Bench offers full-service bookkeeping services for small business—with all of their plans including both a dedicated bookkeeping team and an easy-to-use software system. Improving your process starts with understanding how construction accounting is unique, and determining the different types of job costs you can incur on each project. You can use that bank statement to reconcile your transactions construction bookkeeping to make sure they match up with your own accounting system, invoices, payments, etc. In general, a construction business with gross receipts (also known as Business Tax Receipts) over $10 million must use the percentage of completion revenue recognition method for tax purposes. A construction business with gross receipts under $10 million can use the completed contract method on construction projects that last less than two years.

Financial Reporting

• As a general rule for independent contractors, keeping organized financial records should always be a top priority since, in some cases, being an IC can carry a greater risk of being audited.
• Losing your bookkeeping records due to a natural disaster, a computer virus, or hardware failure can be devastating.
• According to the Construction Financial Management Association, pre-tax net profits average between just 1.4% and 3.5% for contractors and subcontractors.
• To effectively manage these variable expenses, you can use FreshBooks Project Accounting Software which lets you track project financials and create reports quickly and easily.
• When choosing a bookkeeping method, it is important to consider your business needs, the time and resources you have available, and your experience with bookkeeping.

She’s passionate about helping people make sense of complicated tax and accounting topics. Her work has appeared in Business Insider, Forbes, and The New York Times, and on LendingTree, Credit Karma, and Discover, among others. This can make it difficult to track expenses and effectively calculate the profit generated from each service category. Set limits, turn tracked time into automated timesheets, and send invoices with Hubstaff. Opting for a solution that requires extensive training before you can use it is not only going to cost you time but also risk frustrating both you and your employees.

Bench Bookkeeping: Best for Newer Businesses

Intuitive solutions have their most common functions presented in a single menu rather than spread over half a dozen different sections. This will ensure that you don’t end up with corrupted backups that you can’t use to recover your data. There’s also the option of emailing digital receipts to an Expensify email address to import expenses that way. The first set should cover information on the progress milestone met and reflect the total amount authorized for the services.

The 5 Best Bookkeeping Services for Small Business

At Meru Accounting, we comprehend that reliable financial reporting is vital for making well-informed decisions and securing financing for your company’s expansion. We furnish you with accurate and timely financial reports that offer a transparent view of your company’s financial health. In conclusion, bookkeeping is essential to running a successful business as an independent contractor.

• The main benefit of charging a client in milestone payments is that you don’t need to wait until you fully complete the job to get paid.
• From initial estimates to final walkthroughs, you can keep every stakeholder up to date, refine every schedule and optimize every resource allocation to maximize your ROI.
• This is an informational form that must be submitted to the IRS in order to report non-salary income.
• It is important to accurately report your taxable income and any deductions and credits you are eligible for.
• If you operate across state lines, you may also need to account for additional tax payments.

Independent contractors have a unique set of bookkeeping needs compared to traditional employees, as they are responsible for their own taxes and financial record-keeping. SLC Bookkeeping has helped hundreds of small business owners with managing their back office functions and growing their businesses. Whether you need help deciding what kind of https://www.inkl.com/news/the-significance-of-construction-bookkeeping-for-streamlining-projects entity to launch or would like assistance with back paperwork, financial planning or growing your business, call SLC Bookkeeping.