By Claudia Amand
Contractor cash flow is different than that in many other types of businesses. Contractors are constantly on the go, and they hardly ever complete work from an office desk. Whether they’re buying supplies or sending out an invoice for a completed project, transactions happen quickly.
Effective money management is essential, especially when it comes to receiving accurate reimbursements and maximizing tax deductions. But keeping up with important documents like receipts when you’re constantly on the move can be tough.
“We are always moving around, and I don’t have time to file things and keep things organized,” says James Bulbrook, a construction contractor in North Carolina with over eight years of experience in the trade.
The Need for Mobility
Bulbrook says that because contractor cash flow is so important, financial solutions need to be mobile so that cash flow statements can be seen from anywhere at any time, not at the office a week after a major transaction occurs.
“We have invoices come in like any business, but we’ll have huge checks coming in at once, like a $40,000 lumber bill,” adds Bulbrook. “We’re buying supplies left and right so we need to have finances updated quickly to avoid bounced checks.”
One helpful strategy Bulbrook recommends to help contractor cash flow is to snap a photo of a receipt immediately after purchasing something, rather than organizing everything all at once.
“What I used to do was save all of my receipts after a week or so, then snap a photo and email all of it to myself. After that, I’d save it into an inbox, and when I got to my desk I would file it to my QuickBooks,” says Bulbrook.
Doing It Right Now
But he goes on to explain that this method would lead to piles of paperwork, so now he snaps a photo of the receipt immediately after purchasing something, and enters the data using a mobile device after sending the receipt image to himself. “It’s all pretty quick now. The best way to do it is right when you’re checking out. Even if you’re in a rush, it’s better to just do it then and there.”
For Bulbrook, when you’re spending a couple hundred dollars a day on supplies and work-related expenses, having complete oversight of receipts and cash flow is absolutely necessary.
“I enjoy doing the bookkeeping myself, because I get to know my own business financially. I want to know where my money is and where I’m getting it,” Bulbrook says. “I research how it’s done, and I do it completely organized since the receipts I upload are automatically placed in an IRS category.”
For contractors, it’s crucial to be efficient on site and on the move, since days spent in the office are days they aren’t making any money. Finding mobile solutions to manage paperwork and track expenses allows contractors to focus on doing good work and growing their businesses.
[otw_shortcode_divider margin_top_bottom=”30″ text=”About The Author” text_position=”otw-text-left”][/otw_shortcode_divider]
Claudia Amand works for Shoeboxed, a receipt-tracking and expense management company based out of Durham, NC. Shoeboxed scans and organizes receipts, bills and other financial documents for independent contractors and small business owners so their accounting is streamlined, their bookkeeping is automated and their taxes are simplified.