To be a successful business owner in the construction industry, you must be able to control your expenses. Regardless of your line of work or how rich you are, nobody wants to waste their resources. Because of this, it is crucial to invest in an excellent strategy that will save you money.
As a builder working in a construction firm, it’s not uncommon to be poor at keeping your costs in check. The turnover rate of most builders is significant, but so are the underlying expenses.
Consider consulting with a dedicated accountant familiar with the complexities and compliance issues that arise while implementing accounting systems.
When you work in the construction sector, you deal with big money from big suppliers and service providers. In the incoming cash flow, it is easy to lose track of GST and Tax and over-commit. A Business Activity Statement must be filed, and the proper structures must be set up to minimise taxation.
However, this isn’t the key to maximising profit without wasting resources in your industry. To gain a competitive edge, you must reduce expenses and improve compliance. Modern technology advancements have made this attainable.
Tax planning and accountancy are two of the many services we offer here at Pearl Lemon Accountants. We aim to help you focus on your core business instead of worrying about compliance difficulties.
To get started right away, please get in touch with us.
We’ve got you covered.
Statistics reveal that 82% of small firms and 58% of large organisations utilise cloud accounting.
Why should you still outsource accountancy services if that’s the case?
The answer is simple: Computers do not handle tax returns or financial statements. Additionally, computers can’t really help you minimise your taxes to their greatest extent.
Keeping track and optimising your financial assets and liabilities requires the expertise of a chartered accountant (CPA). You won’t even have to worry about whether or not you’ve paid your taxes, reported your actual income, or paid back your bank loans if you work with a skilled construction accountant.
You can achieve financial stability and a brighter future with the aid of Pearl Lemon Accountants.
And well, isn’t it the goal of everyone to be financially stable?
Accounting gives you valuable information about your business structure, which you can use to make more informed choices. So apart from effectively running tax operations, you can easily upscale your business with excellent accounting services in your arsenal.
Outstanding Accounting services provide a comprehensive picture of the company’s activities, finances, and investments. This constitutes the bigger picture of any business. Accountants in charge of controlling costs rely on two types of accounting: cost accounting and management accounting.
Accounting is a key component of effective time management. Additionally, accounting can be used to manage and pay your building company’s staff and provide tax advantages.
Providing investors with reliable information is also catered for by notable accounting practices. Accounting processes help build organisations if they are to correctly assess their financial health and efficiently manage their operations.
Materials and building project costs have been rising, making it even more critical for building firms to save money through good accounting standards.
Accounting is one of the numerous tools that might make your job simpler and more profitable as a building contractor. Your funds will be easier to manage if you use accounting software, and with extra professional help, you can quickly scale your business through the roof.
Professional accountants can also give you tailored tax advice to handle your construction company finances and sell your business services more effectively.
Bookkeeping can be challenging, as you’re aware. Builders tend to have an unstable workforce, wage rates that vary by location, and many ongoing projects that vary in cost and duration. To set your business up for success, here are some bookkeeping tips that will keep you organised.
Open multiple business bank accounts to keep track of expenses and revenue. Reserve one account to receive payments from customers. From there, you can transfer money to other accounts as necessary. Another account should be used for your payroll service, and a third for building a cash reserve. An account for paying taxes is also a good idea.
By having separate accounts, you’ll be able to determine how much money your building business receives each month. You can ensure that no checks are written against payroll funds for non-payroll expenses.
This helps you better control how much money goes out.
Bookkeeping requires meticulous recording of business receipts. As a rule, you should avoid paying for anything in cash because those transactions will be harder to track in the future. Receipts help you identify where your money goes and serve as evidence of expenditures if you get audited.
Record information accurately, including details such as the exact name of the other party, the account number, the date, etc., whether you’re paying expenses or receiving revenue.
It would be best to use up-to-date software to log and track transactions. Ideally, you should keep separate bookkeeping journals for:
Tracking specific job costs – also known as “job costing” – is helpful because it allows you to pinpoint the specific costs of each project, which then allows you to prepare more accurate estimates and budgets.
You can also determine which types of projects are profitable and which ones to avoid.
This process involves breaking down projects into phases and listing the tasks needed to complete each phase. A task is then divided into three expense categories: 1) labour, 2) materials (direct and indirect costs), and 3) overhead. The costs are added together. In the future, tasks can serve as line items to be added or deleted from estimates as a potential project’s scope is defined.
It is common for contractors to wait until a project is nearly complete to record expenses or incoming payments. However, your books should always contain “wet ink” – updated figures and details that will keep you informed.
Unexpected expenditures can occur anytime, requiring immediate adjustment to a project’s budget or your company’s overall budget. In a more positive light, a properly documented and processed change order might mean you earn more income than anticipated.
Developing and maintaining these and other bookkeeping best practices isn’t easy. We’re here to guide you, improve your financial recordkeeping, improve payroll management, and even assist in identifying growth opportunities.
Our accountants have a combined experience of 100 years.
This work experience includes dealing with the more traditional parts of taxation, such as tax returns, self-assessment, end-of-year accounts, and VAT submissions. Payroll and financial audits are just two of the more complicated accounting tasks our team is good at.
So rest assured the finances of your firm or organisation are in competent hands. Furthermore, Pearl Lemon Accountants is a part of the Pearl Lemon Group, our parent company. Because of this, we can leverage processes that other businesses can’t. We are an international company because we have offices in Asia, Africa, North America, and Europe.
Our clients include sole proprietors, multinational corporations, and seven-figure businesses.
The general guideline is that costs must be incurred “wholly, exclusively, and necessarily” to carry out your firm’s day-to-day operations. Examples include business travel expenditures, insurance, accounting fees, computer hardware and software, telephone, stationery, home office, training, and so on.
For more detailed information, you can ask us.
It’s just as important to watch financial and operating costs as you do sales and revenue figures. To stay competitive, you must ensure that the jobs you take generate enough revenue that exceeds your expenses.
This includes overhead, labour, and materials for each project. Your job-costing practices should allow you to break down all expenses according to the project. With accurate data, you can make more accurate estimates, reduce risk, and analyse the profitability of each job.
This is where an accountant comes in.
It is possible to make needed price changes on the fly by tracking these costs so that your projects do not start losing money. In addition to accounting for unanticipated increases in supply prices, additional labour and equipment costs, and similar expenses, you should capture potential future claims for delay and scheduling.
At Pearl Lemon Accountants, we tailor our services to suit your desires and provide custom plans unique to you. Our prices vary depending on the services you select. Call us for a precise quote.
When you're thinking about starting a building company or your career as a builder, an innovative financial strategy is essential, rooted in accounting basics.
If you have an effective financial plan, you can reduce your administrative duties so they do not overshadow your customer relationships and ability to work independently. You can use accounting basics to reduce your company's costs, increase your profitability, and minimise your tax liability when you establish this strategy early in your company's lifecycle.
So if you want to build up your business's account, you need an accountant by your side.
We can be that accountant for you. Contact Pearl Lemon Accountants today!