Tag: The Value of Cost Accounting
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Implement Cost Accounting in Construction – Processing Documents
In construction there is little respect for processing paperwork. Contractors want to build projects, not deal with how paper is managed. But to gain a true understanding of what it costs to build a project and implement cost accounting, the contractor has to process documents in a meaningful way.
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Implement Cost Accounting in Construction – Document Flow System
This is the second article in a series of articles walking the small business contractor step by step in implementing cost accounting in construction. This article focuses on designing and developing a document flow system for use in cost accounting. The next step after creating a document flow system is learning how to sort and process the…
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Implement Cost Accounting in Construction – File Structure
Taking a small construction company to the next level of financial success requires implementation of cost accounting. This article is one in a series designed to illustrate how you implement cost accounting in a small construction business. The first step in this process is design a file structure.
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Completed Contract Method of Accounting in the Construction Industry
The completed contract method of accounting recognizes revenue and the associated costs once the project is complete. This is one of the two popular accounting methods used in the construction industry. For residential contractors, the completed contract method may have a slight tax advantage by deferring revenue recognition but is generally not considered the best method of…
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Methods to Reduce Costs in New Home Construction
There are two primary methods of reducing costs of construction. The first is cost negotiation and the second is cost shifting. These two methods have several tools in each to achieve overall price reduction. The following describes each method and the respective tools within each method that you can use to achieve overall cost reduction.
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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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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.