Running a business means that you have to take care of a lot of paperwork and have a record of every transaction you make. An essential part of that is accounting. Many business owners find accounting tedious and complicated, especially if they're unfamiliar with all the accounting terms.
If you're a roofing contractor, there are a few key accounting areas that you need to be aware of to keep your business on track financially. Here are a few hidden accounting transactions that roofing contractors often overlook.
As a roofing contractor, you may hire subcontractors to help with specific tasks on a project, like gutter or metalwork installation. These tasks might be outside of your company's scope of work, or you might simply not have the workforce to handle everything yourself.
While subcontractors can be a big help, you need to be careful with how you account for their expenses. Make sure you keep track of all invoices and receipts related to subcontractor work. This will help you stay organized and avoid any accounting discrepancies down the road.
Include the cost of materials, labor, and any other associated costs. Remember to account for the cost of equipment rental or lease payments, if applicable. This way, you'll have a clear picture of your project's actual costs and can price your services accordingly.
Change orders are a common occurrence in the roofing industry. They happen when the scope of work changes after the contract has been signed. This could be due to unforeseen circumstances like bad weather or damage to the existing roof.
These obstacles often cost money to get around, so it's important to document them properly. You might have left some room for change orders in your original contract, but if not, you'll need approval from the homeowner before proceeding.
After you do, make sure you get detailed quotes from your subcontractors for the additional work. This will help you determine the true cost of the change order and avoid accounting errors.
Something as simple as forgetting to include the added cost of materials can throw off your whole budget. So, be sure to document change orders thoroughly and keep track of all associated costs that come with the changes.
Keeping track of these hidden accounting transactions ensures that your roofing business is on solid financial footing. Stay organized and stay on top of your accounting, and your business will be successful for years to come.
Learn more about accounting for roofing contractors by reaching out to a bookkeeping service.