bookkeeping tips by abe20


									Tony McCullers
Double-Entry Draft
January 8, 2009

Source: Chapters 6 through 9...I finished reading the book!
       Heldmann, C. (2001). Be your own house contractor: Save 25% without lifting a
hammer. 4th Edition. Storey Books: North Adams, MA.

                      Content                                            Response
   Paying the subcontractors: “Never pay a            Good quote to force myself to be stern
    sub for work not done, for work that is             when it comes to paying subs. Money
    incomplete, or for an unsatisfactory job.           should be well monitored...that is my main
    Never pay in advanced.” page 62                     purpose in contracting be
   The sub that will require the most amount           efficient with the money!
    of time on the jobsite is the carpenter.           Talking ahead of time is a good tip. Out of
    Paying the carpenter will be different from         all of the subs, the carpenter seems to be
    paying the other subcontractors because the         the one the contractor must be “on the same
    carpenter will be working throughout the            page” with. Keeping the carpenter happy is
    construction process. Workout a schedule            a must. But I have to remember that it is a
    to pay the carpenter. The carpenter and             give-and-take relationship between the
    other subs might require draws or partial           contractor and carpenter.
    payments. Work out these details before
    the subcontractor begins work. “It is
    alright to pay a draw, but never pay more
    than for work done.” page 63
   Brick masons and painter are about the             Money motivates people...I can use it to
    only other subcontractors that will require         help those slower subs or those subs who
    draws on partial work done.                         are not doing a satisfactory job.
   “I seem to be saying the only way you’ll           This is an idea I did not think about...if the
    get your sub to complete the job is if you          sub is already paid and the work he did
    owe him money.” page 63                             does not pass inspection, then it might be
   Make sure inspections by the county or city         really hard to get him back out to fix the
    are complete before payments are made.              problem.
   Once you find all of your subcontractors by
    researching their work and built a trusting        Basically this is telling me to give the subs
    relationship with them, it is now time to let       their space. I don’t have to be there for
    them work. You don’t have to monitor                every hammer swing. They are the experts.
    their every move on the job site.                   I’m just the quarterback designing the plan
    Remember they are the expert in their field.        of attack. The subs are the foot soldiers.
    “They know more about trades than you
    do, and probably, if they came to you well
    recommended, they take pride in their
    work. Let them do it!” page 64
   Build a relationship with the building
    supply companies (lumber, brick, paint,            I have already contacted several supply
    insulation, etc.).                                  companies for the cost estimates. During
   Ask for the builder’s cost (usually a              this time I have been able to talk with
    percentage cut off of the normal cost). If         several representatives and build a reliable
    you don’t ask you probably won’t get it.           relationship with them.
    Those contracting themselves are                  I’m never afraid to ask for a discount!
    contractors and deserve the builder’s price
    on the materials.
   When suppliers send bills for supplies, they
    usually give at least a 30-day term to pay        Good tips with the 2% discount and wait
    the bill without penalty. Some suppliers           on ordering until the beginning of months.
    offer a 2% discount if your bill is paid by        This ultimately will save me in the long
    the tenth of the month following the               run. What little I can save now, I will reap
    purchase.                                          the benefits during the mortgage years by
   Try not to order supplies near the end of          not having to pay interest on that money
    the month so that you will get an extra 30         for 30 years!
    days to pay for them.
   Bookkeeping Tips: Open a separate
    checking account to pay for subcontractors        I could also create a cost estimate budget
    and suppliers and create a cost estimate           on a computer spreadsheet to show the
    budget on a computer spreadsheet to show           budgeted amounts for each phase of
    the budgeted amounts for each phase of             construction. By coding the checks, I can
    construction, code each check so that you          easily input the information into the
    can deduct the amount from the budgeted            spreadsheet.
   Steps in the Building Process (page 69-87)
     1) Staking the lot and house: 1-3 hours          This section of the book is the most
     2) Clearing and excavation: 1-3 days              helpful. It simply lays out the process. I
     3) Ordering utilities, temporary electric         know that building a home is not as easy as
         service, and a portable toilet: 1 hour        following these steps in this particular
     4) Footings and First Inspection (made            order, but it is nice to see the general
         before pouring footings): 1 week              process. As the quarterback, it is important
     5) Slabs, basement, and garage: 1-2 days          for me to be aware of the whole process.
     6) Framing and drying-in: 1-3 weeks               With this skeleton, I can take a calendar
     7) Exterior siding, trim, veneers: 1-3            and estimate when to tell subcontractors I
         weeks                                         will be ready for them on the job site. I can
     8) Chimneys and roofing: 2 days-1 week            also keep up with inspection dates. Again,
     9) Rough-ins (electrical, plumbing,               organization is the key to success!
         heating and air, etc.), can be done          Note: The book takes each step and
         while steps 7 and 8 are happening: 1-2        explains the step with a little more detail.
         weeks                                         So within the skeleton, I do get a little bit
     10) Insulation: 3 days                            of substance that tells me what will
     11) Hardwood flooring and underlayment:           basically happen during that step.
         3 days-1 week
     12) Drywall: 2 weeks
     13) Priming walls and “pointing up”: 2
     14) Interior trim and cabinets: 1-2 weeks
15) Painting: 2-3 weeks
16) Other trims, such as ceramic tile and
    vinyl floors: 1 day-1 week
17) Trimming out and finishing plumbing,
    mechanical, and electrical and hooking
    up the utilities: 1-2 weeks
18) Cleanup: 2-3 days
19) Carpet and/or hardwood floor finish: 3
    days-1 week
20) Driveway (can be poured anytime after
    step 12): 1-3 days
21) Landscaping: 1-3 days                        I LOVE THIS BOOK! Without this book,
22) Final inspections, surveys, and closing       I would be lost. It is very comprehensive,
    of construction loan and interior trim:       supportive, informative, and easy to read. I
    1-3 days                                      recommend this book to anyone thinking of
23) Enjoy: a lifetime!                            contracting their own home construction!

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