Accounting and bookkeeping is an essential aspect of running any business successfully. This is especially important for construction businesses. That’s because you will be handling different projects with tight deadlines.
This makes it easier to forget your accounting. Unfortunately, handling business finances can be quite challenging, especially if you’re not a professional accountant.
Additionally, construction business owners face unique accounting challenges compared to other businesses. Fortunately, we have listed five key bookkeeping tips to help you manage your accounting.
1. Hire a Professional Accountant
Managing your own accounting is challenging but not impossible. However, construction companies have very complex processes. This often results in expensive mistakes.
Therefore, it’s advisable to hire a professional to help you handle all your accounting. The professional accountant will help you reconcile different transactions from numerous projects. They will also help you with quarterly tax payments, returns, and report generation.
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2. Get an Accounting Software
Spreadsheets and invoice templates could lead to expensive accounting errors. But getting professional accounting software will help you avoid these mistakes. It will also make your bookkeeping processes easier.
Accounting software will make it easier to track your expenses and send clients their invoices. You will also be able to keep an eye on payment status and generate important financial reports for your business.
Using accounting software is one of the most important business bookkeeping tips. That’s because clients are more likely to trust working with you instead of a business with manual accounting methods.
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3. Always Pay Your Taxes
It’s recommended to always stay up to date on your tax payments. This will help you avoid unwanted surprises when tax time approaches. You can use your accounting software and a professional accountant to estimate quarterly tax payments.
There are two approaches construction companies take when calculating estimated taxes: total percentage and completed contract. The total percentage method calculates a company’s projected taxes using quarterly income.
The completed-contract method means calculating your taxes based on income per project. Make sure you choose the right approach based on your business needs.
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4. Track Your Business Expenses
Keeping track of your expenses is a critical aspect of ensuring you’re up to date on your accounting. These job costs often include payroll services, materials, and equipment purchases.
List the date of the expense, the amount paid, and the reason for payment. Categorize the costs based on individual projects and services. This helps you track the money you spend on expenses and how much you get paid on different projects.
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5. Keep Track of Everyday Expenses
One of the most basic bookkeeping tips is recording your daily financial transactions. These include labor costs, accounts receivable, material costs, and accounts payable.
Remember also to include a description of the expense and transaction date. You can also record the amount received.
Consider using a construction billing and invoice template such as getbuilt.com. This software will help you record all the generated income from different projects.
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These Bookkeeping Tips Will Help You Stay Updated on Your Accounting
Follow the above bookkeeping organization tips. This will help you stay current on your accounting and avoid common mistakes.
Using accounting software is one of the most essential bookkeeping tips for entrepreneurs. That’s because it helps you save time on tax preparation and invoicing processes.
Did you like this article? Check out other posts on our site for more bookkeeping tips.
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