It’s Not About Being Standard Many construction contractors have come to expect very little from their accounting team. Maybe they expect: Bookkeeping. Reconciling bank and credit card accounts. Financial statements at the end of the month. Those things matter, but they are not enough on their own. If a contractor is trying to grow, protect margins, manage cash, and make smart decisions, they need more than basic accounting output. They need an accounting team that actually s

What Bankers and Bonding Agents Actually Want From Your Financials Bankers and bonding agents do  want financial statements. But what they are really looking for is confidence in the numbers behind them. They want: Confidence that the numbers are clean. Confidence that the contractor understands them. Confidence that the reporting is consistent. Confidence that the story behind the numbers makes sense. And when that confidence is missing, the conversation gets uncomfortable f

Why Construction Contractors Hate Waiting for Answers  In construction, waiting is expensive. Construction contractors frequently find themselves waiting. Waiting on material.  Waiting on inspections.  Waiting on approvals.  Waiting on payments. The last thing a contractor needs is to be waiting on their accounting team. Useful construction business accounting means being available to contractors so they aren’t left waiting once again.  But waiting (even for accounting info)

The purpose of this article is to discuss construction liens (also known as mechanics' liens) and how construction accounting is a vital component in reducing the risk of not getting paid for labor or materials expended on construction projects. However, before delving into that discussion, we must first address an essential aspect of dealing with the legal side of construction liens. While, when followed correctly, lien laws create a legal claim on the property’s title, ther

Construction accounting – it’s different. Construction accounting requires a few key practices that set it apart from “regular” accounting protocol. When you understand the key practices and how to address them, you can make the transition to sustainable growth and a more profitable construction company. Here is a breakdown of what to look for.   Revenue Recognition Let’s start with this doozy. Construction contractors must track revenue and costs over extended contract perio

What you’ll find in this article is a schedule of bookkeeping tasks that successful construction contractors use to guide the financial management of their businesses. That doesn’t mean they drag out the spreadsheets and fill in the blanks at the end of the day. It does mean they have a fundamental understanding of what their accounting team is responsible for and what “next steps” must be taken. However, before we delve into the schedule, let’s take a moment to understand th

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

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

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

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

Are your accounting records haphazard or outdated? It’s more than just a hassle—it’s a liability. At The Profit Constructors, we offer a...

Have you ever thought that the employees in your construction company have different or conflicting goals? Do you ever feel the left hand...

Vision in The Construction Business – The Common Bond Historically, construction projects have served many purposes, including providing...

Training Construction Employees – Part 2   The introduction of this five-part series on training construction employees provides...

There are two sides to the accounting coin used by profitable construction contractors: Past and Future. Accounting for the Past...

So, what is a sleek construction business? It is refined, polished, streamlined, smooth, visually appealing, functional, sustainable, and...

Note: If you looked at the image at the top of this page and wondered what in the world seashells have to do with finding a mentor, read...

Construction Contractors with Class! Construction contractors with class are a cut above. By that, I mean those contractors who include...

With Christmas only a few days away and New Year celebrations following soon after, we thought it was an excellent time to offer a list...