As many contractors know, outsourcing various areas of the business can hurt overall profitability. However, with certain administration duties, it’s in the contractor’s best interest to outsource. One of these administrative tasks for contractors is bookkeeping and accounting. Due to the level of detail involved and having to track everything that goes into a particular job, it’s best for construction groups and contractors to outsource this area of the business.
Here are 3 reasons why outsourcing accounting duties just make sense.
For Filing Taxes at End of the Year
When you are self-employed or working as a contractor for yourself, taxes can become complicated fast. You have to make sure you get the right paperwork from your clientele and submit everything to the IRS. But that’s only the first part of it. A CPA or bookkeeping firm can also advise you on certain tax strategies that will save you money in the long run. For instance, the way you handle the accounting for any equipment you lease may come with certain tax benefits that can save you money.
If you’re like most contractors, you probably don’t want to spend your days messing around with Quickbooks or another type of accounting software, especially if it gets into tricky compliance for lease accounting. Instead, hire an expert who works in different accounting programs on a daily basis. Bookkeeping businesses like Busy Bee Advisors are certified in applications like Quickbooks and know how to operate the software efficiently. Rather than waste time trying to learn a new program, let a bookkeeping firm handle it for you.
Time to Do What You Do Best
As a contractor, you’re a lot better at roofing, decking and building things than handling your own accounting. By outsourcing a business administration responsibility like accounting to a third party firm, you free up any time you would have spent on it and you can use that time to continue to grow your business or refine a skillset. While you’re on the job and focused on the work for the client, you’ll be less worried on journal entries and logging expenses in your accounting software.
Is a Bookkeeper Expensive?
Thankfully, most accountants charge a fair rate for their services. Depending on the exact service you need, you’ll be able to find a package for a bookkeeper, a full-fledged accountant or a CPA. Just note that most CPAs will charge mare because they have an extra type of licensing.
How Often Should You Meet With Your Accountant?
Answers to this common question will vary depending on how much revenue your contracting or construction business brings in. For instance, if you’re making $50,000 a month, you’ll want to meet with your accountant on a monthly basis to make sure all of the numbers look accurate. Likewise, if contracting is more of a part-time gig for you, consider meeting with your accounting firm on a quarterly basis.
Most professional accounting groups also offer remote bookkeeping services that allow you to be hands off most of the time. For most independent contractors, this is a must have service.
As a next step, evaluate your current situation. How are your books being handled now and does it make sense to free yourself up from this type of admin activity? If so, you’ll find plenty of accounting companies ready to earn your construction business.