Last quarter, a Phoenix GC completed a $1.8M renovation with 8.5% gross margin all direct costs controlled, client paid in full. Three months later: $68,000 loss. The culprit? Overhead spiked 340% during mobilization and closeout while everyone focused on "visible" costs. The PM burned 140 hours post-revenue managing punch lists. Retention sat uncollected for 73 days while overhead kept running. Overhead costs are construction's silent profit killers.  Most contractors track

In the construction industry, accurately managing expenses is crucial to maintaining profitability. One key metric that contractors must master is the overhead recovery rate, which helps allocate indirect expenses across projects to ensure proper cost recovery and pricing decisions. In this article, we will explain what the overhead recovery rate is, how to calculate it, and why getting it right is critical for business success. We'll also look at typical contractor question

Mastering Construction Cost Accounting is essential for any construction business aiming to remain competitive and profitable. Effective...

Overhead expenditures are a major component of any construction project. Whether you're an experienced contractor or a small business...

Building projects are complicated and have a lot of changing parts. Keeping track of the building budget is one of the hardest things for...

Maintaining control of spending is absolutely vital while running a building company. Many builders concentrate on direct expenses, such...

Have you ever wondered why your projects sometimes go over budget despite careful planning? The answer often lies in ineffective overhead allocation in cost accounting. Whether you're a small business owner or a project manager, mastering the overhead allocation process is crucial to achieving accurate project estimates and maintaining healthy cash flow. This article will demystify overhead allocation, explain its importance in cost accounting, and offer practical tips to op

Understanding overhead cost calculation  is essential for contractors aiming to manage costs and maximize profits. Direct costs, like...

A commercial contractor in Arizona recently discovered three months into a $1.8 million project that his budget was off by $127,000. The culprit? Underestimated labor costs, untracked material price increases, and change orders that were approved but never integrated into the budget. This isn't rare. It's happening across construction sites nationwide, and it's why mastering construction budgeting has become one of the most critical skills for contractors in 2025. Creating

Construction overhead expenses  are one of the most important but often forgotten parts of managing money in the construction business....

In the world of construction, managing finances effectively can be the difference between a successful project and one that wastes your...

In the construction industry, overhead costs  can significantly impact a project’s profitability and overall financial health....