If you’re in the construction industry, you understand how important it is to be reliable. Your clients hold you accountable for your work. Solid construction begins with the foundation of a sound, financially stable business. So when it comes to bookkeeping for construction companies, every detail counts.
Accounting can be a challenge for construction companies due to the large, often transient workforce and varied duration of contracts. But proper bookkeeping and construction accounting methods can go a long way in setting your business up for success.
5 Construction Bookkeeping Tips
There’s no standard accounting guide for construction companies. The best practices in the industry may not apply to every company because every construction company has different needs. However, it’s a good idea to keep these accounting tips in mind if you’re managing your company’s finances in-house:
1. Back Up All Relevant Records
Receipts, invoices and other documents are essential when it comes to managing your company’s finances. If you keep hard copies of these records, you’ll need to organize them so that it’s easy to find the documents you’re looking for. But you should also have a backup plan in case your documents are lost or damaged. Maintaining a digital record of these files is the best way to ensure their safety.
2. Record All Job Costs
Construction bookkeeping has many complexities, including keeping track of multiple jobs at the same time. Projects may differ greatly in length and size, which in turn leads to varying expenses. Your bookkeeper should maintain a record of every transaction that takes place during a given job. A breakdown of income and expenses for each project ensures that your company is making a profit.
3. Track Employee Hours Accurately
Another challenging aspect of accounting for construction companies is the large workforce. Your company’s team might include employees, contracted workers or a combination of both — and the construction workforce is often transient by nature. Your bookkeeper should diligently track the hours of everyone on your company’s payroll to ensure that you’re compliant with any applicable regulations.
4. Keep an Accurate Inventory of All Materials
It’s not uncommon to begin working on a construction project and realize that the job will require more labor or materials than originally anticipated. This is a normal part of the construction process. But if you’re constantly taking materials out of your inventory, your company can quickly go over budget. Keeping an accurate inventory of materials makes it easier to see where your resources are being used and budget accordingly.
5. Report on Projects in the Works
At any given time, your construction company might be taking on a variety of different projects. You should be reporting on completed projects as well as any project that is still in the works. This is essential because of the frequency of change orders and unexpected expenses that can occur during the course of the job.
Contact Marshall Jones Outsourced Accounting Services
When you manage a construction company in Atlanta, your focus should be on the project at hand. Outsourcing accounting services can save valuable time and ensure that your business is in a position for growth and financial success.
Let Marshall Jones handle the accounting side of your business. Contact us today to start working with one of our Certified Public Accountants and Advisors.