0412: The Right Accounting Software Can Increase Your Profits

03.26.2021 - By Contractor Success Map with Randal DeHart | Contractor Bookkeeping And Accounting Services

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This Podcast Is Episode Number 412, And It's About The Right Accounting Software Can Increase Your Profits Most construction business owners who use accounting software quickly master the basics. They automate processes like invoicing and payroll, track expenses, and view real-time financial reports to manage cash flow and make better business decisions.  What three reports do you need for your construction business? #1 Cash On Hand - This report shows you how much cash you have in your checking accounts, savings accounts, payroll accounts, hip national bank (your wallet), and petty cash box in your office.  #2 Cash Coming In - This report shows you how much cash your customers and clients owe you and how much of it will be likely to receive in the next 30-60-90 days. #3 Cash Going Out - This report shows you how much cash you owe yourself, suppliers, employees, and the taxman and how much of it will be likely to pay out in the next 30-60-90 days. It used to be QuickBooks was the only real option for construction companies to generate a decent set of Financial Reports and Job Costing Reports, and that is still true. Our biggest pain point with QuickBooks has always been it is like a large semi-truck with two trailers capable of moving massive amounts of data which is great if your construction company needs Work In Progress (WIP) Reporting, Pay Application Invoicing For Large Residential Remodels, Pay Applications For Commercial Tenant Improvement (TI), Job Deposit Tracking, Retention Tracking, Schedule of Values, Complex Job Costing Reporting Services and other construction reporting which we provide. What about the contractors and service companies like plumbing contractors, electricians, handymen, drywall repair, carpet cleaners, HVAC, remodeling contractors that have jobs lasting a few days, locksmiths, and hundreds of other service companies? Xero Accounting Online To The Rescue The short video below shows side by side the primary Financial Reports contractors need in living color. Please take a look and leave a comment; we want to know what you think. Do You Own A Small Contracting Company? Do you look forward to the day where you can press a button and know where all your money is because it is stressful to wing it like you are doing now? Perhaps you own a service and repair firm specializing in plumbing, electrical, HVAC, or maybe a handyman service or someone who does small construction projects that last from a few hours to a few days, and you only need to give your customer or client one invoice? If this describes you, then perhaps Xero is a better fit for you than QuickBooks. We offer both Xero and QuickBooks bookkeeping services for construction contractors and have found the dividing line is how you get paid. QuickBooks Works Best If You Take Job Deposits Have Change Orders Issue Multiple Invoices Need Job Costing Reports Need Payment Applications Periodic Invoices For Bank draws Need Complex Construction Accounting Reports Xero Accounting Online Works Best If You Have Simple Jobs With One Invoice Need Basic Key Performance Indicator Financial Reports Now that you have a better understanding of the right accounting software for your construction company, it's time to take advantage of critical insights that can improve customer care and increase sales.  Gain insights that increase sales If you're not tapping into your QuickBooks or Xero analytics to better understand your customers, you're missing a major opportunity to close more sales. Most accounting software can highlight your biggest spenders and buying trends. How would knowing who your best customers are, your biggest selling services, and how much each customer spends impact your marketing decisions – not to mention help you fine-tune your sales strategies? By the same token, when you know which products and services aren't selling, you'll be able to make more profitable purchasing decisions. Improve customer care and boost profits QuickBooks and Xero can offer peace of mind when you know your financials are accurate and up to date. But another major advantage of an online accounting solution is how much time you'll save by automating processes like invoicing and payroll – giving you more time to follow up with clients and seek out new prospects. We all know how important the personal touch is when it comes to sales. So why not use your accounting software customer data to help remember your customers' birthdays or thank them when they've hit a milestone – spending more than $5,000 on your services, for example?  With enhanced customer data at your fingertips, your business will earn a reputation for personalized service. You'll be able to respond quickly when a customer calls with a question about a product or an order. And you'll be able to suggest substitutions and offer valuable add-ons based on their buying preferences, so upselling becomes a snap. Final thoughts  Savvy business owners take the first step toward better profitability when they stop thinking of accounting software as only a financial management solution and start thinking of it as a comprehensive tool for business growth. You may be surprised at the many ways accounting software can help you better serve your customers or improve your sales strategies when you look at its true potential.  Now that you have a handful of ideas for better use of your accounting software, what will you do differently to enhance customer care, improve your profits and continue to grow your construction business?  We make everything painless for you, whether you are using QuickBooks or Xero. Would like to outsource or Do-It-Yourself - we can offer you services that fit well with your budget and construction business needs.  If you missed it, we have an ongoing promotion for our blog subscribers and podcast listeners! You can use this code in both our Fast Easy Accounting Store and Construction Accounting Academy for a 30% Discount: SPRING30 Code is valid up to Sunday, March 28, 2021, at 11:59 PM. (Please note: Offer does not apply to Outsourced Accounting, Bookkeeping Review, or any Consultation and Training products; you can use it, however, to purchase any course or monthly subscription classes in Construction Accounting Academy). 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 how to manage 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]  

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