As a tradie in the construction industry, you’re bound to know just how challenging it can be to track and keep comprehensive records of multiple jobs, projects and builds. Although it can be pretty timely, we can’t stress enough how important consistent record-keeping is in your construction business.
So, what does this mean? Your payroll must be accurate with correct rates and annual leave or leave accruals, where applicable or you might face some hefty fines. You also need to track all the expenses of a job if you want to know the accurate profit figure of a project or job. Bookkeeping tasks must be regularly completed, so you can pull up up-to-date reports anywhere, anytime.
In construction accounting, the key areas you need to look after are your cash flow and job costing. If you have a well-managed cash flow, your construction projects can move on schedule. Forecast cash flow reports will also allow you to cover cost variations and unexpected expenses.
You also need to know whether your jobs and projects are profitable or not. Once you start assigning costs to specific jobs, you will be able to know the gross profit of each job. You can then split overhead expenses to know your net profit. No problem if your hands are full and you’re too busy growing your business – leave it with us and we’ll hand you the reports, easy as!
Other businesses can just use accounting principles that work in a steady market with constant prices but it’s different with construction businesses, which are often impacted by varying job quotes and seasonal trading. Figures are always a work in progress and need to be tracked. Construction businesses typically pay for direct and indirect costs before making progress claim payments (but ain’t it sweet when the cash flows in afterwards).
To know which projects can produce healthy profits and those you should be focusing on, it’s critical to track, report, and categorise direct costs and expenses in your construction business. You can use job management software that can help you accurately charge for variations and estimate bids on projects. Accounting software’s like Xero allow daily weekly and monthly reports from your job site to your accountant. Job management software is often accessed through the cloud, so no need to worry about processes – reports in the system can be saved and accessed by authorised users simultaneously.
Give us a yell and we’ll give you a rundown of some user-friendly job management software we can recommend to you and your team based on your needs. Completing and submitting progress reports and daily costs, timecards and changed orders will never be the same again! Your life will be a breeze.
Your Outside Team
Address: Level 2, 182 Vivian Street,
Te Aro, Wellington 6011, New Zealand
Mail: PO Box 24-457, Wellington 6142
Phone: 04 889 2975
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