How do you trim overhead costs in construction accounting? Trimming overhead costs in any industry seems straightforward: look at the cost pool and cut back where you can. The problem is overhead costs are often fixed; even the variable costs are not always easily corrected in the short run. This becomes more complicated in construction accounting, especially when costing out jobs or bidding on larger projects. Without knowing exactly where your overhead costs are, you can run into profitability problems if those costs are ballooning, but you can’t pinpoint where it’s happening.
The Cost of Doing Business Should Not Cost You Business
The last thing you need is to discover late into a project that cost overruns are eating into your profit margins. When you control your overhead costs from the beginning, you don’t need to worry about them creeping up on your profitability. One of the best places to tackle costs is in your construction accounting practices.
- Speed up your accounts receivables. The faster you get your invoices completed and into the hands of those owing you money, the faster you can get paid. Turning to automated, online accounting software can help you keep track of invoicing on the fly, making it less costly to manage the process. Along with strong policies for collecting past due amounts, quick and accurate invoicing can put you at the head of the line for payment, improving your cash flow.
- Streamline your payables. Going digital with your account’s payables will save you valuable time over chasing paper and manually checking to make sure things are paid on time. Check the net terms on the invoice, and don’t be afraid to ask about quantity, loyalty, or early payment discounts, especially with suppliers and subcontractors.
- Avoid shoe boxes. Switch to a receipt capture system that integrates with your accounting software, so no matter where you are, your receipts can be digitally filed and archived with nothing more than your phone. In addition, today’s systems will allow for quick categorization, matching receipts to bills, and forwarding information as needed.
Work With Industry Accounting Professionals
Choosing digital and online software will save you hundreds of administrative hours every year. But to get the most out of the system, consider working with construction accounting experts. By coordinating your system with the professionals, you can save even more with advisory, bookkeeping, document management and taxes. With far less effort on your part, you will have better reporting and clean books, resulting in faster turnaround times with fewer hours. Let Working Numbers and their construction accounting expertise drive down your overhead costs and improve your bottom line today.