Counting the Cost in Construction Accounting

Counting the cost in construction accounting.

Counting the Cost in Construction Accounting

Counting the Cost in Flood Waters

There is an interesting law here in Arizona which is known by the name, “Stupid Motorist Law.” It says something to the effect of “any motorist who becomes stranded after driving around barricades to enter a flooded stretch of roadway may be charged for the cost of their rescue.” Apparently, the law can be found in Arizona Revised Statutes section 28-910. Also, just as apparently, the law isn’t regularly enforced.

So, for those of us who don’t drive around barricades when the summer rains create raging rivers where before there were only dry creek beds (or simply dips in the road) it doesn’t mean much one way or the other. For those who do, it only means they won’t be charged by the state for their stupidity. Yet, they will still likely be “taxed” because of their poor decision.

  • Towing
  • Repair
  • Beyond repair
  • Missed time at work
  • Lost opportunities

And, don’t forget all that schplainen’ they’ll have to do with rescue workers. Not to mention spouses, parents, children, friends, insurance companies, and so on.

Counting the Cost in Words

Yet, being wise to the way of words, I would replace “stupid” with the word, “ignorant.” Here’s why – being stupid means you don’t have the brain cells to get the job done. Being ignorant means you haven’t as yet learned.

See the difference?

This article will help you understand it better if you’re ignorant of how the two are different.

Counting the Cost of Ignorance

And, just like the wayward, water plunging drivers there are some who are guilty of breaking the “Accounting Ignorance Law.”

And, what that looks like is, they don’t yet understand how they can be aided in growing their construction contracting business through correct use of their financials – and it is going to cost them.

Here is the deal. Average Joe Contractor isn’t the competition they need to be concerned about. It is the up and moving commercial construction contractor who has gotten savvier and more sophisticated. It also means the General Contractors (who are also more savvy) expect their subs to bring a better level of efficiency and expertise not only in the field, but also in the office.

This has led to higher expectations which makes the cost of not knowing what you’re doing with the financials much higher these days.

And its not just the competition or the GCs.

Counting the Cost in Construction Accounting

It’s the complexity of software, SaaS, apps, construction bookkeeping nuances, and so on.

One of the huge benefits of QuickBooks and integrated apps is how much information you can obtain from having all the correct input in all the correct places. Its job costing, bidding, accounts receivable management (with or without AIA style billings,) estimating, invoicing, timesheet data, reconciliation of balance sheets, WIP reports and supporting documentation, making appropriate bill payments, certificate of insurance management, project close-out documents management, and on and on.

What that leaves us with is that understanding (and using) all the great benefits you can get from QuickBooks and the supporting apps is more complex these days, and even more so now that you’re ready to Run With the Big Dogs.

So, my advice?

Don’t drive around the barricades!

And don’t leave your construction business accounting needs to wishful thinking or chance. It will cost you.

You can get in touch with us here or give us a call Toll Free: 866-629-7735.

Hubdoc Explained for Subcontractors

Hubdoc saves time and makes your accounting more efficient.

Hubdoc pulls your bank statements, recurring bills, and uploaded receipts into one hub. Yet, that is just the beginning. Using Hubdoc means you can reduce the need for manual data entry and paper filing. Time to get rid of that ugly file cabinet? Your “stuff” is stored in the cloud. And, this is a biggy – you can get to what you need in one place. That means you no longer need to log into multiple sites to retrieve the information you’re after.

Hubdoc is set up by us, for you

We set up the Hubdoc account and then work with you to get all of your documents flowing into it auto-magically!

What we ask of you is:

  1. Set up view only user access to your bank accounts

 

  1. Make an accounting email address on your email domain

 

  1. Create your User ID and Password through the link we send you

What we do on our end

After we’ve gotten the initial stages set up, we configure your Hubdoc account to sync with your QuickBooks system. This allows you to publish your bills and receipts right from Hubdoc into QuickBooks.*

3 ways to get your docs into Hubdoc

  1. The phone app allows you to use your phone’s camera as the means of entry

 

  1. From the web-based app you can drag and drop the documents where they belong

 

  1. With the custom email you’re provided you can email them into the system

The magic behind the system

The magic is called Optical Character Recognition (OCR.) It “reads” receipts and creates transactions that will export to QuickBooks where a match is created in the bank feeds.

Optical Character Recognition is a technology that enables you to convert different types of documents, such as scanned paper documents, PDF files, or images captured by a digital camera into editable and searchable data.

If you’re interested in the technology behind the magic, this article from lifewire is enlightening. From the article: “OCR, also referred to as text recognition, is software technology that transforms characters such as numbers, letters, and punctuation (also called glyphs) from printed or written documents into an electronic form more easily recognized and read by computers and other software programs.”

What we like best about Hubdoc

Hubdoc saves you time and all the while it is building a digital archive of your business documents.

Yeah, but what about security?

Take a moment to look at the layers of security provided by Hubdoc.  They even offer a guide to the user concerning practices which will help you protect your Hubdoc account from your end.

*Publishing to QuickBooks is a feature available only to QuickBooks Online users. But don’t despair we have solutions for you QuickBooks desktop users also.

Your call to action

Tell us today you want to take your place on our waiting list. Call us 480-442-4032 or Toll Free at 866-629-7735. Or use the form found here.

The Best Supporting Tech Nominee Is . . .

tech as supporting app for accounting software

Hubdoc! 

Whether or not you faithfully watch the annual Hollywood extravaganza known as the Academy Awards, you know there is a competitive division known as “Best Supporting Actor.” Much like the movie world, the real-life accounting world has tech. Tech which supports the big-name players. Those in the supporting rolls make the movie (or the accounting) so much better.

Let’s break this down

The best tools you own don’t perform well if they’re used with the wrong attachments. For example, your top-of-the line drill is no good if the wrong bit is inserted. Put the wrong blade in your table saw and there will be trouble. If using the correct accessories is important in the shop or on the jobsite, using the correct accessories in your office tech stack is just as important. By choosing the correct accessories for your subcontractor office and accounting needs, you begin to develop your tech stack.

What is a tech stack?

Consider the Apple or Google app stores that provide add-on apps for smart phones. The basic tool is your phone. The tech stack you create through adding the apps gives you a well-rounded and useful tool. A tool for getting many things done outside of simply making phone calls. In the same manner, you can drop in at the QuickBooks app store and find a plethora of “accessories” to add to your accounting software.

Which brings us back to Hubdoc

If you took time to peek at the offerings for apps on the QuickBooks page you likely noticed Hubdoc among the mix. And, the simple explanation of what Hubdoc does is listed on that page as, “Your key financial docs in one place automatically.” What they say is true, yet it is best not to skim over that brief sentence and move on. If I could give you a drum-roll right here I would. This is really rather astounding when you think about it.

How much time do you, your office staff, and your project managers waste scrambling to find minor as well as major pieces of your accounting information? How many people or desks do you disturb, how many places do you search in your digital or physical spaces to gather up all the info you need for your bookkeeper?

Wouldn’t you welcome a better way to collect, store, and organize your documents? Put simply, Hubdoc can save you valuable time and help you increase efficiency.

Next week I’ll dive deeper into Hubdoc. It is a fantastic accessory which aids your ability to organize and systemize your construction office. Oh yeah, by the way, here are some of the things our clients have said to us about Hubdoc:

“Oh man, this is going to make my job so much easier.”

“That’s it? Wow, this way is so much better than what we’ve been doing.”

“I didn’t know how much better this would be until you showed me.”

Your call to action

Give Schulte and Schulte a call today so you can take your spot on our waiting list.  480-442-4032 or connect with us here.

The Nuts and Bolts of Organizing Your Truck, Van, or Supply Trailer

 

Construction Contractor, have you found your tools are always yelling at you because the wife and kids take up way too much room?

Well, here are some ways you can get them to calm down – the tools, not the wife and kids.

Standardize the Process

It doesn’t matter if you have a single pickup or a fleet of vehicles ranging from box trucks to vans to tool trailers, having organized tool and supply transportation is the key to hitting the jobsite ready to roll. Plus, consider this — your vehicles are visible and often the primary point of customer contact for your company.

The simple yet effective tool when deciding how to organize your vehicle space is to Standardize the Process. You’ve heard it before – a place for everything and everything in its place. Yet, this goes beyond just knowing what is in your own truck. When you begin standardizing the process you’ve begun preparing for scaling into a large fleet.

Pay attention to the details

You’ve probably already encountered these objectives for stowing all the necessary items to be hauled to each jobsite:

  • Store larger items on the floor or lower compartments.
  • Create vertical shelving and storage spaces (including doors when possible) using all available territory.
  • In trailers and box trucks include overhead storage cubbies, rods, or rails.

Here are other procedures to consider:

  • Use smaller containers for each work phase or tool type instead of one large universal box. The bigger the box the deeper whatever tool you need will be buried.
  • Set up storage zones based on types of tasks to be completed.
  • Include a field service kit which goes to the jobsite with the equipment. It should contain the parts and tools necessary to repair items most likely to fail in the field (for example, the rope pull on a gas saw.) The bonus point is, this eliminates most field emergencies that would require a trip to the shop for minor repairs.
  • Consider choosing a battery-operated lantern with a handle which will allow you to hang it while searching in the dark recesses of your trailer, van, or box truck.

 Digging deeper

Whether digital or paper based these are documents which you’ll want to consider having always available in your vehicles:

  • Daily load sheets for each vehicle
  • Project Startup Check List
  • Job Close Out List
  • Business cards
  • Client Satisfaction Survey
  • Informational Brochures

A serious focus on efficiency leads to better professionalism

Do you ever get to the job site and find you’re hit with a bunch of surprises?

  • Oops, that is going to take more __________ than I thought it would.
  • What do you mean there is no power source?
  • Dagnab it, I’m going to have to clean up this _________­­­ before I can use it.
  • Interesting, they moved all the ___________ since I was here yesterday.
  • I’m not getting even one bar on my phone.
  • Umm, I didn’t know ___________ was going to be here today too.
  • The weather man said it was going to be sunny today – what happened?

You know it is part and parcel with the construction contracting industry, there are going to be things which come up and you have little to no control over them. Think about this, every other contractor on your site or the one down the street is facing the same kind of issues. You can be way ahead of the game by having every single unit in your fleet stocked, organized, and prepared for the day’s adventure.

And, when you’re faced with the last item on the above list, (why is it raining today?) put the time to good use by reorganizing the contents of your work vehicle.

*****

This is another article in the series concerning organizing your construction contracting office, shop, vehicle, and day. Want to see more? Go right here.

The Tickler File, an Age-Old Tool for the Modern Construction Contractors Office

We’ve found most people fit in one of three categories when it comes to understanding and using a tickler file.

In which category do you fit?

  1. I’ve never even heard of a tickler file.
  2. I tried it and it didn’t work.
  3. I use and love my tickler system.

If you’re in the number one slot, hang on I’ll explain not only what it is, but how to use it.

If you’re in the number two space, please give me a chance to show you some new ideas, techniques, and approaches which might just move you into the number three category.

And, if you’re in the third spot, yay! You already know how this simple tool makes running your construction contracting office so much easier. Plus, there may be a few ways to use your tickler file you hadn’t thought of before.

So, what is a tickler file?

You may have also heard this file described as a pending system, a bring-up file, or a holding box. It doesn’t matter what you call it, the point is it’s a great tool for keeping your brain as well as your office organized.

The best way I can describe it is, “The tickler file is a system meant to tickle your memory, it’s a fantastic way to help you keep track of details you don’t want to have roaming around in your head, hiding out in virtual space, or lying around on your desk.”

We’ll start with the physical aspect of a tickler file, then move on to the latest concept of an integrated system (which includes your computer or other digital device) for tickling your memory.

While the tickler file has been around for a long time, David Allen a productivity consultant, re-popularized the idea with his bestselling book Getting Things Done.

In his system there are 31 file folders labeled 1 through 31, followed by 12 folders labeled with each month of the year. These folders are then placed in an easy to reach spot. For example, you could choose to use a desk file drawer or a desktop file box.

The file number which should be in the front of the file each day is the one corresponding to today’s date. After you’ve emptied today’s file, you move that number to the back of that section. The month which should be in the first slot of the 12 months is the month following the one you’re presently in. When you move “next month’s” files into the appropriate daily files, you also move that month’s folder to the back of the month section.

What goes in the files?

Documents you’ll need again soon, follow up notes, coupons, reminders to call back, bills to be paid, status reports, evaluations, tax related items, requests for feedback, event tickets, flyers with directions or instructions, warranty expirations, forms to be filled out, — really, simply any item or piece of paper which needs to be reviewed or acted upon can all go into the proper day of the month or left holding within future months.

Here is the rule-of-thumb I use when deciding which pieces of paper find a temporary home in my tickler file – if I’m not filing it or tossing it, it is a good candidate for my tickler file. Let’s face it, a tickler file truly is more effective and useful than looking all over bulletin boards, magnet boards, taped or tacked on walls, or a stack on your desk in order to find the paper you want. Plus, with a tickler file the risk of completely forgetting something beneath the stack is eliminated.

A real-life example of something that is hanging out in my tickler file right now is a flyer I received from Fry’s Super Market. It states that on the dates February 17th through 19th every VIP customer (meaning if you have a Fry’s card) will be able to save twenty cents per gallon of gas at the new Fry’s location in our neighborhood. Chances are great that on one of those dates I’ll need to purchase gas. If I don’t take advantage of the offer on the first date, I’ll move it to the next day, then the next. If, for some crazy reason, I haven’t used it by the end of the offer that piece of paper will find its way to file 13.

What comes out of the files?

Nothing. Well that is, nothing comes out of the tickler file if you don’t use it. Yet, if you get into the habit of faithfully using your system everything comes out at some point. It will either be acted upon or filed when the time is right. Which reminds me, only put in stuff that is really better done at a future date.

Also, in the past I would have advised sticking to the desktop box storage system because of the “out of sight, out of mind” concept. But now-a-days, there are ways to get around that problem and I will tell you about it a little further down. For now, I’ll introduce you to another way to build your physical tickler file.

Shrinking the tickler file

One reason the tickler file was so popular in the past is paper was a major problem in all offices. These days – not so much. Yet, there are still paper items which we all must deal with and that is where a shrunken version of a tickler file comes in quite handy.

The major concepts concerning the use of the full-blown version and the shrunken version are about the same. The difference is felt mostly in the space and time devoted to housing and using the tickler file.

Let me introduce the shrunken version I developed and use specifically for two reasons, 1) my office space is very small, and 2) I don’t have a large number of paper items to deal with.

I use only 8 folders and they’re labeled like this:

  • Monday
  • Tuesday
  • Wednesday
  • Thursday
  • Friday
  • Next Week
  • Next Month
  • Later

Just like the full-blown version, upcoming action items are placed in the appropriate day of the week, or one of the other noted files. At the end of the week, I check the “next week” folder and slot items from it into the daily files. I also place the “next month” folder into the midst of the daily files when “next month” takes place in the middle of a week. If there are items in the next month file which are to be used in week three or week four of the month I place them in the “next week” file and slot them in during the weekly review. Also, always check the “later” file at the end of the month. You may need to bring some items forward.

Did you say electronic tickler file?

Why yes, there is a way to have an electronic tickler file. Just be aware, like the (almost) paperless office the electronic system is (almost) paperless.

Matt Perman, on his site, What’s Best Next posted an article titled A Few Quick Examples on How to Make Your Tickler File Electronic. Check it out. It may be all you need.

Use it or lose it

Setting up the system takes minutes. Using the system also takes only minutes a day. BUT, getting into the habit of using a tickler file system is the hardest part. I know, I’ve tried on more than one occasion. In reality, the hardest part about using a tickler file is actually starting to use it.

Remember I mentioned I would tell you about the ways to remember to use your tickler file? One way to solve the problem is to place a “trigger” in your space. For example, you walk into your office, put away your personal belongings, and right there in the spot where you’re putting your purse or your lunch there is a note that says, “Check the tickler file.” Yep, make it the first thing you do each morning and that soon becomes a habit.

Another way to remind yourself is to put a repeating task on your digital calendar. You open your calendar and there the notice is – Check Tickler File. Your next step is to reach for your tickler file.

I read where some folks sent themselves an email with a reminder to check the tickler file. Find the way that works best for you and use it.

Wait, there’s more

Lest I sound like the annoying salesman on TV, I do want to let you know there are also some added benefits of using a tickler file you may not have thought of. One fellow shared that when he tried (again) to get his tickler file system going he purposely added some things just to get in the habit. He enjoyed music and was trying to learn some new songs. So, he added the lyrics to songs on a few days, reviewed the songs, then refiled them in upcoming days so he could review again. He said it wasn’t long before he was in the habit and no longer needed to “seed” the tickler file.

Studying for a new license, need to learn about a piece of software, want to understand an app better? Drop a note in your tickler file reminding yourself to take 15 minutes to study. Put the note back in tomorrow’s date or a few days down the road. In just a few days, you’ve put in an hour or more towards learning what you need to know.

Want to tackle an “extra project” (like organizing the office) but don’t have time? Drop notes in your tickler file in which the project is broken down into nibble size pieces. They might look like this, “clean top right drawer,” “straighten files A through C,” “rearrange top shelf in storage closet.” You get the idea.

Choosing the right tickler file system

Now that you know about all the benefits you receive from using a tickler file it is time to decide which works best in your office. (By the way, any of these systems will work well at home too. Think about getting all the junk off your kitchen counter and you’ll know what I mean.)

The easiest way to decide which system is best for your office is to determine how much paper you must deal with on a daily or regular basis.

  • Lots of paper – Go with the 43 files, you might like this ready-made unit.
  • A little bit of paper – try my system
  • Hardly any paper – make use of the electronic file

Adding a tickler file in your office is an excellent way to use an age-old tool in managing your modern construction contracting business.

This is the first in a series of articles concerning pieces of the organizing puzzle for your construction contracting business. You can go here to find out more about what has or will be showing up in the collection.