As a bookkeeper, how do you help your clients to grow their business?
I specialize in small Construction Accounting, I look at the Cost Drivers and Profit Margins. Upon new projects I have them keep a detailed list of purchases and income and we run a P&L on the job to see where they can improve.
I target their COGS to be under 40% and that includes their labor. I equip my clients with a Cost Driver Spreadsheet so they can run numbers on their own as well to see what type of profit they want to make on any upcoming job.
I also look for silent streams of income that are no brainers, brokering etc. And I create WIP reports (Work In Progress reports – Track COGS, start dates, billing dates and percent complete) and Cash Flow Projections so they know when and how much to pay themselves.
It is VERY specific, Cost Accounting is a different animal.
We set goals, my experience after working in the industry for over 20 years is that every company has a different focus. I sit down and find out what that is… Sometimes it’s getting a spouse to stay home with the kids and sometimes it’s building enough equity to franchise. It really depends.
Profit Margins increase when we start paying attention to all the costs so I also research vendors and suppliers that can give better terms and discounts. Same thing with credit card merchants. I find that by listening to my client and producing the tools they need to succeed, we see results within a quarter if not two, unless the client chooses to continue operating the way they have been. Most change though. Profit Margins fluctuate depending on the type of industry and contract amounts…
Most of my clients typically have no clue what construction accounting is, so I teach them. I meet with half my clients weekly. I have learned that if the money is coming in no one asks questions.
Once there is a recession or a major event, that is when managers and owners start looking at numbers. I try to teach my clients to build slow and strong, meaning, don’t spend the profits just because it is there. Develop the budget for your home and then we develop a budget for the company or vice versa depending on entity etc.
Ana Bradfield is the owner of Bradfield Consulting – A professional accounting services firm providing accounting, bookkeeping and controller services.