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construction company accounting - Complete Controller

Accounting is a significant aspect of administration and management in business. It is essential to have an accounting team accurately track the transfer of assets into and out of an organization that comprises numerous moving parts. This will ensure both profitability and transparency. When it comes to finances, contractors and firms related to the construction industry encounter distinctive challenges. This article will take a look at the challenges and determine what differentiates construction accounting from regular practices to help you manage your finances in a way that suits your business. Check out America's Best Bookkeepers

What is different about construction accounting?

It is necessary to realize that construction accounting is not the same as regular accounting. A usual business, such as a grocery store or restaurant, utilizes the ordinary principles of accounting. They work flawlessly for firms like these as it involves selling from a fixed position. The business recognizes the cost of every item sold, and any expenses/overhead are somewhat constant. However, when it comes to construction, the company is mobile and involves customized work in a different location daily.

For this reason, it is required for construction companies to monitor completely different cost categories: mobilization costs like equipment and packing tools, travel time, material delivery to the job location, and also removing any excess materials from the job site once the work is done. In a way, construction business does not have any fixed location, and it requires moving to wherever needed by the customer, including the materials essential for the job. The Percentage of Completion Method is also utilized by construction businesses, which considers revenue based on the contract’s estimated profit and the completed percentage of the project. Thus, it is even more critical for construction companies to make use of cost-accounting methods that would track expenses accurately to calculate profit and loss precisely. Check out America's Best Bookkeepers

Significant Differences between Construction and Regular Accounting 

  • Sales: Typical accounting involves taking sales into account, and the services and products offered by regular accounting can be classified into one to five categories. Whereas, a wide range of service categories are provided by construction businesses such as consulting, service work, labor, engineering, physical products, design, and materials.
  • Cost of Goods Sold: Regular accounting involves simply recording the cost of the sold product. However, in the construction business, it is not that simple. Every job involves direct and indirect costs that are further divided into various categories.
  • Expenses/Overhead: Expenses and Cost of Goods Sold are distinguishable when it comes to regular business accounting. However, this is not the same when it comes to construction. A lot of items that would be considered “Overhead” when accounting, for instance, a grocery store, maybe categorized as “Cost of Goods Sold,” but when it comes to construction accounting, they may be connected to the client’s project director.
  • Break-Even: It is easier to calculate break-even points in regular business accounting due to the direct relationship between expenses and income. However, when it comes to construction, it can get difficult to determine the break-even on a project as there is a wide range of item categories. Moreover, the majority of the projects are exclusive customized jobs, with specific detailed requirements and a variety of costs associated with them. Check out America's Best Bookkeepers

Accounting for a construction business is significantly more complicated as compared to other regular businesses. It is essential to be able to track, record, and classify costs and expenses in construction business accounting to understand bidding on projects, determine profitable projects for the business, bill clients fairly and accurately, and make most of your firm’s resources.

Improving the accounting of your construction business begins with understanding the various costs you can face on a specific project. After that, it is essential to effectively categorize these costs, taking into account the nuances between the cost of goods sold and expenses.

One of the best ways to make sure the accounting is accurate is by implementing a software solution that enables your employees to effortlessly provide data related to cost from a platform integrated with the software you use for accounting.

This can not only save a significant amount of time but will also ensure that your relevant data never gets lost, which will, in turn, make your business more profitable.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
business Virtualization - Complete Controller

Virtualization is a significant revolution within the information technology field as it helps create virtual division within any computing device and then enable these different divisions to perform separate tasks all at a time. This function is achieved by using different software varieties that work on the internal workings of these devices and then create separate areas within the device, enabling these areas to take on its own set of functions. In this regard, server virtualization plays a vital role in creating virtual divisions within the server, expanding their operability without demanding an increase in hardware devices. The use of this server virtualization is primarily seen in companies and different organizations, which aim to enhance their technological operations without increasing the burden on its budget. Thus, the following are the top 5 ways in which businesses benefit from server virtualization: Check out America's Best Bookkeepers

Maintenance of Hardware Budget

Given the expansive operational fields of organizations, there is a need for these organizations to carry out each function through computational operations, each of which fulfills the different areas of work. However, this may require a vast number of hardware devices to keep these operations from merging and prevent overcrowding. Nevertheless, this may put up an increased financial strain on the organization. A higher number of hardware devices directly means a more significant amount of budgets. In this situation, server virtualization can play an important role that may enable a single hardware device to conduct multiple functions, under the separate virtual servers created within these devices.

The convergence of Focus of IT Staff and Greater Productivity

As the physical servers have fewer numbers, they form multiple virtual servers within a single hardware device. This convergence helps to reduce the burden on IT staff, after which they can converge their attention towards limited hardware devices. As a result, the productivity of IT staff becomes enhanced. They have the means of starting newer business projects instead of directing their focus only on the issues of hardware devices. Check out America's Best Bookkeepers

Cost Saving

The third most important way through which businesses tend to benefit from server virtualization is the cost savings. With a higher number of hardware devices, companies need increased space to accommodate these physical devices. In addition to this, these hardware devices also demand more significant energy use, all the while, implicating an increase in the company’s expenses. In this situation, server virtualization enables companies to cut on their energy consumption, thus helping the company display a socially responsible policy. Moreover, this allows companies to cut on their expenses and use them on other productive aspects.

Easy Portability of Servers

The virtualization of servers allows companies to make their servers portables, which can transfer from one place to another. When companies are required to shift their location, it is a nuisance to move such a significant number of hardware devices and ensure that no harm occurs. In this regard, server virtualization plays a considerable role that helps companies to limit the count of their hardware devices and integrate their maximum servers on a single hardware device. Cloud hosting can incorporate increased benefits from virtualization servers that may enable these companies to enhance their ability to facilitate users’ storage of an increased amount of data.  Check out America's Best Bookkeepers

An Easy Way of Protecting the Company from Data Loss

Companies must protect their data as there are various number of potential threats that may pose harm to the valuable data. Bookkeeping is an essential way of protecting the data. However, a large amount of data demands more efficient protective means. There may be instances when, due to system errors, the data may get corrupted, and the company may face a considerable loss. In these circumstances, server virtualization can help transfer physical devices to virtual servers readily, integrate all of the valuable data in a single hardware device, and ensure increased protection of data from any form of threat.  

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

Many companies sell car insurance. When you need the best coverage for the money, then you need to research the available companies. Insurance policies give you protection for your vehicle. This coverage allows you to have peace of mind that you are safe from financial losses. The car insurance companies give you the best customer service, updated websites that enable you to check your policies or pay your bills.

There are many car insurance corporations that give you the best policies at a reasonable price.

PROGRESSIVE INSURANCE COMPANY Check out America's Best Bookkeepers

The Progressive insurance company is a very well known insurance company with thousands of customers with great reviews. A recent study by J.D. Power found that when it comes to insurance company pricing, Progressive is one of the least expensive. 

They provide you a multi-car discount, pay in full discount, and multi-policy discounts. Progressive is at the top of the list that gives you the policy you like.

Now the best thing about Progressive, they have 18 million drivers insured today in America. 1 of 10 drivers wants to choose progressive over others.

QUOTEWIZARD INSURANCE COMPANY

Car insurance is about not comparing the rates. When you are shopping for insurance, one mistake that consumers make is not shopping multiple companies before purchasing. That is why we suggest you visit the quotewizard.com for the queries.

QuoteWizard is one of the largest independent insurance company in the U.S.

They give quotes. They are making it a straightforward policy to search auto insurance strategies when you decide to use QuoteWizard. You provide some simple information, and QuoteWizard will provide you with several insurance company quotes.

In conclusion, they will request for info like name, address, and email. They are also giving you the information for the proper workers in your area.

STATE FARM INSURANCE COMPANY

State farm insurance started in 1922; the company has a past of customer satisfaction and financial stability. State Farm gives you individual services with offices or agents spread all over the country. The company’s major offers are, they have several discounts they offer, brick and mortal agents and stores, and a great mobile app. Check out America's Best Bookkeepers

Pros of State Farm:

Limited agent and offices give in-person need

Inordinate mobile website and app

Sufficient discounts are available

 

ESURANCE COMPANY OF INSURANCE

 

The primary rewards of purchasing auto insurance with Esurance (owned by Allstate) is having the flexibility and control to manage your policy. Esurance is convenient and allows for customization of your coverage.

Pros of Esurance:

Easy and quick contact to auto insurance

Many options of customization

LIBERTY MUTUAL INSURANCE COMPANY Check out America's Best Bookkeepers

Liberty mutual insurance is one company that provides coverage to more than 1.5 million automobiles; they are considered the top of the most customer service rating.

Liberty Mutual was graded “better than most,” in J.D. Power’s 2018 Insurance Shopping Survey.

Pros of Liberty Mutual

Services provided 24 hours a day

Standard coverage is excellent and includes accident forgiveness, replacement of the new car, and deductible funds.

Cons of Liberty Mutual

If you are purchasing a single policy, it can be expensive.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Trucking and Logistics Companies - Complete Controller

In the current globalized business environment, logistics plays a vital role in trade facilitating and has become a key element in business operations’ success. However, due to volatile customer demands and complex business models, it is tough to streamline logistics management.

According to a logistics study conducted in Capgemini, cutting transportation costs tops the list of the most challenging issues faced by logistics companies. Some other historical points make the list, but perhaps the biggest concern is the need for more significant technology advancements and innovation without exceeding the budget. Check out America's Best Bookkeepers

Top 6 Challenges Facing Trucking and Logistics Companies

Fuel Costs

Unsurprisingly, fuel costs pose a significant challenge to logistics companies. The industry is unable to keep up due to the recent rise in fuel costs, especially diesel. These high fuel prices are likely to affect transportation costs in the U.S. in the form of increased fuel surcharges.

After ranking 1st in 2005, 2nd in 2006, and 3rd in 2007, fuel once again attained the top ranking. Though motor carriers in 2008 aggressively sought to recoup fuel cost increases with fuel surcharges, the industry could not keep pace with the unprecedented rise in diesel fuel costs.

Economy

Along with the revolutionary increase in fuel prices, other issues such as the credit crisis and rising inflation are harming the U.S. economy.

This crisis has resulted in increased regulations, stringent compliance laws, decreases in demand, and, most importantly, the increase in marginal and fixed costs, further reducing the logistics industry’s profitability. Check out America's Best Bookkeepers

Improved Customer Service

Gone are the days when people used to wait weeks for their shipment without making any inquiries. Customers now want real-time transparency on their delivery, such as the exact location of the shipment.

Courtesy of the advanced technology available, the location of shipments is as linked as social networks. Therefore, trucking and logistics companies must also bear the expense to facilitate these online services, which can be very expensive and time-consuming, especially for small and mid-sized companies.

In addition to that, surveys show that most customers are not interested in paying for services like express delivery, further hampering profitability.

Environmental Issues

The majority of average corporate CO2 emissions occur in the supply chain, which has increased the requirement for more transparent and accountable practices from logistics companies. Furthermore, anti-idling laws and other environmental-related initiatives taken by the local and state government poses the threat that compliance will exceed their benefits.

Onboard Truck Technology

The rapid advancement in technology, as we previously discussed, has created many challenges for trucking and logistics companies to stay up-to-date with upcoming promotions. Though these latest technologies seem attractive, their implementation can be quite challenging.

Additionally, the costs related to the ELD (Electronic Logging Device) Mandate is also a significant cause of concern for the industry. It is not clear how productivity will be affected by ELD’s deployment and how the collected data will be used. Check out America's Best Bookkeepers

Driver Shortage

Until trucking companies implement tesla’s automated truck, the requirement of quality truck drivers remains a perennial top issue of the logistics industry.

The recent optimistic prediction of the trucking industry shows that truck drivers’ demand is going to surpass the supply by around 50,000 drivers. This figure can rise to 175,000 in the next five to seven years.

Conclusion

These are only some of the challenges faced by trucking and logistics companies. Issues like driver retention, HOS (Hour of Service) regulations, and growing scarcity of truck parking further increase problems faced by the already competitive and rapidly changing industry.

In light of these issues, cutting a few corners will not help much for logistics companies. They will need to adopt a strategic approach to eliminate the bottlenecks and improve their business processes, which will consequently reduce transportation costs. They may outsource their essential functions (like bookkeeping, payroll, etc.) to focus more on strategic decisions.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers