Introduction: Running a home-building business means managing countless moving parts, and one critical aspect is understanding your monthly financials. In this story, we meet two builders—Bob, the bad builder, and Sammy, the star. Their approaches to financial management couldn't be more different. Let's dive into how Sammy thrives while Bob struggles and what you can learn from their experiences.
Bob’s Struggle with Overwhelm:
Bob finally receives his profit and loss statement but has no idea where to begin.
Overwhelmed by rows and columns of numbers, Bob feels lost without guidance.
He doesn’t know if his vendors have been paid or how to interpret his financial data.
Without clarity, Bob misses opportunities to save money and improve profitability.
Sammy’s Success with the Right Support:
Sammy partners with a skilled accountant to focus on critical financial metrics.
She cuts through the noise of data overload to concentrate on:
Profit margins
Cash flow
Accounts payable (AP) and accounts receivable (AR) balances
Job-by-job profitability
Sammy regularly reviews detailed QuickBooks reports with her accountant, enabling her to see:
Paid and pending expenses for specific jobs
Which subcontractors are owed and how payments were processed
Advanced reporting like vendor expenses and column-specific data
How the Right Focus Makes All the Difference:
Sammy confidently tracks her business’s performance every month.
By understanding her financials, she can:
Make informed decisions for budgeting and saving
Identify opportunities to improve profitability on each job
Bob, meanwhile, flounders without guidance, missing critical insights that could transform his business.
Conclusion: Be like Sammy the star, not Bob the bad builder. A skilled accountant can help you cut through the noise, focus on the right metrics, and take actionable steps to improve your business's financial health.
Ask your accountant to guide you through advanced reporting tools, like enabling products and services in QuickBooks. These insights can revolutionize your understanding of where your business stands.
For more stories and tips, check out our latest video with Jon Markee, your Builder CPA.