How much of your day was spent on billable work for your employer? You’re in meetings, you’re checking email, or you’re staring off into space wondering what bad decisions got you here. And, since you’re so generous, you’d want to buy your employee a new computer. Oh, and you’ll need to add more licenses to the software you use. Accounting software will make it easier to do so with the ease of invoicing.

Contractor Bookkeeping Services we offer

Construction companies also experience fluctuating overhead costs. Consider the cost of insurance, travel, workers’ compensation, materials, subcontractors, equipment, and more. You will need to factor this into your construction accounting for each construction project and for the business as a whole.

Offering Financial Insights

The best way to stay organized is tracking your day-to-day transactions, reconcile your accounts on a regular basis, and use construction accounting software. An online bookkeeping solution uses cloud-based software to connect you with a team of bookkeepers, who do your books for you (like Bench). It’s similar to a bookkeeping firm, except more affordable, since automation cuts the bulk of manual work.

• In this case, you’ll need to become acquainted with and use the same bookkeeping services your firm does.
• Even if there are some immediate advantages, like avoiding having to pay taxes on that money, getting discovered during an audit is not worthwhile.
• To stay on top of cash flow and keep your books in check, you will need a flexible yet organized construction accounting system.
• If you do not file your profit and expenses, you are putting yourself at risk of being audited by the IRS.
• Before making your final decision, ask potential bookkeepers for references.
• If you attempt to reconcile your books on your own, it can be a monumental task.

You feel like you don’t have time

Having a company entity comes with numerous tax advantages and savings. The amount bookkeepers charge will depend on where they’re located, experience, industry type, and other services needed. Accountants also go through formal training to obtain a degree or certification, whereas bookkeepers do not. This makes hiring an accountant more expensive than hiring a bookkeeper. Accountants are usually more skilled and in a more advanced position than bookkeepers.

Tax Estimations: Pay Now to Save!

• They will be better equipped to accurately pay their taxes to the IRS.
• (I know, 2 of those weeks are usually paid holidays…just follow me anyway) This is the new calculation if you’re getting 30 hours of work per week.
• Many new independent contractors will start out doing bookkeeping themselves.
• If you feel like you never have time to get your books updated and it’s taking up resources to do it yourself, a bookkeeper can help reduce the time you spend on financial tasks.
• While there are short-term benefits, like not paying taxes on that money, it is not worth being caught during an audit.

Before you begin working for a client, you will typically be required to sign a written contract (thus the term “contractor”). With all of these factors in mind, you’ll be ready to dive into your bookkeeper search and feel more confident knowing what’s right for you and your business. Read on to learn how to hire a bookkeeper, tips and questions to ask, and the benefits of handing over the work to the pros. This can make it difficult to track expenses and effectively calculate the profit generated from each service category. A firm may employ a range of bookkeepers, from beginners to experts. It’s important to ask if they guarantee a certain level of quality, so the accuracy doesn’t change from person to person.

Are you ready to be done with the stress of handling your bookkeeping?

Having said that, we highly recommend using modern, cloud-based software to help with bookkeeping and recording financial transactions. There are a ton of great free and paid options that make it much easier to handle bookkeeping for independent contractors. Also, some remote bookkeeping services are able to automatically import your financial information—transactions from bank and credit accounts, for instance. Reconciling bank accounts is critical in staying on top of your bookkeeping. This involves comparing the transactions recorded in your bookkeeping system with the transactions recorded by your bank.

Integration with Other Business Tools

If you’re getting 30 hours of billable work from your employee, they’re only 75% billable. In reality, 75% is generous, but we’ll use that for today’s scenario. Assuming your rules don’t prevent it, there are situations when using a contractor always makes more sense. When deciding to bring in a professional or not, you may ask yourself if you can afford to. However, what you should be asking is, can you afford to not bring in a professional to help with such important information. Recording every expense is necessary whether you are big or small.

Firm of the Future

You may easily https://digitaledge.org/the-role-of-construction-bookkeeping-in-improving-business-efficiency/ balance your bank accounts by accounting for independent contractors with software like MyCountSolutions, Zero, Wave, or Freshbooks. Reconciling bank accounts is something independent contractors should consider. You can make sure that every transaction matches your accounts by practicing reconciliation. Anyone who works on a contract basis to finish a specific project or task is an independent contractor. You are considered a business by the law because you are an independent contractor.

• The trade-off is that your employers do not put money towards your health insurance, workers’ compensation, bonuses, unemployment taxes, payroll taxes, or contribute to your 401(K).
• You run the danger of an IRS audit if you fail to file your profit and cost statements.
• Just look for a bookkeeper with high reviews from other customers like you.
• As an independent contractor, you have a lot more freedom than employees of most workplaces.
• Some bookkeepers do provide tax preparation services, but usually, they’ll be doing it from their own experience, as not all bookkeepers are professional tax advisors.
• Look for patterns in the reviews to get a sense of their strengths and weaknesses.

Also, if you don’t have a lot of work to outsource, it makes sense to use a contractor. The exception here is if you think the work will expand very soon. If you only have 2 hours per week to outsource, but it may grow to 20 hours per week in a couple of months, then maybe hire a part-time employee.