Successful construction companies often have many things in common. These include tracking cash balances often, having experienced management, and comparing actual job costs to estimates. Are you following these practices?
Does your company. . .
- Have detailed knowledge of costs – Labor, fringes, material, subcontractors, insurance, overhead
- Prepare detailed estimates for jobs
- Track actual job costs against estimates
- Customer contracts and subcontracts prepared and reviewed by lawyers well qualified in contract law
- Timely financial statements prepared by competent accountants/bookkeepers
- Insurance programs developed by brokers specializing in construction insurance
- Bid on jobs only in areas of expertise
- Keep funds in the business for downturns
- Management that is experienced in services being offered
- Owners and managers that understand financial terms
- Review of financial statements on at least a monthly basis
- Stay on top of accounts receivable collections
- Track cash balances daily
- Get deposits for jobs whenever possible
- Obtain lien releases and insurance certificates from subcontractors as a matter of routine
- Tax returns filed timely – income tax, personal property tax, sales tax, payroll taxes, 1099’s
- Strong safety culture – The safety of employees is the highest priority
