Columns are Historically Functional
Just as you must consider the purpose, position, and size of a column in a building, you must understand the columns used in accounting to ensure your construction business remains profitable.
In construction, how much load can be carried before “buckling” depends on the column’s length, diameter, and construction material.
In accounting, how well your construction business is running can also be found in the columns. They are the tool that allows you to keep track of all transactions and sort them, so you have a comprehensive, summarized record of your business finances. These columns allow you to make better business decisions.
Rules of Debit and Credit
Debit CASH when you receive it -- Cash increases
Credit CASH when you pay it out -- Cash decreases
Debit EXPENSES when you incur them -- Expenses increase
Credit REVENUE when you earn it -- Revenue increases
At first glance, it may seem your bank doesn’t know how to use the terms debit and credit appropriately. But they do correctly use those terms; you must see their point of view. Check out the explanation in this article, to see what I mean.
Keeping the Columns Even
You know what happens when the columns in a building aren’t even. Things go awry!
The same can be said for the columns in your accounting. For instance, the debits and credits should be equal but opposite entries in your books. If a debit increases an account, then the decrease of the opposite account with a credit maintains the evenness.
No More McMansion Columns
Luckily the era of McMansions is (mostly) over. Remember, one of the easy ways to spot a McMansion was by the poor use of scale and dimension of the columns – both interior and exterior.
Sometimes it is harder to spot the column problem within your accounting system. But it can be done. And understanding accounting terms is half the battle of financial management.
That is where we come in.
The team here at The Profit Constructors is well-versed in the accounting columns’ proportion, scale, and symmetry. Working with our clients to help them make sense of accounting terms and business systems and processes are the “columns” we use to support their construction contracting businesses.
It boils down to (or builds up to) you too can become better organized and more profitable when you understand how columns support your construction business.
Want to know more?
Get in touch today to schedule a complimentary discovery session. 866-629-7735
Construction Contractors look to The Profit Constructors to provide advocacy in dealing with:
Clients and customers
Employees and subcontractors
Vendors and service providers
Governmental entities
Working with The Profit Constructors gives Construction Contractors the means to organize their operations in ways that help them:
Remain informed
Avoid hassles
Reduce risks
Be future-ready
Ready for action? Or want to know more? Get in touch today to schedule a complimentary discovery call. 866-629-7735