This three-part series on the business side of a construction business began with  How to Learn the Business Side of the Construction Business , followed by How to Understand the Business Side of the Construction Business. Today, the topic shifts from learning and understanding to mastering the business side of a construction business.   By understanding these five areas, construction business owners are better equipped to master the business side of a construction business

Adjusting the Flow For healthy and profitable construction businesses, it comes down to adjusting the flow of cash effectively. That means that construction accounting is the groundwork for establishing stability, security, and confidence for contractors.   The key to adjusting the cash flow in construction is to recognize some fundamental elements that come into play at various stages – they are:   Revenue Recognition Progress Billing Job Cost Tracking Work in Progress (WIP)

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

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

If you or someone you know has ever had a leg injury that called for the use of crutches to move about, you know how difficult and...

While WIP Report Mistakes can have to do with inaccurate data input, there are numerous higher-level mistakes to avoid. Mistakes that can...

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?...

Indeed, effort is put into creating Work in Progress (WIP) reports. There is the further effort put into maintaining them. And even more...