476 episodes

Back office support can make or break your contracting company. Let us move your contractor bookkeeping service off the roller coaster of pain onto the merry go round of peace of mind with our U.S.A. based outsourced contractors bookkeeping services and contractor success M.A.P.

Contractor Success Map with Randal DeHart | Contractor Bookkeeping And Accounting Services Randal DeHart | Construction Accountant |PMP | QPA

    • Business
    • 4.5 • 18 Ratings

Back office support can make or break your contracting company. Let us move your contractor bookkeeping service off the roller coaster of pain onto the merry go round of peace of mind with our U.S.A. based outsourced contractors bookkeeping services and contractor success M.A.P.

    Ways To Sustain The Life Line Of Your Construction Company

    Ways To Sustain The Life Line Of Your Construction Company

    This Podcast Is Episode Number 477, And It's About Ways To Sustain The Life Line Of Your Construction Company  
    Cash flow refers to the movement of money into and out of your business. It's based on the amount of money you bring in minus the amount you spend. A positive cash flow means bringing in more than you're spending. A negative cash flow means you aren't bringing in enough to cover your expenses.
     
    Your construction company can run into problems by not charging enough for goods or services, having late-paying clients, growing too quickly, or simply spending too much money.
     
    Solid cash flow management is vital to ensuring your contracting business survives, but not everyone understands what cash flow is or how to manage it. That's likely what makes it a leading cause of stress for small business owners. 
     
    Cash flow can vary throughout the year, depending on sales cycles or whether you've made a large purchase. 
    Here are three strategies you can use to gain control over your cash flow.
    1. Understand your profitability Managing your cash flow is excellent, but it won't help if your business isn't profitable. Determine where your business is most beneficial and where you're dealing with cost overruns. Look at your services to determine how much they bring into your business compared to how much you spend to provide them. Find any inefficiencies in your processes and eliminate them if possible.
    A solid cash flow ensures you offer excellent goods and services and help you achieve your goals while reducing those negatively affecting your finances. You may need to increase your prices to reflect the cost of goods sold.
    Similarly, take a look at your clients. Are there some that you are undercharging or spending too much time and energy on? Can you increase their fees or find higher-paying clients? (I have recently discussed these points in my Tuesday email. If you don't want to miss out, you can subscribe by filling out the form on the right).
    2. Write a cash flow forecast. Your cash flow forecast (a cash flow projection) predicts how your construction business will perform financially over a set period. It's a good idea to have a cash flow forecast for a year, broken down into quarters and months.
    The projection considers your revenue and expenses over those set periods and helps you figure out how much you need to make in that period to cover your costs. It can also allow you to anticipate any upcoming cash flow issues, such as slower periods that may require you to cut back on expenses. If you have any anticipated big-ticket items you'll need to buy or plans to expand your business, include those in your forecast.
    Periodically check your actual cash position against your projection to see how you're doing and if you need to make any adjustments.
    3. Use technology to keep on track. Plenty of software solutions can help you gain insight into your company's cash flow. They can help you build projections and get a real-time view of how your business is doing. This information can then be shared among company managers, so everyone knows how the company is doing financially and where strategies need to be put in place or altered to get you back on track.
    Additionally, invoicing and project management software can encourage faster, more manageable client payments and keep projects on budget. This will also improve your cash flow.
    What we can do:
    A wise business owner once said, "Happiness is a positive cash flow." As a business owner, I'm sure you agree. Everything is better when your cash-in exceeds your cash-out.
    A cash crisis can be emotionally devastating and even kill your business. You know what I mean if you've ever had to beg, borrow, and steal to cover tomorrow's payroll.
    Having a proper cash management system allows you to:
    Know when, where, and how your cash needs will occur. Know what the best sources are for meeting your additional cash needs. Be prepared to meet these needs when they

    • 10 min
    How High Profit Jobs Can Make Or Break Your Construction Company

    How High Profit Jobs Can Make Or Break Your Construction Company

    This Podcast Is Episode Number 476, And It's About How High-Profit Jobs Can Make Or Break Your Construction Company Knowing which jobs have the highest probability of success and profit before getting involved moves your construction company from an unpredictable roller coaster to a peaceful merry-go-round.
     
    You have what appears to be a high-profit job, and now you think you have it made, and I hope you are right!
     
    The problem is that high-profit jobs can turn into low or no-profit jobs. In some cases, they can bankrupt your construction company because you bid on the project using whatever model you are accustomed to using, and in the end, you wind up with cash flow problems.
     
    Many problems can be traced back to the "Halo Effect," which happens when a contractor thinks, "We are so good at (fill in the blank) we should expand into (fill in the blank). 
    The most common situation is when a residential remodel contractor who has built a reputation and a substantial company generating profits of 15% or more decides to start building custom homes. Or the opposite, a home builder who decides to branch out into residential remodeling.
    Home Builder Doing A Residential Remodel
    The processes, tools, equipment, materials, skills, and invoicing procedures required to modify a home with people living there are entirely different from building a house from the ground up.
    New construction workers are more like cave people with a brute force mentality. If something doesn't fit or will not work the way they want it to, they use more brute force until it does. Every problem has one answer "Brute Force."
    The same goes for managing sub-contractors and suppliers. The home builder bids on a residential remodel project using the exact square foot costs they have continuously operated in building houses and quickly discovers the true meaning of "Hidden Costs."
    These costs include dry rot, cracked foundations, broken plumbing, bad wiring, worn-out HVAC, and other unpleasant surprises.
    Homeowners living in the house while the remodel is happening do not ever want to be without water, lights, heat, and privacy, and they don't know how much debris, dust, and noise is involved in a remodel.
    Homeowners want to believe everything is included in the original contract price, including the little extras they think of along the way. When it comes to change orders, that is something most home builders do not understand. They don't have a process for tracking them, let alone pricing and getting paid for doing them.
    Most trade contractors and subcontractors who work on residential remodel projects understand change orders and know how to apply pressure on the builder to get paid. Too often, the main reason home builders go bankrupt is cash flow issues.
    Residential Remodel Contractor Building A Home
    The processes, tools, equipment, materials, skills, and invoicing procedures required to build a house from the ground up are entirely different from modifying a home with people living in it.
    They understand brute force will not work, but patience, planning, and being respectful do. Randal spent a few years in residential remodeling, and it did not take long to learn that new construction behavior does not work in residential remodeling.
    The remodeling contractor uses a form of "Cost Plus" or "Not To Exceed" to provide the homeowner with the scope of work and a contract price the bank needs to finance the construction. That process can work for a residential remodel because the house is already in place, which helps define the size and scope of the project.
    The size and scope of the homeowner's dream house are limited only by what the building codes will allow.
    When the labor, material, other costs, and subcontractor bills pile up, the remodeling contractor asks for a construction draw and is told the bank needs a Pay Application filled out and submitted. Then it will take a while for the bank inspector to review the project and appro

    • 8 min
    Proven Construction Business Processes When Creating Your To-Do List

    Proven Construction Business Processes When Creating Your To-Do List

    This Podcast Is Episode Number 475, And It's About Proven Construction Business Processes When Creating Your To-Do List When you're a construction business owner, your to-do list is often long and constantly growing longer. You need to do many things, and it can feel like they're all urgent. In such cases, it's easy to push essential tasks to the side and focus on less-vital activities, but that often means you miss deadlines, make mistakes or always feel as though you're trying to catch up.
     
    Construction Companies have two basic leadership styles; wait until an urgent situation occurs and react like a firefighter or develop business processes that allow the company to respond calmly and natural resources and solutions to the issues like a traffic police officer on a sunny afternoon.
     
    Firefighter Leaders - Operate in one of three mental states:
    Going into a crisis Coming out of crises Waiting for a crisis Traffic Director - Leaders operate in one of four mental states:
    Preparing for new projects to appear Preventing projects from becoming an emergency Planning for implementation of current and future projects Empowering others and directing the flow of projects to completion and billing The graph below - Is similar to the diagram shown in The 7 Habits of Highly Effective People - Habit 3 Put First Things by Stephen R. Covey to demonstrate this principle.

    We spend our time in one of four ways, as illustrated in the Time Management Matrix above. This matrix defines activities as Urgent / Not Urgent / Important / Not Important. 
    With this in mind, creating your business to-do list would be more straightforward.
    Here are some ways for you to determine the most productive order to complete your tasks. 
     1. Know all of your tasks
    It isn't enough to have a running list of tasks in your head; you need to write them out to see them at a glance. Take the time to list all your tasks, and break down large tasks into smaller steps. 
    Write a list of the activities you need to do for the week—or even the next two weeks—on Monday morning. Include information such as how urgent they are, how long they'll take to complete, and their deadlines. 
    Now you know what you need to complete and when things need to be done. 
     2. Determine what tasks are vital
    There are many methods for determining which tasks are the most vital. We'll go into the Eisenhower Decision Matrix and the ABCDE Method.
    In the Eisenhower Decision Matrix (similar to the graph above), you classify each task into one of four quadrants. These quadrants are based on whether the task is important, urgent, both, or neither. Tasks that are both important and urgent should be done first, followed by those that are either important but not urgent or urgent but not important, and finally, those that are neither important nor urgent. If possible, delegate tasks that aren't both important and urgent to someone else.
    Another method is the ABCDE method, in which you assign each task on your list a letter from A through E based on its level of importance. Tasks with a level of A or B are the most important, while D and E are not at all critical. Anything from C down can likely be rescheduled or delegated to someone else. 
    3. Schedule your tasks
    Now that you know which tasks are the most critical, schedule your to-do list in that order. Write yourself a daily checklist that puts the most important tasks at the start of your day. Don't overschedule yourself, however. After all, there's a good chance that a new activity that is both important and urgent will arise in the course of your week, and you'll need the space in your calendar to address it. 
    Give yourself deadlines in the day to get the work done based on a reasonable assessment of how long the activity should take you. You can also chunk your work, setting aside specific, uninterrupted periods to do focused work and then scheduling breaks around that. 
    Make sure you turn off distr

    • 10 min
    Bad Business Practices In Construction Bookkeeping

    Bad Business Practices In Construction Bookkeeping

    This Podcast Is Episode Number 474, And It's About Bad Business Practices In Construction Bookkeeping One of the biggest challenges construction company owners like you have with an in-house bookkeeper is training them to work for your best interest, not theirs, and deliver consistent results and the reports you can trust daily, year after year.
     
    Having been involved with construction and construction accounting and bookkeeping for over thirty years, we have seen a consistent pattern repeated over and over that will turn ordinary, decent, pleasant bookkeepers into a disheveled, broken, mean, nasty, arrogant trolls, and that's a good day when the sun is shining, and the birds are singing!
     
    Here's how it happens: 
    Someone is assigned the construction bookkeeping duties, and they are typically mild-mannered, shy, and unable to say no. The newly appointed "bookkeeper" opens the QuickBooks Pandora's box and loads the CD in the computer, believing it will be set up and ready to go in ten minutes.  That's when the first of several unpleasant surprises happens; the pop quiz. QuickBooks screens start popping up and asking questions! Nobody said anything about a test or an exam, and panic began to take hold. The bookkeeper thinks, "don't screw this up because I can't afford to lose this job!" The questions keep coming like a raging river, so to put the responsibility on someone else, the bookkeeper asks the contractor for help and is told: "I don't know, you're the bookkeeper. Go figure it out. I'm busy!" Luckily QuickBooks has a guided tour of QuickBooks setup; unfortunately, the bookkeeper charges forward, taking all the default answers suggested by QuickBooks, and in just over two hours, QuickBooks is set up horribly wrong. Choosing the correct QuickBooks Version is the most critical part of all because it is the foundation upon which your entire financial system is built. Put the wrong foundation under your business, and it will not matter who is doing the bookkeeping because it will always be a mess, and you will never get the reports you really need to operate and grow your construction business profitably.
    Contractors who do not earn much money see bookkeeping as overhead which costs money and therefore is a drain on profits, so they get a cheap computer, tiny monitor, garbage printer, tiny desk, and broken-down chair.
    The contractor assigns additional tasks to the bookkeeper to get their money's worth. "Go fetch" and do everything - like personal errands, delivering materials, supplies, and paperwork to the job site, handing over all usernames and passwords to buy and pay stuff, making coffee, answering the phones, taking out the trash, cleaning the bathroom—anything and everything to get "value" out of the time and money wasted on bookkeeping. Contractors can miss many deadlines but miss a payroll, and they are out of business. The day that happens, your staff is looking for a new job no matter what they tell you. The contractor gets angry, makes deep noises from the chest sound like important messages from the brain, and blames the bookkeeper for the missed payroll. What has now evolved into the incompetent bookkeeper will respond with something like: "The time cards never arrived, so I could not process payroll!" The contractor simply responds with something like: "You should have figured out how to get them even if it meant using your car, your gas, your personal time and have gone to the job site and got them; it's your fault! I depended on you to do your job, and you let me down!" This is where the ordinary decent, pleasant bookkeeper starts growing an attitude, thinking you don't understand how complicated bookkeeping is with a program like QuickBooks that is all screwed up and won't work right! Getting anything done in QuickBooks is an immense fat royal pain, let alone all the other stuff the contractor wants to do. The bookkeeper thinks you don't know or care because you hired them to take care of

    • 10 min
    How Technology Helps Construction Businesses Save Money

    How Technology Helps Construction Businesses Save Money

    This Podcast Is Episode Number 473, And It's About How Technology Helps Construction Businesses Save Money The use of technology in construction has come a long way. Many articles have already been written about how construction has been sluggish in adopting new advancements in technology compared to other business sectors. However, more and more companies, especially small construction businesses, have been open to using technology to improve their operations. 
     
    Any change is difficult–especially in business. Changing how things have always been done in the past involves a lot of effort, persistence, and flexibility, not to mention financial investment. To sustain the interest and efforts towards these changes, it's crucial to fully understand and not lose sight of the benefits of adopting technology. For businesses, increasing the bottom line and reducing costs are always practical reasons to leap. 

     
    Here are the ways technology helps construction businesses reduce costs:
    Pre-construction Process
    From bidding up to gathering the materials and workforce required for a project, there are many inefficiencies that technology can solve. Relying on paper or even disparate systems can cost different stakeholders a lot of time and money in the pre-construction phase. 
    Careful planning helps contractors prepare for a project where delays are minimized; budgets are accurately forecasted and adhered to, and, ideally, different apparent and hidden risks are identified and mitigated. This applies to various participants in a project. Planning is equally vital if you are a subcontractor or supplier to a big project. 
    End-to-end project management software tailored to construction projects solves many of these issues. It also serves as a single source of truth for different participants in the project. Traditionally, most documents like plans and blueprints are in the form of hard copies, making it difficult to communicate changes and practice dynamic version control. The time spent passing on and confirming new information is necessary when dealing with paper references. These are eliminated when plans and documents are digitized. Not only is time saved, but errors and miscommunication are greatly minimized.
    The transparency and efficiency resulting from embracing technology in the pre-construction phase pay off beyond the savings when plans are created. The increased efficiency and transparency also foster timely progress and early discovery of issues when the project is in full swing. 
    Business Operations
    For smaller contractors and construction businesses, ensuring that back-office operations are as error-free and optimized as possible is crucial, especially with the razor-thin margins in the industry. While those on the job site are hard at work ensuring that services, labor, and materials are delivered up to the client's expectations, those who work inside offices to support projects, especially on the finance side, benefit significantly from technology in optimizing work–ensuring that precious hours are used in high-value activities instead of being consumed by repetitive and easily-automated tasks. 
    Accounts receivables, accounts payable, payroll, and general accounting functions are among those where embracing technology makes an immediate impact. Many of those in construction accounting already use spreadsheets to manage accounts and finance.
    Construction accounting has complexities that require different approaches where using disjointed spreadsheets can fall short. Additionally, relying on spreadsheets and manual file management opens up businesses to risky errors that lead to poor records, inaccurate data, and poor decision-making.
    Another area where technology can save construction businesses from losing profits and time complies with legal requirements. For payments, a fundamental but often unwieldy portion of credit management is ensuring that all projects worked on are protected by lien

    • 11 min
    Unconventional Ways To Market Your Construction Business

    Unconventional Ways To Market Your Construction Business

    This Podcast Is Episode Number 472, And It's About Unconventional Ways To Market Your Construction Business  
    One of your greatest fears is wasting money on a less than good lead.
     
    They may or may not have any genuine desire for services. Sometimes a person is committed to collecting three bids when they already have someone picked out to do the work. They may be looking for a "temporary friend" to do them a favor, or by the time you have completed the form, they have changed their mind and no longer want service. This is often the case when one spouse or partner wants the work done, and the other doesn't.
     
    Sometimes you want to try something new when networking with other business owners. Here are some unconventional ways to grow your network and bring in new leads.
    1. Collaborate with others in the industry
    You know your niche, so you know the questions about your industry. Collaborate with people who fit your ideal market. For example, you could create a newsletter where you ask people in your niche market questions about the industry, or you could send out a survey to your market to create a report about the state of the industry. Ask the people you want to work with if they'd be a speaker at an event you host. 
    The more people you speak with, the more your name will be seen as a leader in the type of construction industry you work in, so don't be afraid to reach out to people to share their insights. 
    2. Try a new social media platform
    You want to be where your customers are, but if you're looking to network with new people, you may want to try a new social media platform. Learn how to use the new platform–including any groups or communities you can be part of. If you've always used Facebook, give LinkedIn a try. Once you're on the new platform, look for leaders to connect with and share your content with a new audience.
    3. Make videos
    Users are increasingly engaged by video content. It's personal, shows the human side of your business, and fosters relationship building. You don't have to spend much time or money creating video content. Using the camera on your smartphone, you can film yourself talking about your services and business or sharing insights. You can even record personal messages to go out to leads to get to know you better. 
    4. Attend industry events If you offer services to particular clients, look into whether you can attend conferences and trade shows. For instance, if your construction business focuses on tiny home building, find out if you can participate in networking events. Go to the events to get to know other people rather than sell your services. Ask lots of questions to get to know others and gain insights into the industry.
    5. Host an event Ask what information is essential to your audience and host an event that addresses those pain points. A virtual event with a guest speaker and information relevant to the industry is excellent. Make sure you or someone from your construction business can speak and market your event to potential clients in the industry. 
    6. Become a resource Introduce people to each other and tell them why you think they should get to know each other. It may sound counterintuitive, but those on both sides of the introduction will remember you as helpful if you start referring people to others. Have a list of service providers you trust and your names to share with others. You can also share valuable content, guide people to the resources they need, and answer questions in your niche.
    Write a list of the service providers people in your niche typically need and have some names handy as referrals. These may include business lawyers, marketers, importers, various vendors, and construction accounting specialists. They'll all remember you for referring them. 
    Final thoughts
    Most homeowners have a real need before asking for a stranger to come. They are looking for any "Affinity" that makes you a safe choice. This is why people are on the Social

    • 8 min

Customer Reviews

4.5 out of 5
18 Ratings

18 Ratings

Great course ,

Randy knows construction

Randy does a great job in talking accounting in ways that make it accessible for the non-finncial person. His episodes are full of great tips you can really use!

TxPropertyGuy ,

Highly Valuable Info for Construction Pros

This podcast is a jewel for those who discover it and apply the principles that Randal teaches. Real estate investor who has managed several construction projects here. Whether you're the contractor who works with home owners, investors or property developers, this podcast contains extremely important advice for producing a profit at the end of the day. I'm an old hand at Quickbooks, but appreciate the insight Randal shares about knowing your numbers and making wise decisions, based on the best accounting and contractor practices he advocates.

arkkeeper ,

Good stuff

If you run a construction company, this is a good podcast to listen to. The accounting topics are varied, but each pertinent to our unique business. My only major complaint about the show is that he records at such a low volume, it's very hard to hear. Very hard. On more than one occasion I've had the volume all the way up on everything, been sitting in a quiet room and still can't hear what he's saying. I've deleted some shows because I just can't hear them and he's pretty soft-spoken which makes it even harder to hear him.

If you can get past that, it's good stuff.

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