Introduction: Automation in accounting can be a game-changer for home builders, offering efficiency and time savings. But, like any tool, it only works when applied correctly. In this post, we’ll dive into the story of Sammy the Star and Bob the Bad Builder, two builders who had very different experiences with automation. Their stories highlight the importance of having a strong foundation before jumping into automated systems and why a balance of both manual and automated processes is essential for success.
Sammy the Star: The Power of a Strong Foundation
Sammy the Star understood that automation isn't a one-size-fits-all solution. Before implementing any automated systems, she built a solid foundation for her accounting processes. By working closely with her accountant, Sammy ensured that her processes were clear, accurate, and well-documented. She perfected her manual processes first, from job costing to payroll, before automating repetitive tasks like expense tracking, payment processing, and invoicing.
This careful approach allowed Sammy to ensure her automation ran smoothly. Automation helped streamline tasks, but she knew that certain tasks still required human judgment and oversight. Sammy's accountant reviewed her records regularly and made manual adjustments when needed, ensuring accuracy and reliability.
Bob the Bad Builder: The Dangers of Automation Without a Plan
Bob the Bad Builder, on the other hand, jumped straight into automation, hoping to cut corners. He was drawn to the allure of automation—saving time and reducing effort. Eager to make the most of modern technology, he invested in expensive software and tools without first solidifying his accounting processes.
Unfortunately, Bob didn't have a solid manual system to begin with. His automation quickly became a nightmare. With missed payments, duplicate entries, and unmatched records, Bob's system was a mess. The software couldn’t handle exceptions like custom contracts or change orders, and without a solid accounting foundation, the automation only made the errors faster and harder to fix.
Key Lessons from Sammy and Bob’s Stories:
Start with a Solid Foundation: Before automating, it’s crucial to have a well-documented, reliable manual process. Sammy’s success came from perfecting her manual systems first, while Bob’s failure resulted from skipping this vital step.
Balance Automation with Manual Oversight:Â While automation is a powerful tool, it can't replace the human judgment needed for unique situations and exceptions. Sammy used automation where it made sense, but always kept manual oversight to ensure accuracy.
Don’t Rush into Automation: Automation can be a powerful time-saver, but rushing into it without understanding your processes will only magnify existing issues. Bob’s rush to automate without a plan led to a financial disaster that was much harder to clean up.
The Importance of Planning: The key to successful automation lies in thoughtful planning and a strong foundation. Sammy's methodical approach helped her build a stronger, more efficient accounting system, while Bob learned too late that automation can't fix broken processes—it only makes them worse.
Conclusion: The story of Sammy the Star and Bob the Bad Builder offers a clear lesson for home builders: automation should never replace solid processes; it should enhance them. Start with strong manual systems, then automate tasks where appropriate. Don’t try to automate everything without a solid foundation, or you might find yourself in the same mess as Bob. Build your business on good accounting practices, and let automation be a tool for efficiency, not a shortcut to disaster.
For more insights on building a reliable accounting system for your home building business, watch our latest video where Jon Markee, your Builder CPA, dives deeper into these strategies.