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I can relate to this as a past cost engineer.

A perfect summary. We often overlook how technological advances can provide a significant reduction in profits. Higher overheads effect every project overall and your bottom line net profits.

Confessions of a Cost Estimator: Counting Pennies & Derailing Dreams? Have you ever heard the saying, "Penny wise, pound foolish?" In mega-projects, it's more like, "Penny wise, multi-million pounds foolish!" As a cost estimator, I've seen firsthand how the obsessive hunt for micro-savings can throw a wrench into the gears of even the most well-oiled machines. Death by a Thousand Papercuts: While we're haggling over a 5% discount on office supplies, critical materials might be delayed, causing weeks of downtime and hundreds of thousands of hours of lost productivity. The Sunk Cost Fallacy on Steroids: Imagine nixing a £10,000 software upgrade that would streamline our entire workflow, only to spend £50,000 in overtime trying to do the same tasks manually. Missing the Forest for the Trees (Or the Bridge for the Bolts): It's easy to get tunnel vision on line-item expenses, but ignoring the bigger picture can lead to massive oversights in overall project scope and budgeting. The Bottom Line? Micromanagement of minor expenses can be a significant project killer. A balanced approach that prioritises strategic cost control is critical. After all, we're building bridges, not just balancing spreadsheets! #InfrastructureHumour #CostPlanning #BudgetQuest #InfrastructureAdventures #UnexpectedCosts #BudgetBuster Let's connect and share war stories! Have you ever seen a project go sideways due to excessive penny-pinching? What strategies have you found successful for maintaining a healthy balance between cost control and project progress? Let me know in the comments! 

Confessions of a Cost Estimator: Counting Pennies & Derailing Dreams? Have you ever heard the saying, "Penny wise, pound foolish?" In mega-projects, it's more like, "Penny wise, multi-million pounds foolish!" As a cost estimator, I've seen firsthand how the obsessive hunt for micro-savings can throw a wrench into the gears of even the most well-oiled machines. Death by a Thousand Papercuts: While we're haggling over a 5% discount on office supplies, critical materials might be delayed, causing weeks of downtime and hundreds of thousands of hours of lost productivity. The Sunk Cost Fallacy on Steroids: Imagine nixing a £10,000 software upgrade that would streamline our entire workflow, only to spend £50,000 in overtime trying to do the same tasks manually. Missing the Forest for the Trees (Or the Bridge for the Bolts): It's easy to get tunnel vision on line-item expenses, but ignoring the bigger picture can lead to massive oversights in overall project scope and budgeting. The Bottom Line? Micromanagement of minor expenses can be a significant project killer. A balanced approach that prioritises strategic cost control is critical. After all, we're building bridges, not just balancing spreadsheets! #InfrastructureHumour #CostPlanning #BudgetQuest #InfrastructureAdventures #UnexpectedCosts #BudgetBuster Let's connect and share war stories! Have you ever seen a project go sideways due to excessive penny-pinching? What strategies have you found successful for maintaining a healthy balance between cost control and project progress? Let me know in the comments! 

After working with over 100 clients solving cash flow and expense tracking issues, I need you to know this is the #1 thing that is overlooked 👇🏽 Not tracking labor costs accurately. and it's costing you big time. Labor is often the biggest expense in a construction business, and when you’re not tracking those hours down to the minute, you’re losing money without even realizing it. One client came to me with a major cash flow issue. Turns out, labor hours were being mismanaged, and we found out he was overspending by thousands each month on projects labor compared to what he estimated. His guys were spending more time per project then what he expected and he never adjusted his budgets because he simply had no idea of this issue until we started tracking the hours by project. Once we dialed in his labor cost tracking, his profits went up, and the cash flow problem disappeared. Don’t let something as simple as labor tracking cost you more than it should. It’s an easy fix with a big impact. 💸

𝐌𝐚𝐱𝐢𝐦𝐢𝐳𝐞 𝐘𝐨𝐮𝐫 𝐏𝐫𝐨𝐣𝐞𝐜𝐭 𝐏𝐫𝐨𝐟𝐢𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐰𝐢𝐭𝐡 𝐭𝐡𝐞 𝐑𝐢𝐠𝐡𝐭 𝐑𝐞𝐩𝐨𝐫𝐭𝐬 📈 In the construction, keeping track of your finances is crucial for each project's success. Two powerful tools for this are the WIP (Work-In-Progress) Report and the Job Cost Report—each offering unique insights to keep your project on track financially. ✅ WIP Reports: Ideal for tracking overall project progress, revenue recognition, and financial compliance. They help ensure accurate billing, show completion percentages, and keep cash flow steady. ✅ Job Cost Reports: Perfect for detailed tracking, these reports break down expenses by task and material, helping you manage your budget effectively and adjust spending as needed. Link our guide: https://lnkd.in/g9Awv55y At Construction Cost Accounting (CCA), we’re here to provide expert bookkeeping services tailored for your construction projects. Whether you need WIP forecasting or job cost analysis, our team is ready to help you maintain profitability and enhance financial transparency. #constructionbookkeepingservices #wipreport #constructioncostaccounting --------------- Construction Cost Accounting Maximize Your Profits 8317 Painter Ave #4 Whittier, CA 90602 +1 949-889-3283 support@constructioncostaccounting.com

Understanding Labor Burden Rates: Boost Your Profit Margin ⠀⠀⠀⠀⠀⠀⠀⠀⠀ In this video, we detail the process of calculating labor costs for a supervisor over three days by incorporating burden rates and profit margins. By breaking down hourly rates, overhead, and profit calculations, the video provides a clear method to determine extended costs and unit prices for accurate budgeting and financial planning. ⠀⠀⠀⠀⠀⠀⠀⠀⠀ 00:00 Introduction to Supervisor Requirements 00:16 Calculating Burden Rate and True Cost 00:41 Unit Cost Formula Breakdown 01:08 Extended Cost Calculation 01:15 Overhead, Profit, and Final Pricing ⠀⠀⠀⠀⠀⠀⠀⠀⠀ 🔨 How to Estimate a Construction Project for Contractors (FREE TEMPLATE) 🏗️ ⠀⠀⠀⠀⠀⠀⠀⠀⠀ 📲 Download Free Template: https://lnkd.in/gTei8UF9 ⠀⠀⠀⠀⠀⠀⠀⠀⠀ #LaborBurden #Construction #Accounting #CostAccounting #Labor #LaborAndBurden #BusinessOverhead #ConstructionManagement #CostOfWork #DirectLaborBurden #BurdenedLabor #LaborBurdenPercentage #BurdenCosts #TrueCostOfLabour #LaborBurdenCalculator #LaborCosting #LaborBurdenCalculation #FullyBurdenedLaborRate #BurdenRateCalculation #EmployeeCostPricingAnalyzer #LaborBurdenWorksheet #LaborCost #NickPeret #CTO #FractionalCTO

Are you using one of the most overlooked but powerful tools in construction - what if you had a crystal ball? 👇 A crystal ball in the #construction industry is the WIP report, but why? WIP reports: ✅ Spot profitability issues before it's too late - a weekly review with project managers forces the conversation about how to get off-track budgets back on track, ✅ Gives insights on how your jobs are financed - tells you if your projects are cash flowing correctly or if you are borrowing from one job to pay the costs of another, ✅ Smooth out financials - wild swings in your revenue and profit make it difficult to accurately plan for the future, ✅ Eliminate unforeseen cash flow issues - know in advance when cash will get tight so you can sleep knowing payroll is covered because you prepared. I've seen WIP reports change the lives and financial outcomes of business owners - no company is too big or too small to use WIP reports. Have a question about WIP reports? Comment below 👇

“Revenue is vanity, profit is sanity, and cash is king.” As a growing contractor, one of the most important metrics that you can measure is your cash conversion cycle. The cash conversion cycle is a metric that expresses the length of time, in days, that it takes a contractor to convert resources into cash flow. It begins the day you purchase materials and mobilize your workforce to a project and ends when the check is received and cashed. Shortening this cycle as much as possible is vital to making sure you have healthy cash flow to continue to fund your jobs and operational expenses. Here are a few best practices for accelerating payments and preventing delays:  - Establish clear project billing processes - Create an Accounts Receivables and collections process - Review WIP reports regularly Get more best practices for optimizing your cash conversion cycle in this week’s issue of The Profit Playbook for contractors: https://lnkd.in/eSPiamax #constructionaccounting #construction #generalcontractors

𝑰𝒔 𝒀𝒐𝒖𝒓 𝑪𝒐𝒏𝒔𝒕𝒓𝒖𝒄𝒕𝒊𝒐𝒏 𝑩𝒖𝒔𝒊𝒏𝒆𝒔𝒔 𝑻𝒓𝒂𝒄𝒌𝒊𝒏𝒈 𝑬𝒗𝒆𝒓𝒚 𝑷𝒆𝒏𝒏𝒚? 𝑻𝒉𝒆 𝑷𝒐𝒘𝒆𝒓 𝒐𝒇 𝑱𝒐𝒃 𝑪𝒐𝒔𝒕𝒊𝒏𝒈 𝒊𝒏 𝑩𝒐𝒐𝒌𝒌𝒆𝒆𝒑𝒊𝒏𝒈 In the construction industry, the complexity of managing costs across multiple projects can make or break your business. This is where job costing comes in as an essential bookkeeping strategy. Unlike standard bookkeeping that focuses on general income and expenses, job costing allows you to allocate every expense—whether it’s labor, materials, equipment, or overhead—directly to individual projects. Why does this matter? 1. Accurate Budgeting: Job costing enables you to compare estimated costs with actual expenses for each project. This ensures that your budget aligns with reality and allows you to quickly identify if a project is veering off course financially. 2. Improved Profit Margins: By breaking down costs per project, you can pinpoint which jobs are the most profitable and which are draining resources. This insight helps you focus on projects that bring higher returns. 3. Better Decision-Making: With detailed cost breakdowns, you’re equipped to make informed decisions for future projects. Whether it’s adjusting labor allocation or negotiating better rates on materials, job costing helps you make data-driven decisions. How do you track your costs—by job, phase, or project?