You’ve just secured the largest contract of your career but you need $150,000 upfront for materials, equipment, and labor before the first payment is released. You approach the bank with confidence: your projects are profitable, your reputation is strong, and your pipeline is full. Yet days later, you receive a denial citing “insufficient financial documentation” or “concerns about cash flow management.” In reality, the bank is not rejecting your business, they are rejecting

Your surety agent just asked for your "liquidity ratios," and you froze. You know you have a balance sheet. You think your numbers look fine. But quick ratio? Current ratio? Which one matters, and what do these numbers actually mean for your bonding capacity? Here's what just happened: Your surety is trying to answer one critical question "If this contractor's projects all go sideways tomorrow, can they cover their bills without liquidating equipment or begging for emergency

You're profitable on paper, but your bank account says otherwise, sound familiar? If you're a construction owner, general contractor, or subcontractor, you've probably experienced this frustrating disconnect. You look at your QuickBooks income statement, see a healthy profit margin, and wonder why you're still struggling to make payroll or cover material costs. The problem isn't your business, it's how your financial reports are set up. Standard QuickBooks income statements a

As a construction owner, you know the grind: you win the bid, you put in the work, and you see healthy profit margins. But have you ever felt like you’re constantly chasing money? You’re profitable on paper, yet your bank account is perpetually running on fumes. This is the Construction Cash Flow Trap , and it has sunk more profitable companies than market crashes have. The Balance Sheet is your business’s X-ray. It reveals where cash is getting trapped and where dangerous fi

As a construction business owner, you constantly navigate a brutal paradox: you need consistent cash flow to keep the lights on, but pushing clients aggressively for payment risks jeopardizing future relationships. This reality makes managing Days Sales Outstanding (DSO) the average number of days it takes to collect your invoices one of the most stressful parts of running your business. The real opportunity lies in strengthening your internal accounting system to produce a

The cash flow issues you experience after a seemingly "profitable" project are usually due to one critical mistake: incorrect pricing. The core problem is the Margin vs. Markup Trap . Many contractors confuse these two terms, leading to under pricing, especially in failing to recover vital overhead expenses . This guide clarifies the difference, defines your true overhead cost, and provides a professional, formulaic approach to ensure all costs are accurately included in you

For general contractors, managing subcontractor payments effectively is essential for maintaining healthy cash flow and strong project relationships. When you're working under AIA prime contracts while managing multiple subcontractors under AIA A401 agreements, having clear payment systems becomes critical for project success. This guide walks you through practical accounting approaches for managing subcontractor payments under AIA contracts , helping you build efficient pro

Days Sales Outstanding (DSO)  is a critical financial metric that measures how long it takes a construction company to collect payment after completing a job. High DSO means your money is stuck in receivables, which significantly impacts cash flow, a vital resource in the construction industry where every project needs consistent capital to stay on track. Reducing DSO is more than an accounting goal, it's essential for business success. By using specialized technology and ou

In the construction industry, success is often measured solely by the Profit and Loss (P&L)  statement. However, while the P&L offers a snapshot of profitability, it doesn’t tell the full story. Construction firms operate in a complex environment where cash flow, debt management, and operational efficiency are key to long-term sustainability. Without proper attention to Financial Ratios, contractors risk remaining unaware of deep-seated financial issues that could jeopardize

In the construction industry, managing project costs isn’t just about tracking materials and labor, it’s about maintaining visibility....

Days Sales Outstanding (DSO)  is a crucial financial metric measuring the average number of days it takes a construction company to...

In the construction industry, effective budgeting and forecasting are critical to the success of any project. From initial income...