A single overlooked contract clause cost a mid-sized contractor $180,000 on a hospital project. The issue? No force majeure provision to address weather delays, which pushed the schedule back three months. This triggered liquidated damages that wiped out nearly the entire profit margin. This type of scenario highlights why well-negotiated contracts are essential in the construction industry, they protect your profits when unpredictable events occur, such as material price vol

One missed invoice approval. One misplaced lien waiver. One poorly documented change order. That's all it takes to turn a profitable project into a financial headache. For construction owners, general contractors, and subcontractors, the difference between project success and costly disputes often comes down to how well you manage the financial side of subcontractor relationships. Managing subcontractors effectively requires more than scheduling crews and inspecting work qual

Imagine submitting a bid for a construction project, only to realize halfway through that costs are slipping out of control and a job you thought would be profitable has turned into a financial headache. In construction, where margins are tight and prices can change quickly, this happens more often than many contractors expect. Underestimating even a little can do real damage. If you’re off by just 5 percent on a $500,000 project, that’s $25,000 gone before you start. Overest

December is approaching fast, and for construction business owners, that means year-end close is coming. While your crews rush to finish projects before the holidays, your back office faces an equally critical deadline closing your books correctly. The difference between a smooth year-end close and a chaotic one isn't just convenience. It's real money. Tax penalties, missed deductions, cash flow problems from inaccurate WIP schedules, and audit risks can cost tens of thousand

Every construction business owner has faced the moment when final job cost reports show you started with a healthy margin, only to end up with much less or even a loss. You wonder, "Where did the profit go?" In many cases, the answer lies in missed opportunities to track and manage budget variances early enough. This article shows you how to implement real-time budget vs actual analysis , catching profit leaks before they derail your margins. It reveals which cost variances

For construction contractors, the possibility of an IRS audit is a real and costly concern. This article highlights the top IRS red flags for common mistakes such as labor misclassification, revenue recognition issues, and COGS errors that can trigger audits and expose your business to scrutiny. Construction is unique. With long-term contracts, high material and labor costs, specialized accounting methods, and industry-specific regulations, it’s a prime target for IRS audits

A $2 million commercial build scheduled for six months stretches to 12. Material costs double. Subcontractors threaten liens, and the general contractor withholds payment. Meanwhile, your next three projects are left in limbo because your crew and equipment are still tied up on this nightmare job. Every day of delay burns more cash, and your profit margin shrinks with every passing week. This isn’t just about lost time, it's a full-blown cash flow crisis that’s strangling you

Last month, a subcontractor lost $87,000 because they missed a 45-day preliminary notice deadline. Despite completing all work, submitting invoices on time, and trusting the general contractor to pay, the subcontractor's lien rights were invalid when the GC went bankrupt. This scenario is all too common, one in five contractors faces payment delays exceeding 60 days. The key difference between getting paid and losing everything often comes down to understanding and properly f

A general contractor discovered $23,600 in duplicate payments over six months after a routine audit. The issue stemmed from the office manager processing paper invoices and the project manager approving emailed versions, with no system in place to detect duplicates. When refunds were requested, only three vendors agreed to return the money, resulting in a final unrecovered loss of $14,800. Industry research shows that construction companies typically make 3-5 duplicate paymen

Government construction projects offer lucrative opportunities for contractors and subcontractors across the US. But there's a critical requirement that can make or break your success: prevailing wage compliance. If you're bidding on or currently working on government-funded projects, understanding prevailing wage laws isn't optional, it's essential to your business survival. A single violation can result in back wages, penalties up to 50% of underpayments, contract terminati

Let me ask you a direct question: How much money did your company leave on the table last year because of poorly tracked change orders? If you can't answer that question with confidence, you're not alone and that's exactly the problem. Most construction companies treat change order accounting as an afterthought, a paperwork hassle to deal with "when there's time." Meanwhile, they're hemorrhaging profits on every project. Here's the reality: Change orders represent some of the

You're tracking every cost. Every invoice. Every hour worked. But when someone asks, "Are we making money on this job?" you still can't give a confident answer. The problem isn't your accounting software. QuickBooks and Sage capture everything. The problem is those transactions sit there like puzzle pieces scattered data that never becomes a clear picture of profitability. Most contractors discover they've lost money on a job weeks after it's too late to fix anything. That en

You're about to make a major equipment purchase. Your accountant mentions "Section 179" and "bonus depreciation." You nod along, but honestly, you have no idea which saves you more money. Here's what makes this decision even more important now: Recent tax legislation doubled Section 179 limits and permanently restored 100% bonus depreciation. This is the most contractor-friendly equipment depreciation landscape in modern history. Let's break down Section 179 vs. bonus depre

The clock is ticking, and December 31st is quickly approaching. This isn’t just any end-of-year deadline, it’s the hard cutoff for making crucial tax moves that could save your construction company thousands of dollars. This year, the stakes are even higher. Recent changes to tax laws have dramatically altered the landscape of equipment depreciation, creating an unprecedented opportunity for contractors to maximize their savings. The adjustments to tax codes mean that contrac

You've built a profitable construction business with steady projects and a solid reputation. But when you apply for a business loan or line of credit, the bank turns you down or offers terms that don't make sense. "Your financials don't support this loan amount." It's frustrating because you know your business is strong. The problem isn't your business, it's that banks evaluate construction companies differently than other industries. The project-based nature of construction,

It's late November 2025. You're pricing a commercial renovation project breaking ground in March 2026. You pull up your estimating spreadsheet, the same one you've used all year and start plugging in costs. But here's the dangerous question: Are those numbers still accurate? If you're bidding 2026 projects using mid-2025 cost data, you're gambling with your margins. Material prices have shifted. Labor markets have changed. Hidden costs like insurance and fuel have crept upwar

You've just completed a $500,000 project. The work is excellent, the client is happy, and your crew has moved on. But there's one problem: $25,000 to $50,000 of your money is sitting in someone else's bank account for the next 30 to 90 days or longer. Welcome to construction retainage, where owners and GCs hold back 5-10% of your payment "just in case" there are issues. Meanwhile, you've already paid your suppliers, met payroll, and covered equipment costs. That retained mone

Winter hits construction companies like a sudden frost projects slow down, payment cycles stretch longer, and your cash flow can freeze up faster than a job site water line. If you're a construction owner, general contractor, or subcontractor in the US, you know the drill: November through February can make or break your entire year. The reality is harsh. Construction activity can drop by 30-50% during winter months in many regions, yet your fixed costs insurance, equipment p