Construction Bookkeeping And Accounting - Is something you understand then learn. We have heard 100's of people say QuickBooks is easy and that is true!

Operating A Backhoe - Is easy too! I found out just how easy it is to find underground utilities and bring them to the surface with the greatest of ease like the daring young man flying man on the trapeze. Just like the circus performer; it was entertaining and it cost a more to than an evening of entertainment!

This Is Lucy's Story - One day she answered an employment ad from a general contractor, Bruno Brickman, who was looking for a cheap bookkeeper who understood construction bookkeeping and accounting and knew how to use QuickBooks For Contractors. She could get for $15.00 an hour for 10 hours a week. Lucy has a good heart and wants to do her best so she contacted us and I invested an hour of my time to share a quick overview of what I call the Nine Steps.

A Short While Later - I stopped by to see how everything was going for Lucy and her employer. We reviewed the Nine Steps to see how she was using what she had learned. 

Step #1  Sort Paper Into Manageable Piles And Be Quick About It!

Lucy Was Not Paying Close Attention - To the contractors, construction workers, USPS mail carrier, shipping and receiving clerks, warehouse workers and other folks that stopped by her desk to leave a few pieces of paper for her to deal with. Always remember the ocean is a collection of drops of water.

Step #2 Simple Data Entry

After The Sorting - Was done Lucy was having fun putting in checks, bills and simple invoices because that it is easy.

Step #3 Payroll And Tax Reporting

Payroll And Tax Reporting - Can bring out the worst in people as Lucy soon discovered. In fact some of the other employees suggested she was ready to bite the next person who turned their timecard in late and expected to get paid on time.

Step #4 Reconcile Bank & Supplier Statements

Reconciling Statements - Was something Lucy could not understand during our brief chat and she had not done anything to learn about it since then either. It seemed to Lucy that reconciliations were just a waste of time and busy work.

When Checks Started - Bouncing and suppliers were being paid twice for the same bills Bruno got concerned and invited his outside construction accountant, Randal, to come to the office and train Lucy on how to reconcile statements. 

After 20 hours - Training over a 5 day period at $150 per hour totaling $3,000 Lucy had just enough training to do the reconciliation part of the job. Randal's patience were wearing thin because Lucy did more talking, arguing and telling Randal how different things were at her previous job, where the general contractor went bankrupt. Lucy did mention several times the bankruptcy was because her previous boss was incompetent and she saw it coming.

It Was Obvious - Lucy needed a lot more training; however, Bruno was not about to spend any more money on any direct training. Unfortunately Bruno continued paying for training in the form of bounced checks, missed tax payment penalties and interest, lost early payment discounts and other costly errors.

During The Quarterly Review - Randal showed Bruno a production report that revealed the cost of having Lucy on the payroll for twelve weeks was in excess of $1,000.00 a week when Bruno had expected to only spend $150.00 a week plus a little money for payroll taxes and overhead. Bruno was not a happy general contractor.

Step #5 Complex Journal Entries

Bruno Was Surprised - To learn that complex journal entries like entering a HUD-1 statements and complex Payment Applications similar to the G702 and G703 format was something else Lucy knew absolutely nothing about.

Lucy Refused - To put up with any more training from Randal because decided those things were not in her job description.

When A Bookkeeper - Refuses to do something related to the construction bookkeeping and accounting functions of the construction business it is usually a sign of bad bookkeeper traits Bruno would have saved a lot of time, money and heartache if he had simply paid attention.

Bruno Outsourced - The complex journal entries, HUD-1 Statements and complex payment applications to Fast Easy Accounting because the work needed to be done right and on time.

Step #6 Prepare Tax Reports

Lucy Had Filed - The Payroll Tax Reports at her previous job, not always on time but she got around to doing them eventually so Bruno left her alone to do them.

Step #7 Key Performance Indicators

The KPI - Key Performance Indicators are simply five reports take five minutes and they give the construction business owner a snap shot of how the business is doing fnancially and taken seriously can lead to some serious cash coming into their business, and staying there.

They Are - Cash Available / Accounts Receivable / Accounts Payable / Profit And Loss / Balance Sheet as shown below:  For more detail click here

Bruno Asked Lucy - To prepare these and put them on his desk every day; unfortunately Lucy had more important things to do so when Bruno asked about them she would get upset and a bit angry then remind Bruno about some other pressing problem he needed to handle. After a while Bruno quit asking.

Step #7 B No Key Performance Indicators

Bruno Got A Call - From a friendly competior who said he was going bankrupt and asked if Bruno wanted to buy any of his tools and equipment before the auction. Bruno asked what happened and the fellow mumbled something about bookkeeper took some money, unfiled and overdue taxes, material suppliers cut him off for not paying his bills, his employees quit because their payroll checks bounced, The Department of Labor and Industries was getting ready to audit him for non-payment.

Step #8 The 5x5 Business Stabilizer

Bruno Remembered - Reading an article titled The General Contractor And The River Of Construction Commerce and there was something about the five key reports in it and some other information that he could review because he certainly did not want his construction business going bankrupt!

Step #9 Good Bookkeeping Leads To Informed Decisions

Bruno Found - A Construction Bookkeeping and Accounting firm that offered a Business Process Management System (BPM) for construction companies and got his business on track.

Lucy Found Employment - With a smaller construction company at lower hourly pay, with more hours. She had to use her car to run errands, get coffee for the boss in addition to being the bookkeeper. When nobody was watching she surfed the internet, updated her Facebook page and other social media sites, instant messaged her friends and talked with them for hours on her cell phone.

All is well that ends well and everybody got to go home happy!

PS.  Sometimes a bookkeeper has more direct access to creditcards and checking accounts than they should have

Warm Regards,

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