Tag: Feedback Loop
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Cost Codes – Subset of Item Codes
Cost codes are unique identifiers assigned to items in an inventory sold individually or as a part of an assembly. The goal is to track the final outcome of the item(s) sold against the original estimated cost of the item.
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Business Barriers
No business is instantaneously successful. There are multiple obstacles referred to as business barriers all owners and managers have to overcome. There are three primary groups of barriers for every business out there.
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Feedback Loop in Business – Identification and Parameters
The goal of accounting is to make continuous improvements in operation by monitoring economic results over a period of time. Any changes to economic value is analyzed for impact and the source of the change. In effect, management is constantly tweaking the business to gain marginal improvements via financial results.
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Using QuickBooks in Construction Accounting
The key to the software is to properly set up QuickBooks to meet your needs. You lay out a chart of accounting accounts, buckets to dump data into, then identify your classes of work, create the nine phases of costs (QuickBooks uses item numbers) and finally identify the projects.
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The Value of a Handshake and a Smile
The number one tool for marketing is the handshake and a smile. It costs zero to extend the hand and use a few facial muscles. But the value it generates is priceless. Pretty much all business relationships begin this way. The handshake and smile is the most effective marketing tool available at all levels of business.
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Best Format for the Construction Profit and Loss Statement
As a construction company owner, you need a profit and loss statement that conveys information in a format that will identify how much you are truly making as a profit. The best format is a construction profit and loss statement identifying contract revenues, direct costs, indirect costs and the overhead expenses. This format most closely matches the…
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Use Phase Accounting in Construction – Part I
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 contractors building up to 20 houses per year.
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A Model of Excellence
By using a concept of feedback and making changes to the business operation, a model of excellence can be achieved. This model allows the contractor to not get nickeled and dimed to the point of going out of business.