How you handle your books can make every job site more profitable.
In the highly competitive construction industry, everyone is rightly looking for opportunities to streamline their job sites, to save on materials, and to boost efficiency. From our accounting work, however, we have seen consistent themes in construction businesses.
The focus on the jobs themselves creates blind spots in the backend of the business—in the books and in the processes—and these blind spots mean missing out on revenue. Download our new whitepaper to see what lessons we have learned from working inside of businesses like yours.
Actionable insights can give you an advantage over your competitors.
You don’t need to be an accountant to capitalize on the opportunities inside of your financial records and hiding in your data. If you ask the right questions and insist on a few key best practices, you can effectively leverage your experts. Your job sites will become more efficient. You will generate more revenue from each project. And you will have a strategic outlook that puts you ahead of your competitors. That outlook is built on:
- Using real-time reporting to compare estimated costs to actual costs
- Gathering and analyzing historical financial data to plug leaks in your business and identify new revenue opportunities
- Developing an understanding of work in process (WIP) and percentage of completion accounting
- Leveraging your improved tracking and reporting tools to streamline processes like AIA billing
Preview the whitepaper…
1. Estimated Costs vs. Actual Costs
In construction, true profitability can be difficult to determine as you process change orders, haggle to lower material costs, and execute payroll. Many construction companies and contractors, even the largest ones, don’t have a clear window into just how much of an impact the day-to-day execution of a project impacts the ending profitability.
Comparing the lump sum of expenses to the original estimates (and using the difference to determine profitability) is a dramatic oversimplification of the complexity of your work. If you are using robust accounting software and processes, you can measure your output every step of the way. Having results of the overall job at project’s end is useful, but having real-time reporting during the job is even more valuable.