For our podcast, our fun guest is going to help you make more money and show you how money is made in the back office . We have Randal De Hart, with Fast and Easy Accounting. He’s the co-founder of the Business Consulting and Accounting Agency, and a specialized in providing back office services for construction companys. They provide book keeping services, invoicing, payment applications, preparation payroll processing, prevailing wage, monthly realtor, tax reports for construction companies. They’re located in Washington State but they handle companies all over the states. One of their mottos is: “WE REMOVE YOUR CONTRUCTOR PAPERWORK FRUSTRATIONS.”
Way back ‘92,’93 its very obvious that there’s a huge difference between construction accounting and regular accounting. All accounting uses the same equation which is the 3 O’S.
- The first O is the assets, as a constructor, what do you OWN?
- The second O is the liability. What do you OWE?
- The third O is Equity. What’s left OVER?
Any constructor would understand this.
Regular Accounting: roughly 80% of all accounting for business the world and is concerned with the basic financial reports which are used for preparing annual tax returns and some rudimentary management decisions:
- Sales– income
- Cost of GoodsSold – resell of the sales; 4 lines; LMOS
- Gross Profit Margin – sales minus cost of goods sold gives us gross profit margin.
- Expenses– Overhead required to maintain business operations; gross profit minus expenses gives us Net Profit.
Construction Accounting Is Roughly 15% Of All Accounting and Accounting with manufacturing making up roughly 5%. So, it is given very little attention in schools, colleges and universities.
- Labor – what you buy to pay for your employees; taxes and overhead;
- Other – permits; cellphones, fuels and gas;
Every business owner needs 3 basic report:
- CASH = Cash on hand
- PROFIT = Profit and Loss Report
- EQUITY = Balance Sheet Report; explanation as to why profit is high; explains real money structure
Accounting is history. Forecasting in economics is all future. In construction accounting you pull up all the report in our Quickbooks files; this explains that 80% of your profit comes from the 20% of your customer. If you pull up Job Profitability Report, the top 20% typically don’t complain a lot. Then going to a little bit of demographic and start taking a list which we call the persona of who is that person. Once the constructor already has that picture, he now has to go to the marketing, and markets through that persona. Going through this strategy, he was able to level up his income. The good personality you have and the setup you will have makes a good set up.
You may check out this contact information to get to know more details about Randal De Hart:
http://www.fasteasyaccounting.com/caa – visit this website for the academy
http://www.fasteasyaccounting.com/podcastbonus visit this website for free bonus and KPI review
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