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WIP Accounting – Critical and Often Misunderstood
In a study of thousands of construction company audited financial statements testing the profit projected on work in progress (WIP) reports over five years to the final reports of completed project profits, I found the average difference to be a little over 1% profit bleed. This suggests that industry-wide reported … Read the rest “WIP Accounting – Critical and Often Misunderstood”
The King of Cash
This blog is the culmination of our series on the CFO’s role in the management of construction companies. I have been attempting to lay out the “Best in Class” management practices that apply to the CFO. The feedback from the accounting profession has been overwhelmingly positive but most contractors still … Read the rest “The King of Cash”
Here We Go Again: The Perilous Post Pandemic Construction Market
As the world’s economy emerges from pandemic slumber, I’m hearing familiar rumblings from the contractors I talk to every day. Keep in mind that the construction market is not back yet.
The Chatter
- “Material inflation is killing me. The contracts I sign today will end up costing me money tomorrow.”
Best-In-Class CFO #2 – The Planning Function
Our search for “Best-in-Class” management of construction businesses has led us to the CFO’s door.
Experience completing failed projects for sureties led me into extensive research about why so many construction companies unexpectedly failed, leaving their unfinished work to the surety. The common belief in the industry was (and still … Read the rest “Best-In-Class CFO #2 – The Planning Function”
Getting the Work: The CFO’s Role
My overview of the construction industry breaks down the management function into three broad categories: 1. Getting the work 2. Doing the work 3. Accounting for the work. The Chief Financial Officer’s (CFO’s) role in “Accounting for the work” is self-evident, but his or her contribution to “Getting the work” … Read the rest “Getting the Work: The CFO’s Role”
A Deeper Dive: The Science of Accounting
Engineering is a science and contractors tend to think like scientists. Tangible, measurable metrics speak to us contractors. Opinions, feelings, and guesses get less attention. Some construction professionals think that construction industry academics like myself don’t roll up their sleeves, put on a hard hat, and get their hands dirty … Read the rest “A Deeper Dive: The Science of Accounting”
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