The construction industry is a high-risk industry both financially and operationally. The cost and profitability of a project are estimated based on architectural plans and projects are often built during changing economic conditions.
In many instances, the design of a project changes after the project starts. In addition to the inherent financial risks, there are many operational risks, including the degree of productivity relative to the productivity anticipated in the cost estimate, and ensuring that the contractors building the jobs perform the work according to the highest safety standards.
Many construction owners and managers focus on billings and collections and have a “gut feel” for how the business is doing. However, they often do not know whether their individual projects are performing profitably or according to budgets. There is an old adage in the industry that says, “If you want to know how the project is doing, we’ll tell you when we are finished.”
Our construction professionals will enable construction owners and managers to see how their jobs are doing during the project and will forecast how the jobs will do at completion versus the budget. You will be able to see profits based on the percentage of completion, billings, and collections, the status of change orders, anticipated cash flows and expected earnings. As such, management will be able to modify plans and adjust to changing business conditions before it is too late.
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Balance Sheet |
Profit & Loss Statement (P&L) |
Cash Flow Forecast |
Annual Budget and Financial Business Plan |
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Earnings Forecast |
General & Administrative (G&A) Expenses Vs. Budget |
Accounts Payable Aging |
Accounts Receivable Aging |
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Debt Covenant Compliance |
Gain/Fade Analysis (Comparison of profit margins from period to period) |
Development and analysis of KPIs (Key Performance Indicators) |
Evaluation of Internal Controls and Development of Standard Operating Procedures (SOPs) |
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Comparison of actual results to the business plan |
Other Ad Hoc Reports requested by management |
Additional Services CFO Strategies Provides
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Work with lenders to obtain lines of credit |
Work together with outside 3rd parties (CPAs, Insurance, Regulators, auditors) |
Assist in recruiting and training staff |
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Serve as a trusted business advisor |
One-off projects such as mergers and acquisitions |
Assist in implementing new regulations (PPP, EIDL programs) |
