Master Accounting Basics: Contractor Edition
Master Accounting Basics's Instructor Randal DeHart about the course, his transition from contracting to accounting, his thoughts on what to focus on in your business, and more. Here's what he had to say:
Master Accounting Basics: Contractor Edition premium online course begins on April 23rd! We asked Master Accounting Basics’s Instructor Randal DeHart about the course, his transition from contracting to accounting, his thoughts on what to focus on in your business, and more. Here’s what he had to say:
I understand you started as a contractor? How did you come to accounting?
I was fortunate to have been raised in a construction family. My stepfather owned and operated a Landscape Firm in Seattle Washington and I helped after school from sixth grade until shortly after graduating high school in 1972.
After high school, I decided construction was not the path I wanted to pursue, so I went to Central Washington University and majored in accounting and married my high school sweetheart, Sharie in 1973, we will celebrate 45 years in 2018.
After University, I had a change of heart and decided to go back into construction, and that is when Sharie and I started a small residential remodel construction company and handyman business.
I could perform most construction tasks; however, plumbing was not one of them, and when we hired a Plumbing Contractor I became fascinated with their skill and their craft.
I served an apprenticeship in plumbing while operating our contracting and handyman business on the side and 1981 passed the Washington State Journeyman Plumber Exam and became a Master Plumber.
Shortly after that Sharie and I expanded our contracting company, failed miserably several times and finally after much trial, error, seminars, thousands of books, tapes, and mentoring and by 1991 we figured out how to run construction companies including a plumbing firm with a new construction division and a service and repair division.
Then we changed our focus from P.A.M. To M.A.P, Early-To-Bed Early-To-Rise know your numbers and advertise. Everything changed; it was like turning on a money faucet.
It is not enough to work night and day, rely on the kindness of others to market your construction company and ignore what your financial statements. The key is to focus on M.A.P. = Marketing First, Accounting Second, Production Third.
When did you start your construction accounting business?
In 1991 we were using a very expensive DOS based Construction Accounting program, $60,000 base fee plus $600 a month maintenance fee.
That year I visited a local software store and found a brand-new program just released called QuickBooks For DOS. I took a copy off the shelf, looked at, read the text on the box, and told the clerk it was junk and they should not be selling it!
He knew me well because I had purchased many software programs. With a straight face, he said the only reason I would not buy it and give it a try was either I was stupid, or I did not have the money, and he said I know you have the money.
I bought it, took it to our office, loaded it onto a new workstation and for 90 days I ran dual books. One set of the expensive software and one on QuickBooks DOS. At the end of 90 days, we transferred all the opening balances to QuickBooks DOS.
At that moment I saw another opportunity. Most contractors and outsourced bookkeepers were still doing bookkeeping and accounting by hand. We opened a small division offering Outsourced Construction Accounting.
How will the information in this class help participants when they prepare their taxes next year?
If they setup QuickBooks with the 5 KPI’s this class is focused on teaching, their accounting system should be cleaner and more organized. As a result, whoever prepares their taxes next year should save time, and the contractor should pay less in Income Tax.
Please note, this class will cover only a fraction of Construction Accounting. The more a contractor’s accounting system is set up and maintained to Construction Accounting standards the more net profit their company can generate.
The good news is they can have more money in hip-national-bank or preferably in long-term investments. The bad news is they will pay more income tax due to increased profits. Overall an excellent problem to have.
Do you still find opportunities to do a little construction work for yourself or others?
Sharie and I buy small commercial buildings and other investment properties, update them and keep them in inventory or sell them for a profit. Occasionally I do help one of our contractor clients by trading breakfast or lunch to work on a job site. I am not as young as I once was or as fast as I once was. It is great to put on the tool belt and do a bit of plumbing, framing, drywall or even be a laborer for a while.
Join Randal and unlock the door to developing a highly profitable contracting business with the Five Key Performance Indicators you’ll learn in the Master Accounting Basics: Contractor Edition premium online course.