For roofing companies, Construction Accounting serves as a trusted ally in navigating financial complexities. Job costing is critical for accurate pricing, ensuring you cover materials, labour, and overhead costs while remaining competitive. Proper pricing of materials and labour ensures profitability while revenue recognition guidelines help track income accurately. Handling deposits securely is essential, ensuring cash flow stability throughout projects.
Accurate job costing for precise pricing
Efficient material and labour pricing for profitability
Proper revenue recognition and deposit management ensure financial stability
Construction Accounting serves as a steadfast ally for roofing companies, offering tailored financial solutions to navigate the complexities of the industry with confidence and precision. From job costing to revenue recognition, our expertise spans across every facet of financial management, empowering roofing businesses to thrive in a competitive landscape while ensuring long-term profitability and success.
One of the pivotal aspects we delve into is job costing, which stands as the cornerstone of accurate pricing strategies. By meticulously evaluating materials, labour, and overhead costs, we ensure that your pricing remains competitive while covering all necessary expenses.
Ensuring profitability is a primary concern for any roofing enterprise, and proper pricing of materials and labour lies at the heart of this endeavor. Through our comprehensive analysis and industry insights, we assist roofing companies in setting prices that not only attract clients but also guarantee sustainable returns.
Moreover, adherence to revenue recognition guidelines is paramount in maintaining financial transparency and accountability. By implementing robust systems and procedures, we help roofing businesses accurately track and document income, fostering trust and credibility within the industry.
Handling deposits securely is another area where Construction Accounting excels. We understand the significance of cash flow stability throughout roofing projects and work diligently to establish reliable protocols for managing deposits. This ensures that financial resources are effectively allocated and utilized throughout the duration of each project.
An roofers set of accounts must be aligned with their revenue and expense activities. Being a subcontractor and being paid on the 20th will mean that you will need to manage your cashflow, having a clean and comparable budget and forecast will help you do this.
As with all construction accounting, when designing a set of accounts for a roofing company we need to identify the revenue streams that have direct costs associated to them. We can get this information from your quotes and past jobs. We also need to identify any other major revenue streams that we would like to identify separately.
Once we have set up your income accounts we then create the accounts for the direct costs associated with deriving revenue. This is a great way to ensures all of your business operations are individually profitable. For example, you may be adding a margin to materials, having the income and costs identifiable will allow you to check at the end of the month whether or not these margins are actually being recognised as your business goes about it's operations.
Lastly we want to ensure that no other variable costs are sitting in our overheads section and vice versa. Commonly we find that management salaries have not been pulled apart from the operating wages. This must be done to ensure a correct reading of the accounts.
This completes the top half of the income statement and the gross profit, this will give you some good insights into the company.
Different forms of profit, tracking categories, and timing are discussed below
We like to show different levels of profit, typically most statements might have net profit and profit after tax. However another good figure is you operating profit or EBITDA. This shows the companies performance before the current ownership structures costs, this can have better comparability over time as the companies capital structure changes.
Timing is the last key issue for roofers, we must do our best, sometimes creatively, to align the revenue streams with the costs otherwise we risk throwing out our gross profit. Typically what happens is a roofer would receive an invoice from their supplier but not be at a stage to invoice their client. In most cases we can get around this even if you have to create a separate expense account for these situations.
Further breakdown of the income statement can also be achieved through tracking categories, most accounting systems have this extended feature. This is not represented in the above example as it is even more company specific. We do however believe that most construction companies should be utilising this feature.