Recent Articles

Construction Contract

A formal agreement identifying the terms and understanding between the parties involved. Most commonly used in custom made home construction.

Job Cost Reports – Balance Sheet Set

06/15/2015

Construction accounting uses job cost reports to inform management of progress and existing issues with projects.  There are several different sets of reports.  The balance sheet set functions as an overall financial picture for the company.  The [...]

Margins in Construction

05/06/2015

I’ve been asked to identify the average margins in the construction industry.  Honestly, there is no such thing.   I tried and after several hours of research I couldn’t even get one of the types of contractors to have consistency in their [...]

Construction Draw Schedule – Ranch Model Home

05/07/2013

This is a basic draw schedule explanation for an A-frame ranch model home.  This article details the draw schedule format illustrated below.  It details the approximate percentages for the respective phases of construction and explains how the [...]

Methods to Reduce Costs in New Home Construction

01/30/2013

This article describes methods to reduce the overall cost of construction for a new home.  The new home construction industry has been hit hard by the devaluing of real estate during the four year period of 2008 to 2012.  There is no reliable [...]

What is a ‘Spec’ House?

01/24/2013

When a builder constructs a house without a contract, it is known as a spec house or a speculation home.  There are several advantages to the builder to build a spec house including timing, financial gains and workforce retention.  There are [...]

Construction Draw Schedule

01/22/2013

A construction draw schedule is a financial tool used by contractors in identifying percentage of completion points in the project for the bank to advance proceeds to the contractor. The construction draw schedule is instrumental in keeping the [...]

Use Phase Accounting in Construction – Part II (Trades)

12/21/2012

The most effective form of a financial feedback loop in residential construction is phase accounting.  Phase accounting is a subset of cost accounting and generates accurate information in the world of new home and residential additions for small [...]
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