Tradies! We know you didn’t enter the construction game to run numbers. You’re in it to build things, deliver successful projects and grow your business. Stressing about bookkeeping, payroll and accounting? Nah, that’s where we come in. We understand the unique challenges faced by construction and trade businesses (and we love running numbers, too).
BlueRock provides a range of construction bookkeeping services to help tradies and construction businesses of all sizes run a profitable shop without the financial headaches. From simple fixed-fee subscriptions that allow you to outsource your books and payroll, to tailored advice from our expert construction business consultants , we’re ready to get on the (finance) tools.
To help you better understand construction bookkeeping practices, we’ve written a quick guide to bookkeeping for tradies, including some real life tips from a BlueRock client who runs his own business.
Here’s Why Bookkeeping for Construction Companies is Different
Bookkeeping for construction businesses is complex because self-employed tradies and construction companies work on a project basis, and no two projects are the same. This means you need a reliable system to track every project, manage lumpy income and bills, and ensure everyone gets paid correctly and on time.
Unlike businesses that operate from a single location, or sell just one product or service, construction companies face regular curve balls that demand robust bookkeeping practices. There’s the large expense of materials and inventory, plus complex payroll considerations, lumpy interim payments, and variable job costing. And the importance of maintaining good client relationships means that accounts payable need to be managed very carefully.
It’s important that your books are up to date so you can have confidence in the numbers and make better decisions, with a firmer understanding of business performance. And let’s face it…to sleep better at night.
How BlueRock Helped Mood Workshop Nail The Books
We caught up with Craig Shanahan, owner of the architectural joinery and furniture making business Mood Workshop , to chat about his experience as a BlueRock client.
Q. Why did you engage BlueRock to help with your bookkeeping?
“As my business really started to grow, we wanted to level up from the work we were doing with our internal bookkeeper. We needed expert bookkeepers who could provide a reliable and efficient service, to give me some time back to focus on clients and projects. And I wanted someone who could work holistically with my BlueRock accountant, so it made perfect sense.”
Q. What’s the most valuable thing BlueRock has done for your business?
"Having my books reconciled like clockwork means I can generate accurate real-time reports, and I can forecast with clarity and confidence."
Q. In what ways does BR understand your industry/business type?
“The BlueRock team just seems to get what it’s like to run a trades business. They understand the complexity of running credit accounts and managing subcontractor payments. And getting me set up on Float software has helped me with cash flow reporting when I’m dealing with large volumes of materials and lumpy project income.”
Top Bookkeeping Tips for Construction Businesses
We’ve talked about the key concepts of bookkeeping for construction businesses and tradies. Now we’ll explain a few ways to improve your financial tracking practices.
Track Invoices and Payments When They Are Received
This is essential if you want to achieve sustained success with your construction business. Failing to keep up with your invoices and bank reconciliations is one of the fastest ways to eat into your profitability and stunt the growth of your business. It can result in overdue debts being overlooked or payments being missed, which could lead you to spending money you don’t have, wasting money on late payment fees and damaging your reputation in the industry.
Use Job Costing to Manage Project Costs
Job costing is an accounting practice that makes it easier to manage project expenses. It involves calculating individual project costs like overheads, labour, and materials. It’s a great tool to track the specific costs of an individual job, providing data you can analyse to find ways to reduce your expenses on future projects.
When you’re taking on a long-term project, job costing can also help you to identify potential cost overruns, giving you time to make adjustments to reduce costs or inform the client of a price increase.
Use Multiple Bank Accounts
Running your entire business and multiple projects from a single bank account could be a huge mistake. It’s best practice for construction companies to use multiple bank accounts to allow for more accurate revenue and expense tracking for each project. Managing each job from a separate account can avoid common bookkeeping and billing errors. Just imagine trying to figure out which project all those payments to the same timber supplier are for, if you use the same vendor across multiple jobs.
Get Construction Bookkeeping Services From BlueRock
The construction game isn’t easy and neither is managing a business's finances. If you struggle with it, consider getting some help from an expert in construction bookkeeping services. By outsourcing your books, you’ll have more time to focus on what you do best, while saving you money, and a lot of headaches, down the track.
Get Bookkeeping Services Built for Busy Business Owners
By partnering with a professional team of bookkeepers, you'll get all the benefits we've covered off already, plus access to valuable financial expertise and insights that can help you grow your construction business! Complete the form below to connect with our construction bookkeeping experts.
