This Podcast Is Episode 644, And It's About Five Hidden Ways Contractors Lose Profits (And How To Stop It) Where did the money go? If you've ever looked at your bank account at the end of a busy month and thought, "I did all that work—so where did the money go?", you're not alone. This is one of the most common frustrations we hear from small business owners in the construction industry. You're booking jobs, staying busy, and delivering great work—but the profit doesn't seem to match the effort. As construction bookkeeping specialists, we've seen behind the numbers of dozens of small contractors. And time and again, we find the same hidden leaks draining their profits. The good news? Once you know what to look for, you can fix them—and finally start keeping more of what you earn. Here are five common ways contractors lose profits (without even realizing it)—and what you can do to stop the leaks. 1. Untracked Labor Hours: Working More Than You Billed Labor is often your most considerable cost. But for many small contractors, labor tracking is one of the weakest parts of their system. If you (or your crew) aren't logging actual hours worked on each job, you're likely underestimating how much time the project really took. That means you're effectively working for free on those "extra" hours. Real example: A contractor estimated a bathroom remodel at 40 hours of labor. The job actually took 55 hours. At $50/hour, that's $750 of lost profit—just from labor under-tracking. Multiply that across several jobs, and you can see how the profits evaporate. How to fix it: Use a simple time-tracking tool (like QuickBooks Time, or even a shared spreadsheet). Log hours daily—not at the end of the week when details are fuzzy. Compare estimated vs. actual hours after each job. This helps you improve future bids and spot inefficiencies. Bookkeeper's tip: If you track hours properly, I can show you job profitability in real time—and you'll see exactly which jobs (or crew members) are eating into your margin. 2. Unapproved Change Orders: Giving Away Work for Free Scope creep is the silent profit killer. A client asks, "Can you just add this?" and you say yes because it seems like a minor request. But those "little extras" add up quickly—and suddenly your margins are gone. Real example: A deck project initially included a standard railing. Midway through, the client asked for an upgraded design. The contractor agreed but never adjusted the invoice. The upgrade cost him $500 in materials and 10 extra labor hours—completely unpaid. How to fix it: Create a straightforward change order process. Stop work when clients request something new until the change is approved in writing. Even if it feels awkward, remember: change orders protect both you and the client by keeping expectations clear. Bookkeeper's tip: Keep a change order log for each job. We can help track approved vs. pending changes—so nothing slips through the cracks. 3. Material Waste and Overruns: Small Leaks, Big Losses Materials are another common leak. If you're not reconciling receipts against your estimates, you may be spending far more than you realize. It's not always theft or big mistakes—it's the little things: over-ordering, miscuts, lost supplies, or last-minute runs to the hardware store. Real example: A contractor estimated $5,000 in materials for a kitchen remodel. By the end, he had spent $5,800. That $800 didn't seem huge—but on a project with a $2,000 expected profit, it wiped out nearly half. How to fix it: Match every material receipt to the job. Track waste (e.g., lumber offcuts, unused drywall sheets). Build a small buffer into estimates (5–10%) to account for inevitable overruns. Do weekly check-ins: Are material costs still aligned with the budget? Bookkeeper's tip: If you send us your receipts consistently, we can flag when a job is trending over budget before it's too late. 4. Late Invoicing and Slow Collections: Cash Flow Gaps Many contractors do the work first and think about invoicing later. The problem is that late invoices result in late payments. And late payments can create cash flow crunches that force you to dip into savings, use credit, or delay your own bills. Worse, some clients "forget" to pay unless reminded. If you're not consistent about invoicing and follow-ups, you might never collect everything you've earned. Real example: A contractor finished a $10,000 basement project but didn't invoice until six weeks later. The client delayed payment for another four weeks. That's 10 weeks without income—while the contractor was already paying subs and suppliers. How to fix it: Invoice immediately at milestones—not weeks later. Use progress billing: collect deposits upfront, then bill at set phases. Set clear payment terms (Net 15, Net 30) in your contracts. Automate reminders using software like QuickBooks, Joist, or FreshBooks. Bookkeeper's tip: We can set up a system where invoices go out automatically and overdue payments are flagged—so you never have to chase clients down again. 5. Forgetting Overhead: Missing the True Cost of Running Your Business This is one of the biggest mistakes we see: contractors price jobs based only on direct costs (labor + materials) and forget to include overhead. Overhead is everything it takes to keep your business running, like: Truck payments and fuel Insurance and licenses Office supplies and software Marketing and advertising Your own salary! If you don't factor in overhead, you might think you made a profit—but really, you just broke even. Real example: A contractor charged $15,000 for a renovation. Materials and labor cost $11,000, so it looked like a $4,000 profit. However, once overhead was factored in (including fuel, insurance, phone, bookkeeping, etc.), the actual profit was closer to $1,200. How to fix it: Calculate your monthly overhead. Divide that into your billable hours or projects. Add it to every estimate. Bookkeeper's tip: We can calculate your overhead burden per job, so you'll know exactly how much to add to every quote to stay profitable. Recap: 5 Hidden Profit Leaks Untracked labor hours Unapproved change orders Material waste and overruns Late invoicing and slow collections Forgetting overhead Each of these may seem small, but together they can drain thousands of dollars from your business every year. The Bottom Line: You Don't Have to Keep Losing Money The difference between "busy and broke" and "busy and profitable" isn't more jobs—it's better control of your numbers. When you track your labor, materials, change orders, invoices, and overhead, you stop the leaks and keep more of the money you've already earned. And you don't have to do it alone. As construction bookkeeping specialists, we help small contractors: Track job profitability in real time Catch hidden leaks before they get worse Set up systems that save time and reduce stress Contact us today and get the help you need. About The Author: Norhalma Verzosa is a Certified Construction Marketing Professional and serves as the Web Administrator of Fast Easy Accounting, located in Lynnwood, WA. She holds a Bachelor's Degree in Psychology and is a Certified Internet Web Professional, with certifications in Site Development Associate, Google AdWords Search Advertising, and HubSpot Academy. She manages the entire web presence of Fast Easy Accounting using a variety of SaaS tools, including HubSpot, Teachable, Shopify, and WordPress.

This Podcast Is Episode 643, And It's About Is It Time To Hire A Bookkeeper Or Keep Doing It Yourself A Real-World Guide for Small Construction Business Owners If you run a small construction business, you've probably worn every hat—from estimator and foreman to project manager and, yes, bookkeeper. Initially, doing the books yourself may have seemed manageable. But now, as you grow, you might be asking: "Do I need a bookkeeper, or can I keep doing this myself?" It's a valid question—and the answer depends on where your business is, where it's going, and how you manage your time and money. As construction bookkeeping specialists, we've worked with both first-time business owners and seasoned contractors. We've seen the difference it makes when you stop guessing at your finances and start getting reliable, real-time information from a professional. This post will break down the pros and cons of DIY versus hiring a bookkeeper, helping you determine which option is right for your business at this time. DIY Bookkeeping: The Pros Let's start with what's great about doing it yourself, because yes, it can make sense for some businesses in the early stages. 1. It's Low Cost (on the Surface) When money is tight, it's tempting to save every dollar. Doing the books yourself means you don't have to pay a monthly fee or hourly rate. 2. You Learn the Basics By managing your books, you get hands-on experience: How income and expenses are tracked What reports matter How invoices, payments, and taxes work That knowledge helps you communicate more effectively with professionals in the future. 3. You Stay Closely Involved No one knows your business like you do. DIY bookkeeping keeps you aware of every transaction, which can be helpful when you're building habits and financial awareness. DIY Bookkeeping: The Cons While DIY works in the beginning, it often becomes a liability as your business grows. 1. It's Time-Consuming Your evenings and weekends should be spent resting or planning, not catching up on receipts, reconciling bank accounts, or fixing errors from two months ago. Time spent doing books is time not spent building, selling, or strategizing. 2. Mistakes Are Easy to Make Without training, it's easy to: Misclassify expenses Forgot to reconcile accounts Lose track of job costs Miss important deadlines (like sales tax or quarterly estimates) These errors can result in IRS penalties, underpricing, or inaccurate reporting, which can harm your business. 3. Poor Financial Visibility Most DIY systems don't provide accurate job costing, cash flow forecasting, or profit tracking. If you don't know: How much are you really making per job When you can afford to hire or buy equipment Whether your prices cover your overhead …then you're not making informed decisions—you're guessing. 4. It Adds to Your Stress Let's be real: most contractors don't enjoy bookkeeping. It's one more task in an already overloaded day. That constant "I still need to do my books" feeling adds unnecessary pressure. When to Consider Hiring a Bookkeeper Hiring a bookkeeper isn't just about outsourcing busywork—it's about buying clarity, control, and peace of mind. Here's how to know it might be time. 1. You're Consistently Behind If you're weeks or months behind on categorizing expenses, reconciling bank accounts, or sending invoices, it's time for support. A good bookkeeper will not only clean up your books but also keep them up to date moving forward. 2. You're Making More Than $100K in Revenue Once your business is generating six figures or more, your financial picture becomes more complex: Job costing becomes essential Overhead needs to be tracked properly Taxes become more critical (and riskier to ignore) That's where a bookkeeper helps you protect what you're building. 3. You Want to Grow (Or Work Less) Whether your goal is to scale, take on larger jobs, or finally reclaim some weekends, hiring a bookkeeper frees up your time and mental space to make that happen. 4. You're Not Sure What Your Numbers Mean If you've ever looked at a Profit & Loss report and thought, "What am I supposed to do with this?"—that's your cue. A good bookkeeper doesn't just send you reports—they help you understand them and use them to improve your business. DIY vs. Hiring a Construction Bookkeeper: Side-by-Side Comparison Feature DIY Bookkeeping Hiring/Outsourcing 1. Cost Low upfront Monthly fee (varies) 2. Time required High Low (with some client input) 3. Accuracy Varies (risk of errors) High (with checks and clean records) 4. Stress level Often high Much lower 5. Job Costing & Profitability Often missing or incomplete Built-in and consistent 6. Tax readiness Risk of scrambling at year-end Clean books, ready for CPA 7. Scalability Harder to grow confidently Easier to plan and expand Common Concerns About Hiring a Bookkeeper (And the Truth) "Can I afford it?" Hiring a bookkeeper isn't an expense—it's an investment. Most of our clients save money long-term because: Their invoices go out on time They stop underpricing jobs They avoid late fees and missed tax deductions "What if I'm too disorganized?" That's precisely why you need a bookkeeper. A good one will help you build systems that work for you, not shame you for being behind. "Will they understand construction?" Not all bookkeepers do—but we do. We specialize in construction businesses and know how to track labor, materials, subcontractors, job profitability, and project phases accurately. How a Bookkeeper Helps You Grow Once your books are in order, you can: See which jobs are most profitable Adjust your pricing based on real data Budget for slow seasons Plan for hiring or equipment purchases Sleep better knowing your business is financially healthy You stop reacting and start leading. Final Thoughts: Don't Wait Until It's a Mess Suppose you're spending hours each month on books, avoiding financial check-ins, or unsure whether your job is making money. In that case, it's probably time to stop doing it yourself and outsource it to us. Hiring a bookkeeper is like hiring a subcontractor—you could do the work yourself. Still, someone with more experience and tools will do it faster, cleaner, and with fewer mistakes. You build homes. We'll help you build a business that lasts. Ready to Explore Bookkeeping Support? If you're ready to free up your time, reduce financial stress, and finally understand what your numbers are telling you, let's talk. We can go over: Where your books stand now What kind of support makes sense for your business How to set up a system that works (without drowning in spreadsheets) Your time is too valuable to spend chasing receipts and guessing at job costs. Let's fix that. About The Author: Norhalma Verzosa is a Certified Construction Marketing Professional and serves as the Web Administrator of Fast Easy Accounting, located in Lynnwood, WA. She holds a Bachelor's Degree in Psychology and is a Certified Internet Web Professional, with certifications in Site Development Associate, Google AdWords Search Advertising, and HubSpot Academy. She manages the entire web presence of Fast Easy Accounting using a variety of SaaS tools, including HubSpot, Teachable, Shopify, and WordPress.

This Podcast Is Episode 642, And It's About How To Know If It's Time To Raise Your Rates Without Losing Clients A Practical Guide for Contractors Who Want to Stay Profitable—Without Scaring Off Business If you're like most small construction business owners, you've probably had this thought: "I'm working non-stop, but I'm still barely keeping up—should I raise my prices?" And then right after that, the fear kicks in: "What if I lose clients? What if no one can afford me anymore?" As construction bookkeeping specialists, we hear this frequently. Contractors are nervous to raise their rates because they worry it'll cost them jobs or damage their reputation. But here's the truth: Raising your rates isn't about greed—it's about survival. In this post, we'll guide you through understanding when it's time to increase your rates, how to do it without losing your best clients, and how your books can provide the data and confidence to price with clarity. Why Contractors Hesitate to Raise Rates Let's start with the everyday fears: "My clients won't pay more." "I'll lose out to cheaper competition." "What if I price myself out of the market?" These fears are common, but often based on assumptions rather than data. Low rates can hurt your business more than help it. They lead to: Burnout from overwork Poor-quality clients who expect a lot and pay late Inability to reinvest in tools, help, or marketing Projects that cost more than they bring in So let's flip the script. Instead of fearing a rate increase, let's explore how to raise with purpose—and use facts, not fear, to guide your pricing. 1. Start with Job Costing Before raising rates, you need to know one thing clearly: Are you actually making money on your jobs? Job costing is the process of tracking: Labor hours (including your own!) Material and supply costs Subcontractor fees Equipment and tool usage Permits, dump runs, gas, insurance A share of your overhead (office, truck, phone, software) Once you tally this up, compare it to what you charged. If you're seeing slim margins—or worse, negative ones—you're undercharging. Bookkeeper's Tip: Start by reviewing your last 5–10 jobs. Break them down into: Estimated vs. actual cost Hours quoted vs. hours worked Gross profit (before overhead) Net profit (after overhead) Even a simple spreadsheet can help you see which jobs are winners—and which ones need a pricing tune-up. 2. Watch for These Signs - It's Time to Raise Rates Still unsure? Here are seven signs it's time to raise your prices: 1. You're booked out for weeks (or months) This means demand is high, and your pricing may be too low. If people are lining up, a modest increase won't deter them. 2. You're working too hard for too little If you're exhausted, working weekends, and still not taking home enough, your rate is too low. Period. 3. You haven't raised your prices in over a year Material costs, fuel, insurance, and labor have all increased. If your rates haven't changed, you're likely absorbing the difference. 4. Your quality has improved Are you more skilled than when you started? Do you offer better results, smoother communication, or cleaner job sites? Then you should be charging for it. 5. You're attracting low-quality clients If you constantly deal with haggling, late payments, or poor communication, your pricing is attracting bargain hunters rather than quality clients. 6. Your tools, overhead, and team cost more Running a legit business costs money. If you're licensed, insured, and invest in quality, your rates should reflect that. 7. You're turning away work If you're saying no to jobs because you're too busy, that's a strong sign it's time to raise your prices and focus on higher-value projects. 3. How to Raise Rates Without Losing Good Clients You don't need to double your rates overnight or announce a price hike in bold letters. Here's how to do it strategically and professionally: A. Start with New Clients This is the easiest path. Quote your new price to new inquiries in the future. They won't know the old rate, so there's no resistance. B. Add Value, Not Just Cost When raising rates, remind clients of what they're getting: Better project management Faster turnaround Clearer communication Higher quality materials Insured and dependable work Frame your pricing as an investment, not just a fee. C. Offer Tiers or Packages For price-sensitive clients, offer a few levels of service: Basic (bare-bones scope) Standard (your usual full-service) Premium (extras like design, faster turnaround, etc.) This helps clients self-select based on budget without forcing you to underprice your work. D. Phase In Rate Increases If you work with repeat clients, give them a heads-up: "Due to rising material and labor costs, I'll be increasing my hourly/project rates starting [date]. I wanted to let you know in advance so we can plan accordingly." Most reasonable clients will understand, especially if you've consistently delivered value. 4. Use Pricing Psychology to Your Advantage Pricing is part math, part mindset. Here are a few tactics to make your price increases feel smoother: Avoid round numbers Instead of $1,000, say $1,175 or $3,950. It feels more calculated, not random. Anchor with options Show your higher price next to a more expensive (or less valuable) one. This frames your offer as the "just right" choice. Include a price breakdown. Show labor, materials, subs, overhead—so clients understand what goes into your rate. Be confident Clients can sense uncertainty. If you hesitate or over-explain, it creates doubt. Quote clearly and stand behind your values. 5. Track What Happens Next After you raise rates, keep an eye on: Win/loss rate (are fewer clients saying yes?) Job profitability (are you keeping more after costs?) Client satisfaction (any change in feedback or reviews?) Hours worked vs. income (are you earning more with less hustle?) Often, you'll find you're getting fewer clients, but better ones. And that's the goal: less chaos, more profit, and more control over your schedule. Final Thoughts You Deserve to Be Paid for What You're Worth You started your business to build freedom, not to be overworked and underpaid. Raising your rates isn't risky when data, systems, and experience back it. It's a sign of growth and professionalism. The right clients will respect it, and you'll finally start seeing the kind of income and balance your hard work deserves. Need Help Understanding Your Numbers Before You Raise Rates? As a construction bookkeeping specialist, we help contractors: Break down job costs Analyze profit margins Clean up financials Set pricing that actually works As we always say, Contractors like you deserve to be wealthy because you bring value to other people's lives. You don't need more jobs. You need the right jobs at the correct rate. Let's get you there. About The Author: Norhalma Verzosa is a Certified Construction Marketing Professional and serves as the Web Administrator of Fast Easy Accounting, located in Lynnwood, WA. She holds a Bachelor's Degree in Psychology and is a Certified Internet Web Professional, with certifications in Site Development Associate, Google AdWords Search Advertising, and HubSpot Academy. She manages the entire web presence of Fast Easy Accounting using a variety of SaaS tools, including HubSpot, Teachable, Shopify, and WordPress.

This Podcast Is Episode 641, And It's About A Week In The Life Of A Profitable Contractor- Habits That Pay Off If you're a small construction business owner, you know what it feels like to be busy but not consistently profitable. You're running from job sites to supply runs to client meetings, answering calls at night, and still wondering where the money went at the end of the month. Here's the truth we see every day as construction bookkeeping specialists: The most successful contractors aren't just working harder—they've built weekly habits and systems that keep the business running while they build. In this post, we'll show you what a streamlined, systemized week looks like in a small construction business. Whether you're a solo contractor or leading a small crew, these routines can help you stay organized, improve your cash flow, and protect your profit. Why Weekly Habits Matter in Construction When you build consistency into your week, everything improves: You stop forgetting to invoice or follow up You get paid faster Jobs stay on schedule Clients feel informed (and complain less) You catch issues before they become emergencies The goal isn't to overload your week—it's to create a rhythm that keeps your business stable and growing, without requiring you to do everything at the last minute. Monday: Plan the Work, Work the Plan Morning – Weekly Kickoff Start your week with a short job planning session. Whether you're solo or managing a team, ask: What jobs are active this week? What phase is each job in? What materials, subs, or permits are needed? What deadlines are coming up? Use a whiteboard, spreadsheet, or project management tool (like Buildertrend or Trello). Assign daily goals to each job to ensure that nothing falls behind. Afternoon – Estimate & Lead Follow-Up Block off time to follow up on: New leads that came in over the weekend Outstanding estimates Questions from potential clients Even 30–60 minutes of focused follow-up keeps your pipeline warm and prevents "ghosted" leads. Pro tip: Utilize email templates for follow-ups and store lead information in a centralized location, such as a Google Sheet or CRM. Tuesday: Tidy the Books & Track Job Costs Morning – Track Labor & Materials Take 30–60 minutes to: Log hours worked so far (your crew's and yours) Review any receipts from the job site Match expenses to job names This provides a real-time view of how each job is performing against budget, enabling you to address issues before they escalate. Afternoon – Vendor Check-Ins Call or check with your suppliers: Confirm deliveries Handle any backorders Pay invoices on time (if possible to avoid late fees) Building good vendor relationships keeps your jobs on track and your business in good standing. Bookkeeper's tip: If you send us your receipts and labor updates every week, we can update the job cost reports and alert you if anything appears to be incorrect. Wednesday: Build and Communicate All Day – Focus on Production Mid-week is often when contractors are on-site all day. But don't go silent on your clients or back office. End of Day – Client Touchpoints Send a quick project update to each active client: What was completed today or this week? What's scheduled next? Are there any delays or updates they should be aware of? A 2-minute message can prevent hours of frustration or confusion. Systematize it: Use a weekly client update template or a shared project board where clients can check their progress. Thursday: Invoice, Collect, and Prepare for the Weekend Morning – Invoicing & Payments Every Thursday, review: What milestones were completed this week? What invoices should go out today? What payments are overdue? Send invoices promptly—don't wait until the end of the month. Progress billing maintains a healthy cash flow and reduces the risk of late payments. Afternoon – Financial Catch-Up Take another 30 minutes to: Send payment reminders Record payments received Pay subs (if applicable) Review your upcoming expenses Automation tip: Utilize QuickBooks, Joist, or another invoicing tool that automatically sends reminders. Friday: Review & Reflect Morning – Job Wrap-Up or Prep Use Friday mornings to: Finalize the week's job work Clean up job sites Prepare materials or tools for Monday Afternoon – Weekly Financial Review Block 30 minutes to review: Profit & Loss report Cash on hand vs upcoming bills Job profitability (are we still on budget?) Even a basic check-in provides insight into how your business is performing, not just how you perceive it's doing. What to ask your bookkeeper: Are we on budget for our active jobs? Did we hit our revenue and profit targets this week? Any unusual spending patterns? Weekend: Rest & Reset (Or Catch Up, Smartly) Use the weekend to rest—or if you need to catch up, keep it light: Review new lead inquiries Clean up receipts or paperwork Organize tools or truck inventory Try not to overload your Saturdays. You're running a business, not burning yourself out. Set boundaries: Let clients know you're unavailable on Sundays unless it's an emergency. Protect your peace. Recap: Weekly Rhythm for a Profitable Contractor Day Primary Focus Monday: Job planning & lead follow-up Tuesday: Job costs, receipts, vendor check-ins Wednesday: On-site work & client updates Thursday: Invoicing, collections, and financial review Friday: Job wrap-up, P&L check, planning Weekend: Light admin or complete rest This weekly flow doesn't have to be perfect. The point is to build structure into your week so you're not always reacting—you're leading. Why This Works When contractors follow a simple weekly routine: Jobs run smoother Clients are happier You get paid faster You make decisions based on facts, not gut feelings You work fewer nights and weekends You don't need to be a spreadsheet wizard or tech genius. You need systems that fit your workflow and a few key habits to stay consistent. And if you need help setting that up, that's where I come in. Need Help Building a Weekly System That Works? As construction bookkeeping specialists, we help small contractors: Automate financial tasks Track job costs easily Set up smart invoicing and reminders Build habits that protect profit Let's chat and streamline your week, so you can get back to building what you love. About The Author: Norhalma Verzosa is a Certified Construction Marketing Professional and serves as the Web Administrator of Fast Easy Accounting, located in Lynnwood, WA. She holds a Bachelor's Degree in Psychology and is a Certified Internet Web Professional, with certifications in Site Development Associate, Google AdWords Search Advertising, and HubSpot Academy. She manages the entire web presence of Fast Easy Accounting using a variety of SaaS tools, including HubSpot, Teachable, Shopify, and WordPress.

This Podcast Is Episode 640, And It's About How To Build Systems That Support Your Construction Business Turning the 3 Pillars—Marketing, Accounting, and Production—Into Repeatable Routines(without adding more work) You've done the hard part—you're running a construction business, getting jobs, and turning out quality work. Perhaps you've even begun to refine your marketing, job costing, and project delivery strategies, thanks to the three pillars we've discussed: Attracting the Right Jobs, Controlling the Money, and Delivering Projects Profitably. But here's the next step that will take your business from reactive to reliable, from "just getting by" to scaling sustainably: You need systems. Not paperwork piles. Not more apps. Just smart, repeatable steps that make your business more efficient—even if you're still a one-person show. As construction bookkeeping specialists, we help contractors every day who are great at swinging hammers but are overwhelmed by admin. This post will show you how to build simple systems around your existing workflow, so you can run your business more smoothly, make better decisions, and free up your time. What Is a "System" Anyway? A system is simply a repeatable process that occurs consistently without requiring you to reinvent the wheel each time. It could be: A checklist An automation A template A recurring habit Or a combination of all of the above The goal is predictability—so your business can function smoothly whether you're at a job site or taking a day off (yes, that's allowed!). Why Small Construction Businesses Need Systems You might be thinking, "I'm not a big company—I don't need systems." But the truth is, you need them even more. Why? Because without systems: Every invoice is different Every client interaction takes extra effort You forgot to track your hours or materials You lose receipts or miss billing for change orders You're constantly reacting instead of planning The right systems save you time, reduce stress, and increase your profitability. And they don't have to be complicated. System #1: A Simple Lead-to-Job Process The Problem: You get an inquiry, scribble notes on paper, forget to follow up, or lose track of what was discussed. Sound familiar? The System: Create a basic lead intake form (Google Form, CRM tool, or paper checklist) Pre-qualify leads with a few standard questions: Project type, location, timeline, budget Save all client information in one place (e.g., Google Sheet, Notion, Trello). Use a standard estimate template so every quote includes: Scope Pricing Timeline Payment terms Send a welcome email template after a job is accepted (include next steps, policies, and what to expect) Bookkeeper's Tip: Keeping track of leads and estimates helps you compare projected vs. actual profits, so you can learn which jobs are truly worth your time. System #2: A Weekly Money Routine The Problem: You're too busy to check the books, so you don't know if you're making or losing money until tax time. The System: Set aside 30–60 minutes each week to review your finances: Reconcile transactions (or send to your bookkeeper) Check outstanding invoices Follow up on late payments Log hours worked and materials used (by job) Review your cash flow forecast for the next two weeks Even if you outsource the bookkeeping, your weekly check-in keeps you in control. Make it part of your Friday routine, just like packing up your tools. Bookkeeper's Tip: We can set up automated reports to send you a cash flow summary, job costing update, or overdue invoice list via email each week—no extra work on your end. System #3: Job Costing and Change Order Tracking The Problem: You think you're making money on jobs, but in the end, you can't say for sure, and you might've given away work for free. The System: Use a spreadsheet or job costing software (like QuickBooks Projects or Buildertrend) Track: Labor (hours × rate) Materials (receipts, delivery invoices) Subcontractors Permits, rentals, and other direct costs Add a simple change order log to each job file Description, date, price, status (pending/approved) Get approval before starting extra work   Bookkeeper's Tip: When you track jobs this way, we can help you compare estimated vs. actual costs and margins—so your future quotes get sharper and more profitable. System #4: Project Timeline & Client Communication The Problem: Clients get anxious when they don't hear from you, and scope creep happens when there's no clear plan. The System: Break each project into 3–5 major phases (demo, framing, finish work, etc.) Assign rough start/end dates Use a whiteboard, app, or calendar to stay on track Send weekly updates to clients (template email or quick text summary) "Here's what we completed this week… Here's what's next…" Bookkeeper's Tip: When jobs stay on schedule, you're more likely to invoice on time and get paid faster, which improves your cash flow. System #5: Receipts, Invoices, and Tax Readiness The Problem: You have a shoebox full of receipts and scramble to find documents when tax season rolls around. The System: Use a digital system like Dext, Hubdoc, or even a shared Dropbox folder Snap photos of receipts as you go—tag them with the project name Save estimates, signed contracts, and change orders in organized folders Send invoices promptly at milestones (use progress billing templates) Review reports monthly with your bookkeeper (Profit & Loss, Job Profitability, etc.) Bookkeeper's Tip: With clean books and digital records, tax time is painless—and you'll never miss a deduction. The Myth of "More Work" The biggest myth about systems is that they add more to your plate. In reality, they save you time and stress by preventing confusion, wasted effort, and missed revenue. Stop rewriting the same emails Stop digging for info buried in texts Stop guessing at prices or costs Stop forgetting to bill for work you did With systems in place, your business becomes predictable, profitable, and easier to manage—even as you grow. Ready to Systemize Your Construction Business? You don't have to figure this all out on your own. As construction bookkeeping specialists, we help small contractors establish and maintain systems that align with their workflow. Whether it's: Automating job costing Simplifying invoicing Organizing digital receipts Reviewing job margins Or building custom templates We'll help you take the guesswork out of your money—and give you back control of your time. Let's identify one or two areas in your business where a system could save you hours (and dollars) every week. You build homes. We'll help you build the business behind them. About The Author: Norhalma Verzosa is a Certified Construction Marketing Professional and serves as the Web Administrator of Fast Easy Accounting, located in Lynnwood, WA. She holds a Bachelor's Degree in Psychology and is a Certified Internet Web Professional, with certifications in Site Development Associate, Google AdWords Search Advertising, and HubSpot Academy. She manages the entire web presence of Fast Easy Accounting using a variety of SaaS tools, including HubSpot, Teachable, Shopify, and WordPress.

This Podcast Is Episode 639, And It's About Pillar 3: Delivering Construction Projects Profitably A Construction Bookkeeper's Guide to Smarter Production for Small Contractors You've done the hard work: marketed your services, landed the job, and priced it to make a solid profit. But here's where a lot of small construction businesses lose money—even after doing everything right up to this point.   That moment is project execution—or what we in the business world call production.   As construction bookkeeping specialists, we've seen many jobs transition from profitable to painful simply because the contractor lacked systems in place to track costs, manage scope, or control labor once the work commenced.   Let's discuss Pillar 3: Delivering Projects Profitably, and how refining your production process can safeguard your profits, enhance your reputation, and alleviate stress.    Why "Doing the Work" Isn't Enough Many contractors assume that once the job starts, the hard part is over. But production is where the majority of the risk lives: Labor costs can balloon Materials may get wasted or delayed Clients can change their minds mid-project Subcontractors may not show up when they're supposed to Scope creep can kill your margins without you realizing it From a bookkeeper's point of view, this is when the numbers begin to go awry. Profitability doesn't just come from winning jobs—it comes from controlling how they're delivered. What "Delivering Profitably" Actually Means To deliver projects profitably, you need to finish the job: On budget On schedule With the client happy enough to pay (and refer you) It's not just about good craftsmanship. It's about project management. Whether you're a solo operator or have a small team, production needs structure. Fortunately, it doesn't need to be complicated. Where Small Contractors Lose Profit During Production Before we dive into solutions, let's look at where money is most often lost on the job site: 1. Untracked Labor If you don't know how many hours you or your crew are spending on a job, you can't compare it to your estimate. It's one of the most common profit-killers we see in the books. 2. Material Overruns Materials get lost, over-ordered, or wasted—especially if you're not reconciling purchases to job estimates. 3. Unbilled Change Orders Clients often add or alter project elements. If those changes aren't documented and billed, you're giving away free work. 4. Delays and Downtime Time is money. Waiting on materials, subs, or client decisions can derail your schedule and cost you future jobs. 5. Scope Creep "Can you just add this one little thing?" becomes a margin-eating monster when not adequately managed. Now, let's talk about how to prevent those losses and protect your bottom line. 7 Ways to Deliver Projects More Profitably 1. Start with a Clear Scope and Signed Agreement It may sound simple, but many contractors begin work without a detailed, signed agreement. You need: A detailed scope of work Payment milestones A change order policy Completion criteria This sets expectations and gives you leverage when things change (and they will). 2. Create a Simple Project Timeline Even a basic calendar or whiteboard showing: Job phases Material delivery dates Key milestones can help you stay on track and manage client expectations. Suppose you're using software like Buildertrend or Jobber, great. If not, even a shared Google Sheet can work. The goal is visibility. 3. Track Labor in Real Time You can't manage what you don't measure. Use time tracking tools (like ClockShark or QuickBooks Time), or even a shared text log, to record: Who worked For how long On which part of the job This allows you (and your bookkeeper) to identify when jobs are dragging and compare actual versus estimated hours. 4. Monitor Materials Closely Set up a simple system to: Track what materials were ordered Match receipts to jobs Avoid duplicate purchases If you have frequent material overruns, your bookkeeper can help you adjust future estimates and avoid surprises. 5. Enforce a Change Order Policy This one is HUGE. Every time a client asks for something outside the original scope, pause and issue a change order. Even a one-page form signed via email or a mobile app is sufficient. Change orders should: Define the change List any added costs or time Be signed before work continues When this is routine, you stop giving away "just one more thing" for free. 6. Communicate Early and Often Most client disputes happen when they're left in the dark. Set the standard for regular updates: A weekly progress email A shared photo log A short call every Friday This maintains high trust and prevents minor issues from escalating into unpaid invoices or negative reviews. 7. Review Project Profitability After Completion After every project, sit down with your bookkeeper (or even just your notes) and ask: What was the estimated vs. actual cost? Where did we exceed our budget or deadline? Did we bill for all extras? What should we do differently next time? This post-job review turns every project into a learning tool that improves your future estimates, planning, and pricing. Where Bookkeeping Supports Better Production As your construction bookkeeping specialists, we can help you: Track job costs accurately during the project Alert you when a job is going over budget Ensure change orders are captured and billed Break down labor and materials per project Provide job-by-job profit reports In short, good production data = good financial reporting. And when we work together, we can spot patterns that help you grow smarter. The Results of Controlled Production When you focus on project delivery as intentionally as marketing and money management, you'll start to see: Jobs finishing on time Less rework and missed items Higher profit margins Happier clients (which means more referrals) Reduced stress and better control of your schedule Over time, this builds a reputation that attracts higher-quality clients, enabling you to raise your rates with confidence. Final Thoughts Build Systems, Not Just Projects You know how to build a deck, remodel a kitchen, or manage a crew. But your business needs structure, too. When you build systems around how you deliver your work, you reduce chaos and protect your profits. Pillar 3: Production isn't about doing more—it's about doing smarter. With a bit of planning, tracking, and review, you can make every job a stepping stone to a stronger, more profitable business. Want Help Tracking Job Profitability? If you're tired of guessing how much money you're really making on each job, we can help you set up: Job costing systems Labor and material tracking Change order logs Profit and loss reports per project Let's get your numbers working for you. Book a free consultation today and let's build better systems together—so you can build a better business.

This Podcast Is Episode 638, And It's About Pillar 2: Controlling The Money - Construction Accounting And Bookkeeping How Smart Money Management Keeps Your Business Profitable and Stress-Free When most small construction business owners think about success, they envision a steady stream of jobs, high-quality work, and satisfied clients. But there’s another side to the story that often gets ignored: the financial health of your business. And here’s the truth we see every day as construction bookkeeping specialists: Even skilled contractors with full calendars can run into cash flow problems, tax stress, or profit shortfalls—not because of the work, but because of the numbers. That’s where Pillar 2: Controlling the Money comes in. In this post, we’ll talk about how to take control of your finances through simple, construction-friendly accounting practices—so you can stop guessing and start growing.  Why Money Control Is the Backbone of a Construction Business In construction, money doesn’t flow evenly. You might spend thousands on materials before getting paid. You may win one big job and then go three weeks without a deposit. Labor and equipment costs can shift mid-project. It’s a juggling act. That’s why proper accounting isn’t just about keeping the IRS happy—it’s about: Knowing your job costs Pricing with confidence Keeping cash flow steady Making better business decisions Staying compliant and audit-proof If your books are messy, late, or nonexistent, you’re flying blind. However, when your numbers are precise and current, you can run your business, not just react to it. The 5 Biggest Money Mistakes We See in Construction Businesses Let’s start with the most common money-related problems we help contractors fix: 1. Bidding Without Knowing Actual Costs Many contractors “guesstimate” job prices based on experience rather than actual data. However, with inflation, labor fluctuations, and new materials, those estimates can quickly lead to underbidding and lost profits. 2. Mixing Personal and Business Finances Swiping your business card for groceries or buying tools with your debit card? That’s a fast track to messy books and missed deductions. 3. Falling Behind on Invoicing or Collections Delaying invoices or avoiding follow-ups means delayed payments—and often, unpaid work. 4. Ignoring Overhead Suppose you only account for direct costs (such as materials and labor) and overlook indirect costs, including your phone bill, fuel, insurance, and software subscriptions. In that case, you’ll never see your actual profit. 5. No Real Cash Flow Planning Not knowing how much is coming in or going out in the next 30 days can lead to bounced checks, late payments, and last-minute borrowing. Sound familiar? Let’s fix that. The 3-Part System for Controlling Your Money Here’s how we help contractors like you get your finances under control without overwhelming spreadsheets or accounting jargon: 1. Job Costing – Know What Each Project Really Costs Job costing is the process of tracking every dollar that goes into each project, including labor, materials, subs, equipment, and overhead allocation (LMOS™). Why It Matters: You’ll know which jobs are profitable—and which ones aren’t worth repeating. You’ll improve your estimates over time using real data. You’ll spot problems early (like a crew taking too long or material waste). How to Start: Use separate expense categories for each job in your accounting software (or at least use tags/notes). Track time and material costs in real-time, not weeks later. Include a portion of your overhead per job (rent, insurance, admin time, etc.). Even a basic spreadsheet is better than nothing. But ideally, use tools like QuickBooks with project tracking, or apps like Buildertrend that integrate with bookkeeping. 2. Cash Flow Management – Know What’s Coming and Going Cash flow isn’t the same as profit. You can make a $10,000 profit on paper, but still run out of cash if a client delays payment or if you pay subs too early. Why It Matters: Helps you avoid shortfalls, late payments, or needing to dip into personal funds. It makes it easier to plan purchases or hire help when you can afford to do so.   How to Start: Create a weekly cash flow forecast: List all expected income and expenses by date so that you can plan around slow weeks or high-expense periods. Require deposits and progress payments on jobs. Set up reminders for invoicing and follow-ups to ensure timely payments. A construction business with no cash cushion is one unexpected delay away from severe stress. Cash flow forecasting gives you breathing room and peace of mind. 3. Monthly Reporting – Make Decisions Based on Facts, Not Feelings Every month, you should be reviewing key reports that tell you how your business is doing, not just how you feel it’s doing. The 3 Reports You Need: Profit & Loss Statement (P&L) – Are you making money? Balance Sheet – What do you own vs. owe? Job Profitability Reports – Which jobs performed best?   These reports help you: Adjust pricing and scope when needed Spot overspending early Justify business decisions (such as hiring, purchasing equipment, or expanding) Get ready for taxes long before tax season If your current bookkeeper isn’t giving you these reports—or if you don’t understand them—it’s time for a better system. Bonus Tips for Easy Financial Control Here are a few more best practices we recommend for all small construction business owners: 1. Separate Business Accounts Use a dedicated business checking account and credit card. It simplifies tax prep, reduces errors, and keeps you audit-ready. 2. Keep Receipts and Documentation Use apps like Hubdoc, Dext, or QuickBooks Online to snap and store receipts. Label them with the project name for faster reconciliation. 3. Use Software That Fits Construction Generic accounting tools are sufficient, but platforms like QuickBooks for Contractors, Joist, or Buildertrend offer features specifically tailored to the construction industry, such as progress billing, time tracking, and job costing. 4. Work with a Specialist A bookkeeper who knows construction can save you hours of frustration—and thousands in missed tax deductions or mispriced jobs. The Bottom Line: You Can’t Grow What You Don’t Measure and What You Can Measure, You Can Manage You wouldn’t build a house without a plan. So don’t run your business without a handle on your numbers. Controlling the money through job costing, cash flow tracking, and monthly reporting allows you to: Price smarter Avoid financial surprises Protect your profit margins Make better growth decisions You don’t need to become a financial expert. You need a system that gives you visibility—and a partner who can help you stay on track. Need Help Getting Your Finances Under Control? We specialize in helping small construction business owners like you: Set up or clean up their books Track job profitability Forecast cash flow Understand their financial reports Let us know how we can help you. Book a free 30-minute consultation and take the guesswork out of your finances—so you can focus on doing great work.

This Podcast Is Episode 637, And It's About Pillar 1: Marketing - Attracting The Right Construction Jobs A Guide for Small Construction Business Owners (from Your Bookkeeper's Point of View) As construction bookkeeping specialists, we spend a significant amount of time analyzing the numbers behind small construction businesses—everything from job costs to cash flow to profit margins. However, here's the truth most contractors don't hear enough: Your profitability starts before the job even begins. Yes, it starts with the jobs you say yes to—and more importantly, the ones you should start saying no to. In this post, we'll break down what it means to attract the right jobs, how doing so can transform your business, and what practical steps you can take today to stop chasing work that doesn't serve you. First, Why Most Contractors Struggle to Attract the Right Clients Small contractors often accept every job that comes their way, especially when they're just starting or concerned about cash flow. But this creates several problems: Low-paying work that barely covers your costs Clients who delay payment or constantly push scope boundaries Traveling too far for small, unprofitable jobs A lack of consistency in your portfolio and referrals If this sounds familiar, you're not alone. But this cycle drains your energy and your bank account. And it makes your bookkeeping a mess—because when job costs are unclear or inconsistent, it's hard to see which jobs made money and which didn't. The Right Job: What Does That Actually Mean? The "right" job looks a little different for every contractor, but here's a basic framework: You're qualified and equipped to do it well You can complete it profitably (based on your costs and ideal margin) It fits within your service area It aligns with the type of work you want to be known for The client respects your time and process When all five of these boxes are checked, it becomes easier to plan, price, and deliver the work, and you'll often get paid faster and with fewer headaches. Why Your Bookkeeper Cares About the Jobs You Choose From our side of the books, here's what we see when you start attracting better jobs: Cleaner job costing data, because each project has a clear scope and budget Healthier margins, because the client isn't nickel-and-diming you Improved cash flow, because payments come in on time More predictable expenses, so budgeting and forecasting become easier That provides a solid financial foundation to build upon. So, how do we make that shift? 6 Ways to Start Attracting Better Jobs   1. Define Your Niche Clearly Clients won't know what to hire you for unless you tell them—clearly and often. Specializing doesn't limit your options; it sharpens your value. Do you focus on bathrooms, decks, additions, or full remodels? Do you serve residential, commercial, or both types of clients? Are your ideal jobs $5,000 or $50,000? Once you define your sweet spot, you can market smarter and spend less time chasing the wrong leads. 2. Price Your Work with Confidence (Not Emotion) One of the biggest mistakes we see is pricing based on "what you think the client can afford" instead of what the job costs you. That's how good contractors end up underpaid and overworked. With proper job costing and an understanding of your overhead, you can create bids that are both competitive and profitable. And here's the kicker: high-quality clients don't just want the cheapest quote—they want clarity and professionalism. Pricing with confidence attracts better clients. 3. Professional Estimates and Invoicing = Trust Want to stand out from the competition without spending a dime on ads? Use detailed, easy-to-read estimates with clear line items Include terms, timelines, and payment schedules Send professional invoices on time, every time This builds trust right away—and clients are more likely to choose you over "Chuck in a truck," who scribbles an estimate on a notepad. 4. Use Photos, Reviews, and Referrals to Tell Your Story People hire those they trust. And in construction, trust is often built through: Before-and-after photos Client testimonials Word-of-mouth referrals If you're not already collecting these, make it part of your post-job checklist. Ask happy clients for a quick review or permission to take a photo of them. Share success stories on social media and your website. Your work speaks for itself—but only if people can see it. 5. Simplify Your Online Presence You don't need a fancy website to get found—you need: A Google Business Profile (with updated contact info and service area) A few recent photos and reviews A clear description of your services This makes it easy for local clients to find and trust you. We've seen contractors double their inquiries just from a well-maintained Google listing. 6. Pre-Qualify Your Leads Your time is valuable. Before driving out for a quote, ask a few key questions: What's the project timeline? What's your rough budget? Have you worked with contractors before? Is the property ready for work to begin? These questions help you avoid tire-kickers and focus on serious leads. How Bookkeeping Supports Better Marketing Decisions Once you've improved your lead quality and project fit, your bookkeeping data becomes a valuable asset. You'll start to see: Which types of projects are your most profitable Which areas or clients tend to pay faster What marketing sources bring the best leads This allows you to double down on what works—and stop wasting time and money on what doesn't. The Payoff: Less Stress, Better Clients, Stronger Business When you start attracting the right jobs: You waste less time quoting projects that go nowhere You gain consistency in your income and schedule Your financial reports become easier to understand and use You build a brand that clients want to refer and return to It's not about doing more—it's about doing smarter. Need Help Getting Clear on Your Numbers? If you're unsure what your ideal job actually costs—or how to price it for profit—we can help. As construction bookkeeping specialists, we don't just categorize expenses; we also ensure that they are accurately recorded and accounted for. We help you understand: Job costing Profit margins Overhead Cash flow So you can build with confidence and say yes only to the jobs that grow your business, not drain it. Do you need help setting up your job costing system or reviewing your project margins? Book a free consultation, and let's ensure your books are aligned with the type of work you want to do. About The Author: Norhalma Verzosa is a Certified Construction Marketing Professional and works as the Web Admin of Fast Easy Accounting located in Lynnwood, WA. She has a Bachelor's Degree in Psychology and a Certified Internet Web Professional with a Site Development Associate, Google AdWords Search Advertising, and HubSpot Academy certifications. She manages the entire web presence of Fast Easy Accounting using a variety of SaaS tools including HubSpot, Teachable, Shopify, and WordPress.

This Podcast Is Episode 636, And It's About The Three Pillars Of A Profitable Construction Business Running a small construction business is no small feat. You're on job sites one minute, sending invoices the next, and trying to line up your next project after that. It's a constant juggling act—and without the right systems, it's easy to fall behind or burn out. As construction bookkeeping specialists, we work with small contractors who are incredibly skilled in their trade but often feel overwhelmed when it comes to running their businesses. And over the years, we've noticed a pattern: the most profitable, low-stress companies all focus on the same three areas: 1. Getting the Right Jobs (Marketing) 2. Managing the Money (Accounting) 3. Delivering Profitably (Production)   Let's break down how each of these pillars supports a stronger business—and how you can tighten them up, starting today. Pillar 1: Marketing – Attracting the Right Jobs Marketing isn't just about having a nice logo or handing out flyers; it's about creating a lasting impression. For construction businesses, effective marketing means attracting the kind of clients and projects that align with your skills, values, and profit goals. The Mistake: Chasing Every Lead Many small contractors try to say yes to every inquiry, especially when work is slow. But not all jobs are created equal. Some clients haggle, delay payments, or expect champagne results on a beer budget. Taking those jobs to stay busy can ultimately cost you money. The Fix: Focused, Consistent Outreach Start by defining: Your ideal client (residential vs commercial, budget level, style) Your best services (bathroom remodels, decks, renovations, etc.) Your service area (so you don't waste time driving) Then, build a system around that. A few simple but effective ideas: Post before/after photos on social media Ask every happy client for a review or referral Keep your Google Business Profile updated Reply to inquiries promptly with a professional estimate Believe it or not, even your invoice can be a marketing tool. Clean, well-structured paperwork signals professionalism and builds trust, making clients more likely to refer you. Pillar 2: Accounting – Controlling the Money This is the part where most contractors feel out of their depth—but it's arguably the most important. If you don't know your numbers, it's almost impossible to price accurately, manage cash flow, or plan for growth. The Mistake: Guessing at Prices and Profits Many small construction business owners rely on their gut instinct to price jobs or determine if they're making a profit. But guessing leads to underbidding, unpaid labor, or worse—projects that cost you money to finish. The Fix: Job Costing + Cash Flow Awareness At a minimum, you should know: How much does each job cost (LMOS™) How much do you need to earn per day/week to stay profitable What your cash flow looks like over the next 30–60 days This is where we provide the most assistance to contractors. With a sound bookkeeping system in place (like QuickBooks set up for construction), you can: Track expenses by project Compare estimated vs. actual costs See real-time profit/loss reports Prepare for taxes before tax season hits You'll be shocked how much easier it is to raise your rates (or say no to low-ball jobs) when the numbers back you up. Pillar 3: Production – Delivering Projects Profitably You're likely already focused on the work itself. But being great at building isn't enough—you also need to finish jobs on time, avoid scope creep, and manage subs and materials efficiently. The Mistake: Letting Projects Drift If you're not tracking timelines, labor hours, or change orders, even a small project can run away from you. That eats into your profit and frustrates clients who were expecting more transparent communication. The Fix: Simple Project Controls You don't need fancy software to keep projects on track. A few simple steps go a long way: Break the job into clear phases (and invoice accordingly) Use a whiteboard or app to track material orders and deliveries Document change orders and get them signed before moving forward Track hours worked (yours and your crew) against the budget From a bookkeeping perspective, this is a gold mine. Suppose you log labor and material costs against each job. In that case, you'll build a library of real-world data that makes your future estimates sharper and your scheduling more realistic. Your M.A.P. - How the 3 Pillars Work Together Here's the magic: these three areas aren't separate—they support each other. Marketing brings in better jobs. When you know your numbers, you can market confidently and say "no" to bad fits. Accounting keeps your pricing and cash flow in check. When you price reasonably, you can afford to deliver great work without cutting corners. Production builds your reputation and efficiency. When you finish jobs on time and budget, clients rave—and your marketing takes care of itself. It's a flywheel: each pillar makes the others stronger. Final Thoughts You don't need to be a large company to run a professional and profitable construction business. You need to build a foundation around these three pillars: Market to the right clients Know your numbers Deliver on your promises And you don't have to do it alone. As construction bookkeeping specialists, we help small contractors like you establish the systems that reduce stress, protect profits, and set you up for long-term success. Ready to Strengthen Your Foundation? Let's talk. We'll help you: Set up job costing that works Understand your cash flow and overhead Clean up your invoicing and reporting Build confidence in your numbers—so you can grow with clarity You can book a free 30-minute consultation today, and let's get your business running on all three pillars.

This Podcast Is Episode 635, And It's About The #1 Reason Contractors Lose Clients: Poor Invoicing—And How to Fix It As we celebrate Independence Day and the spirit of hard work and craftsmanship that built our country, it’s the perfect time to think about strengthening your construction business, so you have the freedom to grow and succeed. When most contractors consider why they lose clients, they often blame price competition, slow projects, or a client’s unrealistic expectations. But in my experience as a construction bookkeeper, one of the most common—and preventable—reasons contractors lose business is poor invoicing practices. I know what you might be thinking: “My craftsmanship speaks for itself; invoicing is just paperwork.” But the truth is that invoices are often the last impression you leave on a client. That impression determines whether you get paid promptly, earn a good review, or ever hear from them again. Here’s why poor invoicing costs you clients, how it damages your reputation, and exactly what you can do to fix it starting today. The Hidden Charges of Poor Invoicing Let’s unpack what “poor invoicing” looks like in the real world: Surprise Charges – Adding unexpected line items without explanation leads clients to feel blindsided. Even small uncommunicated costs, like a few extra hours of labor or a disposal fee, can make clients doubt your honesty. Late or Sporadic Invoices – Sending invoices weeks (or worse, months) after work is completed sends the message that you’re disorganized. It also forces clients to scramble their budgets, and they may start ignoring your emails altogether. Disorganized or Confusing Layouts – Handwritten invoices, crumpled paper, or Word documents with inconsistent formatting look unprofessional. They make it difficult for clients to understand what they owe and why, opening the door to disputes. Lack of Payment Terms – If your invoice doesn’t clearly state when payment is due, clients may assume there’s no urgency. This leads to late payments, awkward reminders, and unnecessary tension. No Proof of Work Completed – Many clients want to see proof that matches what they agreed to pay for, such as photos of progress, signed change orders, or milestones met. Without these, they might question the final bill. Errors and Omissions – Mistakes in calculations, missing line items, or billing for the wrong amount can destroy trust in an instant. These issues might seem small when you’re juggling multiple jobs. Still, they add up quickly and can easily cost you a client’s future business or a valuable referral. Why Invoicing is a Marketing Tool, NOT Just a Bill Invoices are more than payment requests—they’re a key part of your client experience. Every interaction you have with a client, from the first estimate to the final invoice, contributes to your reputation. Consider this: clients rarely see the hours you put in behind the scenes or the challenges you overcome to finish their project. They do see your invoices, emails, and paperwork. If your administrative side feels sloppy, clients may assume your craftsmanship is, too, even if your work is top-notch. On the other hand, precise, prompt, professional invoices can: Build trust and reinforce your professionalism Encourage faster payments, boosting cash flow Make clients more likely to refer you Lead to glowing online reviews Differentiate yourself from less organized competitors When you treat invoicing as a core part of your marketing—rather than an afterthought—you send a powerful message: you respect your client’s time, budget, and peace of mind. How to Fix Poor Invoicing Practices Here are six practical steps you can take immediately to transform your invoicing process—and your client relationships: 1. Use Construction-Specific Invoicing Tools Skip generic templates or handwritten invoices. Invest in software designed for contractors, such as QuickBooks for Contractors or Buildertrend. These tools let you: Create detailed, professional invoices Break down labor, materials, and other costs Track payments and overdue invoices Sync estimates with final invoices for seamless transitions They’re designed to handle the complexities of construction work, including progress billing and change orders. Excel works well, too, and we have free downloadable templates here. 2. Invoice Promptly and Consistently Send invoices immediately upon completing milestones or projects. Make it a routine part of your workflow—ideally within 24 hours of finishing a phase of work. Regular, timely invoicing demonstrates to clients that you’re organized and serious about your business. Pro tip: Automate invoice scheduling if your software supports it. You can set up progress invoices that are sent automatically at agreed-upon milestones. 3. Break Down the Work Clearly Your invoices should include line items that detail labor hours, materials, subcontractors, and any additional charges. Provide quantities, unit prices, and short descriptions. A transparent invoice gives clients confidence that they’re paying for precisely what they approved. For example, instead of: Labor: $5,000 Break it down as: Framing labor (40 hours @ $50/hour): $2,000 Drywall installation labor (30 hours @ $50/hour): $1,500 Finish carpentry labor (30 hours @ $50/hour): $1,500 This clarity prevents misunderstandings and reduces disputes. 4. Include Payment Terms Always include clear payment terms on your invoice, such as: Payment Due: Net 15 (15 days after invoice date) Late Fee: 1.5% per month on overdue balances Ensure that your client has agreed to these terms upfront (in your contract or proposal). Stating them clearly on the invoice eliminates confusion and provides you with a legal basis if payments are delayed. 5. Add Professional Branding Your invoice should include your company logo, consistent fonts, and professional formatting. This isn’t just about looking fancy—it reminds clients they’re working with a legitimate, established business. Include your contact information, contractor license number, and website to make it easy for clients to reach you with questions or share your info with referrals. 6. Follow Up Politely but Firmly Don’t let overdue invoices linger for weeks without action. Set reminders to follow up a few days before the due date and again shortly after if payment has not been received. Your follow-up doesn’t have to be aggressive—keep it friendly but firm. For example: Subject: Friendly Reminder: Invoice #2024-015 Due Tomorrow Hi [Client Name], Just a quick reminder that Invoice #2024-015 for your [Project Name] is due tomorrow. Please let me know if you have any questions! Thanks so much, [Your Name] Automated reminders in invoicing software can save you time and ensure consistency in your billing process. The Bottom Line: Better Invoicing Builds Your Reputation Ultimately, precise, prompt, and professional invoicing is one of the simplest and most effective ways to market your construction business. Clients who trust your paperwork are far more likely to trust your work and recommend you to others. Plus, you’ll benefit from: Improved cash flow Fewer disputes Better client relationships A stronger reputation for professionalism Next Steps: Let's Fix It Together Suppose you’re ready to stop losing clients to poor invoicing and start winning more referrals. In that case, it can help you set up a professional, efficient invoicing system tailored to your construction business. As a construction bookkeeping specialist, I know how to streamline your paperwork, allowing you to focus on what you do best: building. Wishing you a safe and joyful Fourth of July! May your holiday be filled with family, friends, and a renewed commitment to growing your business. Contact us today for a complimentary consultation, and let’s transform your invoicing into one of your most valuable marketing assets.