In construction bookkeeping, you must keep several financial records to track them accurately and comply with regulations. By automating receipt management and expense tracking, Shoeboxed saves construction bookkeepers significant time. This allows them to focus on more strategic tasks such as financial analysis and planning. Users can also create custom tags to categorize expenses according to specific projects or clients, facilitating easier tracking and reporting of project costs. Make time to keep these journals current to track business expenses and receipts at any given time.
Tip #5: Use milestone payments to improve cash flow for construction businesses
Consistently generating these reports allows contractors to make informed financial decisions and adjust project strategies if needed. Using Hubstaff’s time tracking app for construction businesses, you can automatically generate time cards for your workers. This ensures payroll receives accurate data for the time workers spend on-site, as well as time spent traveling.
Track Labor and Material Costs Separately
The decentralized nature of the industry makes construction bookkeeping so unique. Here are six aspects of the industry that make effective construction bookkeeping vital. Construction bookkeeping, while challenging, is an essential part of running a construction company.
Manage your construction bookkeeping effectively
- If it’s too clunky or complicated, you might want to choose something else.
- One of the most significant challenges in construction is dealing with fluctuating material and labor costs.
- As the construction industry continues to evolve, adopting robust bookkeeping practices and integrating advanced tools will be essential for sustaining growth and profitability.
- Better bookkeeping equals a better construction company which means more money in your pocket.
- Construction companies must factor this in when determining upfront payments or expenses.
Shoeboxed provides a mail-in service for physical receipts if you want to outsource your scanning. Shoeboxed scans, digitizes, human-verifies, and uploads the receipts into your account, where they are stored securely in the cloud. Then, place a second set of numbers that reflect the retainage amount, which should be shown as a credit. Here are some things to keep in mind when bookkeeping for construction firms. For one, payroll for construction is more complex, and involves much more than agreeing on a flat rate for every project. Projects like government-funded projects require you to pay a prevailing wage, a minimum hourly rate that’s typically higher and determined by each state’s Department of Labor.
Construction Bookkeeping Best Practices
- When using this method, you recognize revenue as a percentage of the work your company completed during a period.
- The decentralized nature of the industry makes construction bookkeeping so unique.
- By working with a professional accounting service, you can develop a growth strategy based on sound financial planning and construction bookkeeping principles.
- Dave Nevogt is an American entrepreneur and the co-founder of Hubstaff, a workforce management software company.
Better bookkeeping equals a better construction company which means more money in your pocket. Moreover, storing your documents electronically can help you maintain a paperless environment, thus contributing to preserving natural resources. To ensure your electronic documents are construction bookkeeping safe, you may consider using a reliable cloud-based storage platform that provides encryption and access control features. Additionally, you should regularly back up your data to prevent any loss of information due to technical issues or cyber-attacks. By following these best practices, you can streamline your document management process and be well-prepared for future audits or legal inquiries.
Turn receipts into data with Shoeboxed 
There are several factors that distinguish bookkeeping in construction from other industries. Whether you’re an owner of a commercial or industrial cleaning company, or running a residential business, it’s only natural that you’re always on the lookout for new ways to… Set limits, turn tracked time into automated timesheets, and send invoices with Hubstaff. If https://azbigmedia.com/real-estate/commercial-real-estate/construction/how-to-leverage-construction-bookkeeping-to-streamline-financial-control/ you manage projects, you probably hear “objectives and deliverables” a hundred times daily.
