Why Contractors Love Our Services?
Contractors’ Challenges
1. Job Costing and Cost Allocation
Challenge: Accurately tracking and allocating costs to specific jobs (labor, materials, equipment, subcontractors).
Why it matters: Misallocating costs can lead to underbidding or unprofitable jobs. Proper Job Costing is essential for determining project profitability and managing cost overruns.
Complication: Costs can be indirect, shared across projects, or delayed in billing.
Proposed Solution:
- Implement a construction-specific accounting system (e.g., Sage 100 Contractor, Viewpoint, QuickBooks Contractor).
- Use job codes and cost codes to track expenses by labor, materials, subs, and overhead per project.
- Train field staff to enter data in real time via mobile apps or field management tools.
2. Revenue Recognition
Challenge: Determining when and how to recognize revenue, particularly for long-term contracts.
Why it matters: Impacts financial statements and tax liabilities. Affects cash flow forecasting and performance measurement.
Complication: Requires precise tracking of project completion, estimated total costs, and billings to date. Inaccuracies can lead to misstated revenue or IRS penalties.
Proposed Solution:
- Implement a construction-specific accounting system (e.g., Sage 100 Contractor, Viewpoint, QuickBooks Contractor).
- Use job codes and cost codes to track expenses by labor, materials, subs, and overhead per project.
- Train field staff to enter data in real time via mobile apps or field management tools.
3. Change Orders and Scope Creep
Challenge: Change orders alter project scope, cost, and revenue. Inaccurate or late cost tracking prevents early detection of cost overruns.
Why it matters: Without real-time data, contractors may miss the opportunity to renegotiate or recover costs.
Complication: If not properly documented and approved, they may not be billable. This leads to disputes or absorbing unplanned costs, hurting margins.
Proposed Solution:
- Implement a construction-specific accounting system (e.g., Sage 100 Contractor, Viewpoint, QuickBooks Contractor).
- Use job codes and cost codes to track expenses by labor, materials, subs, and overhead per project.
- Train field staff to enter data in real time via mobile apps or field management tools.
4. Cash Flow Management
Challenge: Contractors often get paid in phases or after milestones, leading to cash gaps.
Why it matters: They still need to pay for materials, labor, and overhead upfront.
Complication: Juggling bills, payroll, and vendor payments without steady income.
Proposed Solution:
- Implement a construction-specific accounting system (e.g., Sage 100 Contractor, Viewpoint, QuickBooks Contractor).
- Use job codes and cost codes to track expenses by labor, materials, subs, and overhead per project.
- Train field staff to enter data in real time via mobile apps or field management tools.
5. Overhead Allocation
Challenge:
Why it matters:
Complication:
Proposed Solution:
- Implement a construction-specific accounting system (e.g., Sage 100 Contractor, Viewpoint, QuickBooks Contractor).
- Use job codes and cost codes to track expenses by labor, materials, subs, and overhead per project.
- Train field staff to enter data in real time via mobile apps or field management tools.
6. Multi-State Tax Compliance
Challenge: Contractors may miss out on deductions or fail to plan for quarterly taxes.
Why it matters: Tax bills can be surprisingly large and hard to pay.
Complication: IRS penalties, overpaying or underpaying taxes.
Proposed Solution:
- Implement a construction-specific accounting system (e.g., Sage 100 Contractor, Viewpoint, QuickBooks Contractor).
- Use job codes and cost codes to track expenses by labor, materials, subs, and overhead per project.
- Train field staff to enter data in real time via mobile apps or field management tools.
7. Certified Payroll and Davis-Bacon Act Compliance
Challenge: Contractors often operate in multiple states, with different tax and labor laws, prevailing wage rules (e.g., Davis-Bacon Act), and union agreements. Managing union wages, prevailing wages, multi-state taxes, and certified payroll reports.
Why it matters: Noncompliance can lead to fines or disqualification from government jobs.
Complication: Tracking time by job and submitting certified payroll reports adds administrative burden.
Proposed Solution:
- Implement a construction-specific accounting system (e.g., Sage 100 Contractor, Viewpoint, QuickBooks Contractor).
- Use job codes and cost codes to track expenses by labor, materials, subs, and overhead per project.
- Train field staff to enter data in real time via mobile apps or field management tools.
8. Equipment and Depreciation Tracking
Challenge: Accurately tracking and allocating costs to specific jobs (labor, materials, equipment, subcontractors).
Why it matters: Essential for determining project profitability and managing cost overruns.
Complication: Costs can be indirect, shared across projects, or delayed in billing.
Proposed Solution:
- Implement a construction-specific accounting system (e.g., Sage 100 Contractor, Viewpoint, QuickBooks Contractor).
- Use job codes and cost codes to track expenses by labor, materials, subs, and overhead per project.
- Train field staff to enter data in real time via mobile apps or field management tools.
9. Contract Retainage
Challenge: Clients withhold a percentage of payment until the end of a project.
Why it matters: Mismanaged retainage affects cash flow and revenue recognition.
Complication: Confusion on what’s earned vs. what’s actually received.
Proposed Solution:
- Implement a construction-specific accounting system (e.g., Sage 100 Contractor, Viewpoint, QuickBooks Contractor).
- Use job codes and cost codes to track expenses by labor, materials, subs, and overhead per project.
- Train field staff to enter data in real time via mobile apps or field management tools.
10. Bonding and Financial Statement Requirements
Challenge: Accurately tracking and allocating costs to specific jobs (labor, materials, equipment, subcontractors).
Why it matters: Essential for determining project profitability and managing cost overruns.
Complication: Costs can be indirect, shared across projects, or delayed in billing.
Proposed Solution:
- Implement a construction-specific accounting system (e.g., Sage 100 Contractor, Viewpoint, QuickBooks Contractor).
- Use job codes and cost codes to track expenses by labor, materials, subs, and overhead per project.
- Train field staff to enter data in real time via mobile apps or field management tools.