The following is an excerpt from an article I read in The Remodelers’ Advantage. The author was a facilitator at Remodelers Advantage Roundtable groups, and did a great job of capturing the essence of a discussion about some issues related to accounting that can make all the difference between a contractor thriving or merely surviving.
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.
To read the entire article, click here.
About Judith Miller
Judith is a top level strategist who knows remodelers and the numbers – inside out and backwards. She excels at working with owners, bookkeepers and controllers to see the truth in the numbers – from both a financial and job cost perspective!
Track It to Crack It.
Here at Profit Finder Pro Software we always say, “If you can’t measure it, you can’t manage it.” It’s time to understand the importance of your numbers, figure how to get them in front of you, and then take the time to get a thorough understanding of your financials. Once you start reading them on a regular basis, you can start making decisions based on real data. Decisions made without the data to back it are only guesses.
Winners Know Their Numbers!