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  • Writer's pictureYvonne Root

A Guide to Auditing Expenses in Your Construction Business or Who Ordered This Doll Anyway?

Updated: Feb 28

It was bound to happen. When the tech-savvy 5-year-old watched Mommy go online, order items, and retrieve them from the front porch in a day or two, she decided to get in on the action.


Sure enough, one day, the doll that had been admired online showed up at the front door. It seems the 5-year-old understood the ordering portion but didn’t quite understand the paying part of the process. She wasn’t trying to defraud anyone. When questioned, she readily admitted that she had pushed the button that caused the doll to be shipped to her address.


Her wise mom, Tonya Schulte, the owner of The Profit Constructors, explained why 5-year-old children aren’t allowed to push certain buttons, and then Mom returned the doll to the shipper.


While the evidence was quite clear in the case of the button-pushing 5-year-old, sometimes it takes a bit more digging.


Bring Out Your Inner Detective

Rather than adopting a negative feeling from the word audit, make the experience palatable (perhaps even enjoyable) by bringing out your inner detective. Then, set your path for finding the evidence and solving the problem.


Here are six traits you can use when letting your inner detective discover the inner workings of your construction company’s financials.   

  1. Curiosity – Like Nancy Drew and the Hardy Boys, curiosity is the beginning of the adventure.

  2. Persistence – Hieronymus “Harry” Bosch displays unflagging persistence in his pursuits.

  3. Observation – Sherlock Holmes, of course!

  4. Attentiveness – Kinsey Millhone may get into sticky situations, but she is attentive to her surroundings, including using notes to review her findings. 

  5. Truthfulness – In the words of Dragnet’s Joe Friday, “Just the facts, Ma’am.”

  6. Consistency – Auguste Dupin, Edgar Allan Poe’s protagonist in Murders in the Rue Morgue and The Mystery of Marie Roget, uses logical deduction in an organized way that follows a consistent process.  


Auditing Expenses in Your Construction Business  

I asked Leslie King, the Quality Assurance Manager at The Profit Constructors, to give me the low-down concerning five different categories of expenses that must be internally audited regularly by construction business owners or managers.  


Then, I turned to the other team members and asked more questions, things like:

  • Is part of what we provide for clients an ongoing (quiet) auditing process?

  • What red flags are we looking for?

  • How do we alert our clients to discrepancies, fraud, or simple ignorance of what is required?


What came from my questions turned into this 4-part series of posts concerning the internal auditing of expenses for construction contractors. The categories of expenses that will be covered are:

  • Employee Expenses

  • Insurance Policies

  • Unused Recurring Charges

  • Overly Expensive Corporate Service Plans

  • Other Expenses


Internal Audits

Before going into the individual categories, noting what will be covered is essential. The purpose of the series is to give you information concerning internal audits. We’re not talking about external audits – although performing internal audits will significantly enhance your ability to survive external audits.


Internal audits aim to measure current performance, understand the situation, and determine what is working well and what can be improved. For example, in an internal audit of employee expense reports, you audit by reviewing expense items and accepting, correcting, or rejecting the expense report.


External audits target the aspect of proving the accuracy, authenticity, and integrity of financial statements. In an external audit, the question revolves solely around the proof of each item listed.


What to Expect in This Auditing Series

In the second part of this series, the topic is Auditing Employee Expenses. The third segment covers Auditing Insurance Policies. The fourth and final portion deals with Auditing Unused Recurring Charges, Overly Expensive Corporate Service Plans, and Other Expenses.



Ambitious Construction Contractors look to The Profit Constructors to provide advocacy in dealing with:


  • Clients and customers

  • Employees and subcontractors

  • Vendors and service providers

  • Governmental entities


Working with The Profit Constructors gives Construction Contractors the means to organize their operations in ways that help them:


  • Remain informed

  • Avoid hassles

  • Reduce risks

  • Be future-ready


Ready for action? Or want to know more? Get in touch today to schedule a complimentary discovery call. 866-629-7735


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