I’m just returning from Remodeling Excellence week in Kansas City where I not only facilitated two fantastic Remodelers Advantage Roundtables groups, but I also had several sessions during the week’s capstone event: The Remodelers Summit.
As usual, I heard some fascinating stories and learned more about some of the unique challenges Remodelers face. Unfortunately, I also heard an all too common complaint. One attendee said, in no uncertain terms, “to me, probably the least understood part of running a business is the accounting side.”
This always saddens me to hear. Especially since Remodelers Advantage has so many wonderful resources to help you learn the ins-and-outs of accounting.
But before I could comment, he asked: “What would you say are the top five issues that small contractors face when it comes to accounting?”
What an excellent question!
So good, in fact, that I couldn’t wait to share it with all our PowerTips readers.
So…without further adieu:
THE TOP 5 ACCOUNTING ISSUES REMODELERS FACE
#5. Paying the position too little, and not respecting the position enough. The attitude “oh, my girl does that, I don’t touch it” is still too pervasive in young (and some old) companies.
#4. Failing to tie job costing into project management culture. Too many field people have no idea what the accounting/bookkeeping department does and why it matters. This can lead to less than stellar communications, the backbone of good decision making.
#3. Dismissing an annual company budget or not getting it entered into your system (QB or Sage) so that it can become a useful tool for protecting profit.
#2. Not understanding what makes up OVERHEAD as opposed to COGS, as well as not understanding the importance of having your gross profit from the financial statements tie into that of the job costs.
And, BY FAR, the number one accounting issue that remodelers face…
#1. Not believing you need to understand accounting and the related issue of not believing you need to understand your financial statements. Without understanding your financial statements, you have no ability to know if the person you have tasked with getting the information into a system is doing it right.
https://www.remodelersadvantage.com/events/master-your-remodeling-business-workshop/. Meet Judith LIVE at the Master Your Remodeling Business Workshop! Learn More