: Start with a friendly reminder email shortly after the due date. Acknowledge that oversights happen and provide an easy way for them to pay.
• Follow-up calls: Don't hesitate to pick up the phone if emails go unanswered. Sometimes, a personal touch is all it takes to resolve the issue.
• Overdue statements: Send a statement outlining all overdue invoices and any applicable late fees. This formal documentation can prompt action.

Remember, consistency is critical. Establish a routine for following up on overdue invoices and stick to it.

Offering incentives and payment options

Offering incentives can encourage timely payments. Consider providing a small discount for early payment, an attractive option for clients looking to save a little cash. Additionally, the flexibility of multiple payment methods can remove barriers to prompt payment.

For instance, offering an early bird discount of 2% for payments made within 10 days can motivate clients to pay sooner rather than later.

Understanding outstanding vs. past due invoices

It's crucial to distinguish between outstanding (not yet due) invoices and past-due invoices. Outstanding invoices are simply payments expected at a future date and don't require immediate action. On the other hand, past-due invoices have missed the agreed payment date and need your attention.

Managing these categories effectively saves resources on invoices that still need follow-up.

Managing receivables efficiently is vital for small business success. By implementing the strategies above, you can reduce time spent chasing payments and improve your cash flow. This sense of accomplishment in effectively managing your receivables can empower you and contribute to your business's success. Remember, the goal is to create a seamless process that encourages timely payments and reduces disputes.

Acknowledging the need for construction bookkeeping help is crucial to enhancing your company's financial health. Managing a wide range of projects can become overwhelming as a contractor, especially when keeping track of expenses, invoices, and payroll. By seeking professional bookkeeping assistance, you will streamline your financial processes and free up time to focus on what you do best—building and growing your business. This relief from the burden of financial management can bring a sense of control and peace of mind.

If managing your receivables becomes overwhelming, consider enlisting a professional bookkeeper or accountant specializing in construction finances. We can help with your invoices, expenses, payroll, and financial reporting, allowing you to focus on your primary business activities.

Final thoughts

By recognizing the importance of effective bookkeeping, you position your construction business to receive blessings through profits and build a solid foundation for longevity and success.

As we reflect on the joy and warmth of being with family and friends yesterday, I want to take a moment to express our heartfelt gratitude to every one of you. Thank you for being part of our business journey. Spending time with loved ones and sharing a meal reminds us of the importance of connection and community.

I am sincerely thankful for our business relationship and the mutual growth in the construction industry, which enriches our daily lives. Let's carry this spirit of gratitude into the days ahead, finding opportunities to appreciate the little things and support one another.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]