Construction Today - Volume 16, Issue 2 - 28
is the CEO
of Paro, the
outsourced finance and
for growing businesses. Paro's purpose is to
empower people to do
what they love.
able to target certain project categories that
tended to be more lucrative than others.
Yet another firm kept its finances in order
but failed to charge its clients sales tax.
Whoops. The firm was selling its services -
which are not subject to sales tax - alongside
taxable materials, which led to the confusion.
This mistake ultimately meant the company
had to absorb the sales tax for a pile of closed
projects, leading to lost margins.
Rather than incur the costs of bad bookkeeping, take charge of your finances to ensure
your company will still be around for future
jobs. Here's how:
1. Invest in accounting software - Technology is important for every aspect of your
company's finances, so it makes a lot of
sense to get high-quality accounting software. Look for an accounting platform that
allows you to track costs by project, which
is a standard feature with QuickBooks
Desktop Enterprise but is also possible
by using APIs such as TSheets or Scoro with
2. Move to the cloud - Paper processes
and physical time cards slow everything
CONSTRUCTION-TODAY.COM VOLUME 16, ISSUE 2
down. Technology allows you to easily sync your data with
various digital accounting platforms. Team members can track
delivery and receiving tickets by taking photos in the field and
uploading them to apps such as Expensify or Bill.com. Your
finance department can then effortlessly compare this information to original invoices.
3. Track costs with detail - If you are not already monitoring
revenue by client or project, you are missing out on a tremendous
amount of insight. Larger projects might warrant a project-specific
credit card or store account for all related transactions, but you
will want to establish other methods of grouping costs for smaller jobs. You can do this by adding another level of detail to the
transactions in the "Class Tracking" section of QuickBooks. You
can assign each project its own class code to help you track transactions with added detail.
4. Hire an experienced accountant - You might currently use an
office manager to handle your financials, but you are probably
missing out on the latest technologies as a result. When it is time to
implement cutting-edge efficiency tools, bring in an expert. A bookkeeper or accountant who has industry experience can set you up
for success early on. Instead of wasting budget on a full-time hire,
you might consider outsourcing certain tasks using freelancers.
In a perfect world, you would want to have accounting, payroll,
and project management systems in place long before you ever break
ground. Without a proper foundation, you will likely hit financial
snags that could topple your growing business. Thankfully, it is never
too late to install the proper systems to mitigate financial faults.