Construction Accounting Best Practices – Measuring Financials Accurately

Construction Accounting Best Practices

When you’re concerned about construction accounting best practices, it boils down to knowing how and why this issue matters. 

In a recent social post concerning a Fun Fact in the construction industry, we mentioned the Strat. This is what we said, “There is a kink in one leg of The Strat, a “towering” hotel and casino located in Las Vegas, Nevada. One reason we know is because we’ve looked at it. Another reason we know is that our founder, Tonya Schulte, worked in the accounting department of a concrete company that was called in to help complete the problem-riddled construction of what was, at that time, owned by Bob Stupak and called The Stratosphere.” 

Thinking about the construction “problem” and the eventual “fix” of the Strat reminded our founder, Tonya Schulte, of something in the accounting sphere. It was all about accurately measuring financials and applying construction accounting best practices. 

Here, I’ll let her tell you. 

When One Leg Is Off, Everything Starts to Twist by Tonya Schulte

There’s a story that’s been passed around job sites for years about the construction of the Stratosphere Tower.

Not the kind of story you’ll find in a textbook.

The kind you hear from someone who was close enough to know how things really unfolded.

At one point during construction, something didn’t feel right.

The structure—massive, vertical, engineered to stand perfectly straight—started to twist.

Not dramatically.

Not in a way that stopped everything immediately.

But enough that the people paying attention knew… this wasn’t how it was supposed to behave.

When you’re building something that tall, there isn’t room for “close enough.”

Everything has to be aligned. Every leg. Every measurement.

This One Always Stuck With Me

I went to work in 1998 for a concrete company that had gotten involved after the incident.

We did a lot of work for the major general contractor that took over after things went sideways, so this wasn’t some distant story to the people in that office—it was something that had directly impacted the work they were doing.

And the explanation I heard over and over again was simple:

• Two of the three legs had been plumbed correctly.

• The third hadn’t.

• No one said it like it was some big, dramatic failure.

• It was talked about like it was just… something that got missed.

• Or at least, it wasn’t measured with the same level of consistency.

And that’s the part that stuck with me.

Because it wasn’t about effort.

It wasn’t about intelligence.

It was about alignment.

It Doesn’t Break All at Once

It didn’t fail immediately.

Work kept going.

Progress kept happening.

From the outside, it probably still looked like everything was fine.

But underneath, something was off.

And when something that foundational is off, the problem doesn’t stay contained.

It spreads.

This Is Exactly How Financial Problems Show Up

Most construction business owners don’t wake up one day to find everything broken.

It’s much quieter than that.

It looks like:

• A job that felt profitable… but somehow wasn’t

• A schedule that’s full… but cash still feels tight

• Reports that say one thing… and your gut says another

• Decisions being made… without full confidence behind them

Nothing looks like a disaster.

But something doesn’t feel right.

That’s the twist.

The Real Issue Isn’t the Numbers—It’s What They’re Telling You

What we see over and over again is this:

You’re not missing information.

You’re working off measurements that aren’t aligned with reality.

So:

• You think you’ve made more on a job than you actually have

• You think you’re ahead because you’ve billed

• You think things are fine because work is still moving

But the way progress is measured doesn’t align with what’s actually happening in the field.

And that gap?

That’s where the problems live.

By the Time You Feel It, It’s Already Been There

Just like that tower…

The issue doesn’t show up the moment something goes off.

It shows up later:

• When the job closes, and the profit isn’t there

• When cash gets tight, and you can’t quite explain why

• When someone asks a question, your reports should answer—but don’t

And now you’re reacting to something that’s been building for months.

What You Actually Need

You don’t need more reports.

You don’t need more data.

You need to know that what you’re measuring is true, as found in construction accounting best practices. 

You need to know that:

• The way you track your jobs reflects what’s really happening

• The way you look at progress lines up with reality

• And when something starts to go off… you can see it early

Because when everything is measured correctly…

• You don’t have to guess.

• You don’t have to hope.

• You don’t have to wait until the end to find out.

Why This Matters

We know you don’t want surprises at the end of a job.

You want to know now—while you still have time to do something about it.

That’s why we focus on getting the measurements right first.

Because when the structure underneath your business is aligned…

Everything else stands the way it’s supposed to.

Lesson learned: It is about construction accounting best practices.  If you aren't measuring your financials accurately, you could be headed for a catastrophic collapse.

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