A general contractor three weeks into excavation discovers unstable soil conditions. The property owner verbally approves additional foundation work $15,000 for the scope change. Six months later, that construction change order becomes a $45,000 payment dispute. Meanwhile, cash flow suffers, subcontractors threaten liens, and the line of credit reaches its limit. This scenario affects over 70% of construction companies experiencing cash flow disruptions from change order dela

Cash flow problems kill more construction businesses than bad bids ever will. The difference between waiting 90 days for payment and getting paid every two weeks isn't just convenience, it's the margin between making payroll or laying off your crew. Your billing structure determines whether you're funding your client's project with your own money or maintaining healthy cash reserves throughout the job. Table of Content: Why Your Billing Structure Matters More Than You Think W

A contractor called us last month about a confusing problem. His WIP report showed his commercial renovation at 22% profit $74,000 in the green. But he'd maxed out his credit line and couldn't pay his concrete supplier. We found $68,000 in July costs that wouldn't hit his books until September. His plumber had worked three weeks but hadn't invoiced. Materials sat in "uninvoiced receipts" because his supplier batched invoices monthly. His WIP showed profit that didn't exist.

Picture this: You've just completed a $500,000 construction project. The work is done, your crew has moved on, but you've only received $450,000. Where's the other $50,000? It's sitting in retention and if you're not tracking it properly, you might never see it. For construction owners, general contractors, and subcontractors working with AIA contracts, retention isn't just a line item on payment applications. It's working capital that's temporarily out of reach, and in today

Cash Flow  is the lifeblood of any construction business. Even the most profitable projects can face crippling financial constraints if cash is not properly managed. The biggest challenge often isn’t generating revenue but keeping working capital flowing. Long payment cycles from clients, coupled with inefficient internal processes, can quickly choke your liquidity and stall growth. But what if we told you that Accounts Payable (Construction AP) the routine task of paying bi

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

In the fast paced construction industry, managing Accounts Payable (AP) efficiently is crucial for maintaining strong supplier...

As a construction business owner, you’ve likely faced questions like, “Why does it feel like I’m always running out of cash despite...

Securing construction bonding  is a crucial step for contractors, especially in public works projects. But several financial issues can...

Ensuring timely payments in construction projects can be challenging. Late payments can hurt cash flow, slow down project progress, and...

In the world of bookkeeping and accounting, understanding various financial metrics is crucial for maintaining the financial health of a business. The Accounts Receivable Turnover Ratio  and Days Sales Outstanding Ratio (DSO) are two of the most important measures for figuring out how well a business handles its receivables. These two terms may sound alike, but they mean different things when it comes to a business's cash flow and working efficiency. This article will dive in

Running a construction business is no small feat. From managing projects and teams to navigating supply chains and client relationships,...