There are numerous types of IRS Form 1099. This article will focus on the 1099-NEC because it is the most commonly used form in the construction industry. While many aspects remain the same when using the IRS Form 1099-NEC, a change will affect reporting for the 2026 tax year. It is essential to note that for the 2025 tax year, construction businesses must still issue Form 1099-NEC under the old reporting standards, which is due by February 2, 2026.   Here are a few things th

Putting Strategy in Its Place The strategy involved in planning begins with an understanding of how to reach goals.  The goal  is the main “big thing” you want to accomplish.  A strategy  is the path you take to achieve a goal.  Built into your strategy will be objectives .  The tactics  you use to reach each objective are the tools that make it happen. Example: Planned Weight Loss Think of it this way. Say your goal is to lose weight. Goal:  Lose 20 pounds in 4 months Strate

We asked Brian Harding, a leading authority on developing high-performing teams, to share with our construction contracting clients and other readers about planning for proactive problem-solving year-round. He offers excellent advice that may come as a surprise. Here is what he had to say.   It’s that time of year! With the holidays also comes the time when we plan for next year. Before going too far down the planning path, I think it’s worth asking, “Why do we typically make

Minding Your Money Tree When money trees are small, they are easy to care for with a watering can. As they mature, it will be easier to use a garden hose. Then comes the time when watering the money tree requires a full-blown irrigation system that accounts for correct timing, accurate measurements, and appropriate filtering mechanisms.  The same is true for many whose “money tree” is the construction business they own. They typically start out small, watering by hand, and th

“Overhead schmoverhead! Who cares?” Your profits  care.  Your cash flow  cares. And if you want to stay in business long-term, you   should too . Most contractors understand what profit is and why cash flow matters. However, the critical junction of the two often gets overlooked: your overhead and how you allocate it when pricing jobs. Overhead isn’t just a number your accounting professional tracks. It’s a real cash eater  if it’s not adequately accounted for—and it directly

The Bridge You can walk onto several construction job sites and find a few tools that serve multiple purposes. For instance, a power drill   can be used for drilling holes, and by changing the bit, it can also be used to tighten or loosen screws. Similarly, a pipe wrench can be adjusted to various sizes, and a circular saw performs different tasks with a blade change. In each case, the tool is the bridge. Same tool, different uses. In construction accounting, the tool known a

Weak cash management habits can push subcontractors into risky financing. Yet, healthy reserves allow construction contractors to regain control of their cash flow management.  So, the big question is – how do construction contractors get to the point of having a healthy reserve when, by gosh and by golly, they have to borrow money to meet payroll, or pay the taxes, or purchase the equipment, or – you name it – spend money? They use a cash management tool, of course!  And I w

The use of WIP reports for construction contractors is much like that of a lighthouse for guiding ships. The National Oceanic and Atmospheric Administration (NOAA) has this to say about lighthouses: “The messages of these long-trusted aids to navigation are simple: either STAY AWAY, DANGER, BEWARE! or COME THIS WAY!”  For construction contractors, percentage of completion WIP reports act like a lighthouse and reveal much concerning what’s ahead. By paying attention to the si

Debt Feels Like an Easy Solution – But It’s Not! Got a cut on your hand? Clean it up, put on a bandage, and go about your day. But...

Before we proceed, let’s define risk mitigation. Note that it  is NOT the same as risk elimination. Risk mitigation : the process of...

Let’s break it down. Using your noodle  means using your intelligence, brainpower, and thinking ability. Using your books  means using...

Labor Burden Belongs Factual labor burden should be included in creating estimates because it affects how your construction business...

You, your construction company, and how you do business are all different from your fellow contractors. That’s because you (and your...

Figuring out what an employee costs means paying attention to all the price tags accompanying his or her base wage or salary. Those tags...

The Hidden Costs of Labor: Building a Better Labor Burden Most construction contractors underestimate labor burden because they don’t...

Choose a Viable Business Model Whether you choose to be a general contractor, a specialized subcontractor, or a production provider (such...

When subcontractors find that pieces of the money puzzle are missing, it could be because they are pricing the same way their GC prices,...

In our last post concerning Margin vs. Markup , we told you that we would “show you how to convert markup to margin so you can price your...

This vs. That Because you’re in construction, you know the difference between certain things that many others often get confused about....

Just as a good set of binoculars allowed the leaders of pioneer groups to see what they were moving toward, what was on the horizon, and...