Running a small construction business is far more complex than just being a good craftsman. Being the boss means paperwork. Contracts, permits, insurance and licenses are all part of the job. Another huge factor to consider when opening a construction business is accounting. Hiring a Certified Public Accountant will take a lot of the pressure off you and allow you to focus your energies elsewhere. If you choose to do your own accounting, you will need to know what exactly is involved in that process.
Record the cost of materials onto a spreadsheet on your computer. Break down the cost of the materials by supplier. Keep track of the total monthly cost of the materials your business uses.
Record the cost of labor paid out on the spreadsheet. Break this cost down by employee while tracking the running total for the month. Remember that this list will later involve payroll taxes that must be paid to the proper authorities, so keep only hourly and salaried employee pay here. Pay laborers by the week, the job or the month depending on their agreement with your company. Provide the employees with proper check stubs weekly and required tax information at the end of the year.
Track the cost of subcontractors on your spreadsheet. Break down this cost by each subcontractor and track the monthly total. Pay your subcontractors according to their individual agreements with you. Submit the proper paperwork to the tax authorities concerning these funds and supply each subcontractor with a summary of this information as required by tax law.
Record the cost of any rental equipment you use each month, by supplier, on your spreadsheet. Be sure to include the type of equipment, serial number, cost per day and total cost of each rental as well as any other pertinent information.
Track delivery and hauling costs that you pay each month. Break these costs down by job on your spreadsheet.
Keep a record of fuel costs on your spreadsheet. Record these costs according to the automobile or piece of equipment that used the fuel on each purchase.
Track miscellaneous costs onto your spreadsheet. Include taxes, one time expenditures, licenses, permits, and any other cost that you had to pay out during the course of running your business.
Record job specs onto your spreadsheet. Break this column down into individual costs, deducting any money paid by the client. Print and send each client an invoice with all of the information concerning their project each week, month or at the completion of the job, depending on their contract with your company.
Track all of the money being paid out versus all of the money coming into your business. Track this information by the day, week, quarter and year. Keep this and all of your other records current by doing your accounting daily.
Use information from your contracts to keep your records straight. Question any discrepancies.
Double check , then triple check, all of your figures.
Write all checks and record this information immediately to your spreadsheet.
Print out a hard copy of all of your records periodically and store this paperwork in a safe place.
Store all of your hard copy records for 10 years and electronic information for two years.