Are you ready to grow your construction company or building business and take it to the next level? Before you do, there are a few things you should consider.
#1 BOOKKEEPING NEEDS TO BE DONE RIGHT TO SLEEP AT NIGHT
Do you currently have someone doing the bookkeeping for your construction business? Do they have a good handle on it? If so, that’s great. But how do you know for sure? What we often find is that business owners completely confuse the differences between bookkeeping and tax planning. So always remember, bookkeeping and tax planning are not the same thing. With well handled bookkeeping, you should always be able to determine your net income.
Some of the mistakes we often find in the construction industry is a lot of short term jobs and long terms jobs are not posted correctly in their books. This causes the profit numbers to be incorrect and can mislead you when it comes time to bid on projects. And as you know, not biding on a job right can be detrimental to a construction business.
So whoever is doing your bookkeeping, make sure they are doing it correctly. Otherwise, it can lead to a lot of sleepless nights.
#2 MANY CONTRACTORS DON’T KNOW HOW TO PAY THEMSELVES
In my experience, many contractors have no idea how to draw a salary for themselves from their business. If your business is set up as an S corp, you are required to run payroll, but do you even have the money to run payroll? Having a CPA in your corner can be very helpful because they can see what you do not while helping you stay compliant with the latest IRS guidelines when it comes to payroll.
#3 PAY EVERYTHING ON TIME
When it comes to paying your taxes, there are a few things to consider. First off, it’s best to pay Uncle Sam his money on time. You really don’t want to pay late fees and penalties if they can be avoided. Also, make sure you are paying all of your withholdings if you have employees. These are just the basics of what it takes to run a construction business correctly from a tax and bookkeeping perspective.
#4 GET YOUR BOOKKEEPING IN ORDER ASAP
As we stated in our previous tax tips for construction businesses article, the tips we are sharing here are more about the bookkeeping and not tax planning per se. Getting your books in order is the first step to running a healthy business, and tax planning would be the next step.
If you are not sure if your bookkeeping is being run as it should, a licensed CPA can help you with that.
#5 BUILD FOR THE FUTURE WITH TAX PLANNING
Once the bookkeeping is running as it should, the tax planning phase can begin. With tax planning, a CPA will meet with you, go over your goals, pull reports and help you put together a clear plan for the future of your business.
If you have any questions about setting up your contracting or construction company, tax planning, or bookkeeping, be sure to give us a call at 407-382-6658. We are always here to help.