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When employees trust a company, they stick around and give you their best. So how do you generate trust? There are 3 simple ways to earn your employees trust — basic human values that are easy to overlook, but essential in building loyal employees. Never mess with an employee’s money. Never ask an employee to do something that you couldn’t, shouldn’t, or wouldn’t do. Never lie to an employee. Most company owners would say they’d never break any of these principles, but many times we don’t realize we’re violating them because we don’t put ourselves in our employees’ shoes. For example, with Principle #1, how are employee hours collected? When overburdened supervisors are rushed for time and make reporting errors, […]

“The goal of standardization is to create a measuring system that increases the collective intelligence of the entire construction industry including the craftsmen and apprentices.” – Lee Clark In Part 1, the following points were proposed as a “standard” to what is a Cost Work Code? Phases = areas, floors, buildings, etc. (Schedule, Sequencing) Cost Work Codes = footings, CIP walls, slab on grade, etc. (Production Measuring, Skill) Cost Classes = labor, material, subcontractor, etc. (Cost) The above represents a “standardization” of terminology for the construction industry that I believe would greatly improve our industry. What we lack is a process to measure the collective intelligence of everyone in construction. When I say “everyone” I am including the new hire […]

“Until we “standardize” the terminology in our industry, the answer to the above question will be; Whatever any Accounting Software Company, Controller or Estimator wants them to be! Each one having different values.” – Lee Clark Before we try and answer the question, let’s briefly define the terminology. Cost Codes are specific types of work being done on a project. Examples of cost codes would be footings, CIP walls, and slab on grade. These generally resemble the CSI index in some form. The differences between companies using them will be in the amount of detail that they are trying to collect for these specific types of work. Generally I have found the detail is to complex for the field. Phases […]

Financial indicators such as the liquidity ratios, leverage ratios, efficiency ratios and profitability ratios can be used to gauge the performance of your business. With the analysis of these ratios, you will be able to make the informed and right decisions for your business. The following are the top four types; Liquidity Ratios These are used to determine a company’s ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. Examples; Current, Quick, Days of Cash, Working Capital Turnover, Under-billings to Equity, Cash to Over-billings. Leverage Ratios Companies rely on a mixture of owners’ equity and debt to finance their […]

Let’s start by defining this question. Can you simply post you’re over/under billings to the GL and view/print accurate financials at any given time? This means without major adjustments, phone calls to PM/Superintendents and working to get stacks of invoices entered into the system. Yes, by just running your WIP report in your accounting system and have it automatically post the over/under billings and know it is correct! This seemed impossible years ago when I first started doing the books for a concrete construction company. I could barely get the WIP built correctly with a spreadsheet. I finally started to get the “feel” or rhythm of the work in progress, but there were problems. One month a project was reflected […]