You have an electrical contracting business and have lots of work. But, you do not seem to be seeing the profits that you imagined you would have at this point. This is not an uncommon problem in the skilled trades or in any small business. And, simply working longer and harder is not necessarily the right answer. To increase your electrical contracting profits you need to have a clear picture of your cash flow and especially your expenses. The problem in many businesses is the bookkeeping or accounting does not provide any real insight into these issues and your profit is what suffers. At Exigo Business Solutions in the Kansas City area, we often tell our clients when you outsource your bookkeeping it can pay for itself. Here we provide two solid ways to increase your electrical contracting profits.
There are two good reasons to outsource your bookkeeping.One is that it is not accurate or done on time. Bookkeeping is a cost of doing business but you are wasting money if the job is not done right. This one is easy.
The other reason to outsource your bookkeeping may be harder to see. Ideally, your bookkeeping will provide you with insights into which jobs have been most profitable, where you can most cost-effectively buy materials, who is paying you on time and whom do you need to contact, again and again, wasting your valuable time. At Exigo Business Solutions we use QuickBooks,the best small and medium-sized business bookkeeping and accounting software.And, we provide our clients with custom reports that help them more effectively track expenses and cut out waste.
Let us help you get a handle on tracking expenses, budgeting, and selecting the most profitable jobs. Let the top accounting firm in the Kansas City area help you increase your electrical contracting profits.
A basic problem that most businesses have is that they view profits as a goal to be achieved instead of a habit that needs to be established. The second reason you will want to outsource your bookkeeping in order to increase your electrical contracting profits is to use the Profit First method of bookkeeping.
Profit First is a new way to look at the old “bank balance”way of doing your books.
This has been standard bookkeeping forever. Unfortunately,too much ends up being hidden from view when we simply assume that sales and expenses are set in stone and profit (or the lack of it) is the passive result.
This is the Profit First formula. The numbers that go into the bookkeeping are the same as with the old way of doing things. But there are two major differences that will immediately and permanently increase your electrical contracting profits.
With the Profit First method, you will set up separate bank accounts for profit, owner’s pay, taxes, and operating expenses. At Exigo Business Solutions we are Profit First Professionals and can help you with the specifics. Then, twice a month you will allocate money from sales to the various accounts.
The first thing this does is guarantee a profit the first time you do it. Then it guarantees that you will be steadily banking your profit, owner’s pay, and money to pay taxes throughout the year.
What happens when you use the Profit First method is that you start paying closer attention to your expenses. And, if your current bookkeeping setup is not up to the task, you will outsource the job to someone who knows Profit First. They will use state-of-the-art accounting software like QuickBooks in order to generate meaningful reports. You will use these reports to make the necessary changes to reduce unnecessary expenses. In the end, with the Profit First method, your business will have better budgeting and cash flow management. And, you will have more insight into the jobs you are taking that are the most profitable and which ones may actually be costing you money!
For more information on how outsourcing your bookkeeping and using the Profit First method can increase your electrical contracting profits, contact us at Exigo Business Solutions in the Kansas City area.