As a contractor, you probably didn’t get into the business because of a love of working with numbers. Working with people, sure. Working with your hands, definitely. But working with columns of figures, probably not. If you’re not managing your accounting properly, you could be unintentionally slowing down your business growth. You can maximize your growth potential with a few accounting secrets.
An estimate can tank your job before it even gets started. Overestimate the job and you could be eliminated from contention. Underestimate and you could end up operating at a loss. If you underestimate and then have to bill the customer for additional items, your customer might not have it in their budget to pay you. You could end up with a dissatisfied customer, poor word of mouth, or having to chase down payments in collections.You’ll make your customers happy and grow your business if you use consistent strategies to determine estimates. You may get a discount on supplies if you’re ordering over a certain quantity. If your numbers are close to the price break, it might be better to over-order and save on the materials. Use payroll software to estimate your labor costs so you account for different rates of pay and overtime. Build in some contingencies like damages, loss of time due to weather, and errors in ordering.