“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

We’re exploring the difference between being profitable on paper and having cash available. It’s About Those Apples Do you remember those long-ago lessons concerning addition and subtraction where you were told you had ten apples and asked if you gave four apples to your friend, how many would still be in your possession? Recall it was about the plus (+) or the minus (-) and the equals (=).  In today’s lesson, boys and girls, the question is, “If you have ten apples and promi

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

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

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...

The following information is based strictly on the Percentage of Completion type of WIP Reporting, which we suggest as the best practice...

WIP Reports -- A Powerful Tool in Your Financial Toolkit The question we answered in an article titled Is a WIP Report Worth the Effort?...

Supply chain problems, supply chain disruptions, supply chain issues! It’s everywhere. Neither you nor our firm can fix a worldwide...

The first part of this four-part series laid the foundation concerning cash flow . The second part discussed essential components of cash...

Managing cash flow in a trade contractor business isn’t just about numbers—it’s about timing, strategy, and sometimes a bit of patience....

Financial Clarity for Construction Business Owners If you’re watching your dollars drift away, unsure of how they became untethered or...

Organized Accounting in Construction – Cash Flow Have you ever wondered why some construction companies struggle with low cash flow?...

Understanding your construction company’s cash flow is crucial to making sound business decisions. For example, when you know your...