Why You Need a Full-Charge Bookkeeper

Construction business owners regularly ask me what their controller’s or bookkeeper’s job description should include. They know they must be able to generate an income statement (P&L), pay the bills, prepare payroll, collect receivables and take care of other accounting tasks. But what else? 

Business owners need their accounting team to add more value than just pay the bills. They must provide regular information and timely reports to help the company make more money, stay on top of weekly job costs, develop exact labor and equipment rates, assist estimating with final project costs versus estimates, provide cash-flow projections, manage and invest cash balances, provide detailed work-in-progress (WIP) and completed progress schedules, manage the line of credit, provide the bonding company with regular reports, etc.

Most company owners and presidents learned their business skills as field supervisors, estimators or project managers. They usually don’t come from the financial side of business, so they don’t know exactly what they need from an accounting department. As owners are not bookkeepers in most cases, they require professional accounting and financial management to help the company grow and prosper. They need someone in charge of the numbers who can add value for the owner and management team, set up the company accounting systems the right way, manage the accounting workload and additional staff that may be necessary, and deliver reports and information on a timely basis without exception. Most growing construction companies need more than a general accounting person. 

Hire a Pro to Grow & Profit

Contractors often start their companies with an office manager who’s also tasked with the bookkeeping duties. When the company grows, the office manager/bookkeeper gets overwhelmed and stops being able to keep up with all the demands. Larger companies have more jobs and, therefore, more people to handle the additional invoices, payroll and job reports. As the owner realizes the office manager/bookkeeper can’t do it all, they then must decide how to handle the larger workload. 

To move to the next level, successful construction contractors need a high level of professional financial management expertise, weekly job cost labor and equipment tracking, and on-time financials, plus the added demands of insurance, banking and bonding. What they don’t need is an untrained bookkeeper who doesn’t know how to properly manage a professional construction company’s accounting operation. 

Contractors Need a Full-Charge Bookkeeper

Profitable construction companies have professional accounting departments that give the president and managers regular reports and advice to help them manage the business. At the next level, contractors require an experienced “full-charge bookkeeper” who knows construction accounting versus a more expensive controller or chief financial officer (CFO). Here are some of the key differences between these positions.

• Full-charge bookkeeper — This is a finance professional who is 100% accountable to professionally manage and implement all company accounting requirements, transactions, general ledger, income, receivables, payables, expenses, reports, workload and deadlines. They are educated in accounting, up to date on financial rules and requirements and know what construction companies need from their accounting department. Full-charge bookkeepers implement recognized best accounting practices and procedures with consistency and meet regular schedules. They can identify and solve financial problems with project invoices, contracts, change orders, timecards and approvals. They also identify overall financial trends for the company and in the industry. Full-charge bookkeepers manage financial statements, balance sheets, payroll, job costs, equipment costs and journal entries. In addition, they manage company insurance, employee benefits, up-to-date accounting software and project management integration. They also work directly with the company owners and key managers, handle all bank accounts and lines of credit, help prepare tax returns, and supervise the accounting staff and their workload.
• Controller — A controller typically manages the financial operations at larger companies that have multiple departments and accounting teams. They are managers who don’t do accounting work. They oversee their team members, who do the accounting work, advise executives on financial matters, help create company budgets and ensure the accounting functions run smoothly.
• CFO — A chief financial officer is responsible for the overall financial health of a company.

Full-Charge Bookkeeper Job Description

When posting a job description for a full-charge bookkeeper, you want your ad and internal documents to clearly state the responsibilities. Follow this guide, outlining accountability objectives, as well as weekly, monthly and yearly expectations:

100% Accountable for Results:

1. Full-charge responsibility for all company finances and accounting.  
2. Manage workflow of accounting department and delegate some tasks and activities to accounting staff and project administrators.
3. Manage, implement and maintain all aspects of accounting and financial management that effectively allow the company to profit, operate efficiently and meet goals.
4. Manage, mentor and maintain professional accounting employees who can handle accounting workload and financial requirements for a well-organized, growing company.
5. Manage, maintain and improve timely, updated, accurate and integrated accounting and financial management reports and systems:
   • WIP and completed contract schedules.
   • Income statements, overhead and budgets.
   • Balance sheet, assets, liabilities and general ledger.
   • Account payables, receivables and collections.
   • Payroll, taxes, benefits and reporting.
   • Job costs, labor and equipment costs, and job charges.
   • Updated labor, equipment and tool rates.
   • Tax preparation and reporting.
   • Implement fully integrated software.
6. Manage and monitor financial systems, policies, procedures, tracking and budgeting.
7. Coordinate and maintain effective management of legal, certified public accountant (CPA), banking, bonding, audits, insurance, benefits, retirement plans and investments.
8. Maintain a positive team environment, working relationships and communication with all employees, subcontractors, customers, etc.
9. Implement, balance and match financials, cost codes, job cost reports, timecards and estimating by using fully integrated and updated accounting and construction software.
10. Maintain continuous education laws and implement the latest Construction Financial Management Association (CFMA), CPA and generally accepted accounting principles (GAAP) standards and practices.

100% Responsible to Manage and Maintain — Weekly

1. Bank accounts, deposits, cash report, investments and credit cards.
2. Account receivable preparation, aging, invoicing, collections, lien releases and retention reports.
3. Cash flow, debt, loans and line-of-credit reports.
4. Input and process all accounts payables — labor, materials, equipment, subcontractors, suppliers and overhead.
5. Input and process payroll, taxes, benefits, certified payroll, prevailing wage reports, workers’ compensation, etc.
6. Maintain subcontractor and vendor compliance — W-9 and insurance.
7. Prepare job cost production labor and equipment scorecards.
8. Provide support and reports to construction and estimating — input and update project budgets and lien releases.
9. Hold weekly accounting meeting with president.

100% Responsible to Manage and Maintain — Monthly

1. Closeout — complete it accurately and timely on deadline.
2. Present monthly financials at management team meeting.
3. Reconcile all general ledger accounts, bank accounts, credit cards, company equipment, etc.
4. Provide month-end project job cost reports to project managers.
5. Income statement — P&L and chart of account reports:
   • Current markup and margin versus bid estimate and updated job budgets.
   • Overhead expenses and overhead markup percentage.
   • WIP schedule — WIP report including over- and under-billing adjustments to P&L. 
   • Work with project managers to complete updated job cost reports with estimated cost to complete and estimated final costs on every job.
   • Contract revenue and gross margin backlog report.
   • Self-performed labor and equipment job cost to date versus budget.
6. Balance sheet = financial statement: 
   • Current and long-term assets and liabilities, loans and line of credit.
   • Equity, return on equity (ROE), return on overhead (ROOH) and working capital.
7. Equipment — income, cost, profit, return on investment (ROI), utilization and maintenance costs.
8. Monitor and prepare city, state and federal taxes and licenses.
9. Journal entries to adjust and account for company equipment, labor burden, overhead, tools, labor, supervision, etc.
10. Manage banking and line of credit.
11. Manage company, general liability, equipment and workers’ compensation insurance.
12. Monitor liabilities, debt, bonding and banking capacity.
13. Prepare accounting for investments, 401(k), etc.

Annual Update

1. Labor costs, burden, change order rates, equipment rates and depreciation.
2. Manage CPA, banker, bonding agent and insurance broker.
3. Coordinate year-end closeout, audits and tax preparation.

Know Your Numbers

You can’t manage your construction company properly unless you understand and monitor your numbers. Being good at building projects won’t make you rich unless you charge the right price and track your results on a regular basis. To keep abreast of your company’s financial condition, numbers and results, you must hold regular financial meetings.

Investing in a professional, full-charge bookkeeper and integrated software will deliver much higher returns than buying a new truck ever will. For example, hiring a full-charge bookkeeper might cost the same as the truck — maybe $75,000 or more. But I guarantee the return will be a minimum of four times that amount if you get the right person to manage your accounting department.

If you don’t have a strong accounting team that can produce the results you need, it’s time to stop short-changing yourself, limping along and making excuses. A professional will help you manage your money, grow your top and bottom lines, and allow you to make more profitable withdrawals from your bank account.