Construction Financial Management

Construction Blog

Construction Allowances: 4 Effective Practices for Budget Management

Last updated October 2025 One of the most desired situations for any builder is to have an estimated budget as close to the true cost as possible. The more accurate the planned construction budget, the easier and faster project completion will be. However, the construction industry is all about uncertainties and unexpected things popping up during […]

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Construction Blog

Construction Formulas: The Working Math Behind Takeoffs, Estimates, and Budget Performance

I learned the hard way that estimating mistakes rarely come from carelessness but from inconsistent math without specific construction formulas. Imagine how the whole project can go sideways when a takeoff uses floor area instead of wall area, when roof area is not slope adjusted, or when markup is read as margin. Small deviations in […]

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Construction Blog

Cost Plus vs Fixed Price in Construction: What Invoicing Method to Choose?

Is it easier to build a house or to manage the paperwork behind it? The answer is that a general contractor is not only a builder but a businessman and must do both. It does not matter if a builder is involved in custom home or commercial construction; the first step is choosing the right […]

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Construction Blog

How to Avoid Payment Delays in Construction: Contractor’s Guide

If you are in a construction business, you know that a single late payment can nearly ruin everything. Timely payments are the driving force of our industry. It’s not only about the financial management of the project. Delayed payment in construction means a subcontractor may not show up at the site, or a vendor may […]

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Construction Blog

Performance Bond in Construction: What General Contractors Should Know?

Many people dream of building a new house from scratch, but are often afraid. I can understand them. A homeowner usually knows how his house must look, but the entire construction process may seem like a nightmare. The idea that you can trust a large sum of money to a contractor makes homeowners think of […]

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Construction Blog

End-to-End Guide: PO Invoice Processing in Buildern

Over the years of working with construction teams, I’ve noticed one recurring pain point: purchase orders (POs) and client invoices never move as smoothly as we’d like them to. Some invoices are issued late, while others don’t match the original PO. Sometimes, we may even lose track of commitments made in the field versus what’s […]

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Construction Blog

Tips on Xero Integration: How to Streamline Your Invoicing?

Are you tired of writing one invoice? Imagine a general contractor writing dozens of them weekly. For me, working with numbers has been the most frustrating part of running a construction business. However, accurate accounting is the background of a successful project. Whether you like it or not, you have to take care of it. […]

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Construction Blog

AI Billing in Construction: What It Is and How It Helps with Repetitive Tasks

Billing in the construction industry is not as straightforward as in other areas. It’s more complicated than providing a service and being paid for it. Construction projects often involve evolving scopes of work, fluctuating material prices, and intricate payment schedules. Besides, there are different types of billing and such factors as retainage or markups. This […]

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Construction Blog

Construction Budgeting: Complete Blueprint for General Contractors

Published October 5, 2022. Updated August 1, 2025 Construction budgets have always played a critical role in how projects perform. That hasn’t changed. What has changed is the level of precision now required to keep jobs on track. A budget today is the framework for your project’s financial health. When done right, it tells your […]

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Construction Blog

Construction Financial Management: From Budget to Bottom Line

Running a construction business means navigating constant change. Budgets shift, material prices rise, clients request last-minute revisions, and schedules rarely stay on track. Even with solid estimates and a reliable crew, profits can disappear quickly without effective construction financial management. Some of the most common financial issues as construction budgeting mistakes or inaccurate labor estimates, […]

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Construction Blog

What is General Contractor Financing for Homeowners? [Types, Benefits, and Builder Tips]

Financing has become a quiet dealbreaker in residential construction. Even motivated clients hesitate when they hit the funding wall. For builders, that’s time spent quoting jobs that never break ground. The solution is to offer clear, accessible financing and construction loan options upfront. When builders understand the tools available and frame them properly, projects move […]

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Construction Blog

How to Calculate Labor Cost in Construction the Right Way [Key Formulas and Factors]

Ever wrapped up a project only to realize your labor costs ate into your profit more than expected? Builders often find labor as one of the most unpredictable expenses in construction. While managing a small residential remodel or a large-scale commercial build, knowing how to calculate labor cost in construction the right way can mean […]

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Construction Blog

What Is the Schedule of Values (SOV) in Construction: Complete Guide

Ever been stuck waiting on a payment because something got “lost in the paperwork”? Or had a client question a line item on your invoice months into the job? Those are exactly the problems the schedule of values (SOV) solves. For most builders working on larger or bank-financed projects, the SOV acts as a must-have […]

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Construction Blog

Construction Purchase Order: Definition, Workflow, and Benefits

One overlooked purchase order (PO) can disturb an entire timeline. One missing detail can lead to thousands in unexpected costs. Procurement, especially in construction, isn’t only about placing orders. Here, we have control over risk, stay within budget, and keep vendors aligned with the job. Still, many construction teams rely on multiple tools and informal […]

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Construction Blog

What are Construction Draws? Key Processes and Challenges Explained

If you’ve been in construction long enough, chances are you’ve already dealt with construction draws, even if you don’t call them that. It’s one of those terms that pops up around contracts, payments, and bank-financed projects, usually when you’re knee-deep in paperwork or waiting on a bill. Construction draws are a central part of the […]

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Construction Blog

5 Financial Construction KPIs Every Contractor Should Track

What’s the point of doing the work if you don’t know whether it’s actually paying off? This may sound harsh, but as many contractors struggle with performance reviews, it is more than just a rhetorical question. Whether you’re managing one or ten projects, tracking key construction KPIs is what separates profitable businesses from those just […]

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Construction Blog

Construction Accounting Explained: Key Terms, Tools, and Techniques

Construction accounting is a unique branch of accounting that reflects the specific financial needs of contractors and construction companies. It’s not a parallel universe, but it’s worth knowing some important differences between construction-specific accounting and other types of business accounting. The projects are usually larger and more complex than other business ventures. So, the impact […]

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Construction Blog

Best Construction Job Management Software 2025 | Top 5 Picks

Keeping construction on track isn’t easy. Between construction project management, budgeting, and scheduling, there’s a lot to manage and without clear systems in place, things can quickly fall through the cracks. It can all become even worse when miscommunication and unexpected costs start creeping in. Construction job management software helps builders take everything under control […]

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Construction Blog

6 Critical Construction Budgeting Mistakes to Avoid

Budgeting is one of the challenging parts of construction projects. It is estimated that 9 out of 10 construction projects experience budget overruns. It is so tricky that even the most seasoned professionals often make construction budgeting mistakes, which cause delays and, in worst-case scenarios, lead to project failure. These mistakes can stem from a […]

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Construction Blog

Cash Flow Management in Construction: Everything You Need to Know

Did you know that 82% of construction companies failed not because of their profits, but due to improper cash flow management? And, it is not surprising that when cash does not come up on time to cover what is needed, the entire operation can start fluctuating, leading to failure. That’s why strategic cash flow management […]

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Construction Blog

Construction Profit Margin vs. Markup: Guide for Contractors

Construction profit margin vs. markup is one of the most misunderstood financial concepts in the industry. Many contractors confuse the two, resulting in underpriced bids and disappointing profits. Understanding how to calculate profit margin and markup correctly is essential to pricing jobs effectively and running a profitable construction business. In this guide, we clarify the […]

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Construction Blog

Construction Profit Margin: What It Is and How to Improve Yours

Construction profit margin is one of the most important financial indicators for contractors, yet it’s also one of the most misunderstood. With unpredictable material costs, labor shortages, scope changes, and narrow bid competitiveness, turning a consistent profit in construction is becoming harder each year. Even a minor miscalculation or delay can erode your bottom line. […]

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Construction Blog

Construction Job Costing: A Smarter Way to Stay on Budget and Maximize Profits

Ever wondered where all the money goes in construction projects? Our industry doesn’t rely solely on winning bids, but also on how well you manage costs after the contract is signed. From tracking labor and materials to identifying cost overruns before they spiral, construction job costing gives builders the clarity and control they need to […]

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Construction Blog

Construction Soft Costs: Overview, Types, and the Best Practices for Managing Them

Published January 21, 2025. Updated October 17, 2025 In construction, a precise estimate serves as a building block for any project’s success. However, it is not only the bricks, cement, or wood that make up the entire cost. There are some intangible expenses hidden behind closed doors that are often overlooked. Those so-called soft costs […]

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Construction Blog

How to Reduce Construction Costs Without Compromising Quality

Tracking construction costs is a crucial aspect for builders. With increasing prices for materials, shortages of workers, and unexpected delayed expenses can quickly add up; therefore, practical steps should be taken to keep them in check 🧾🔍. Builders who actively manage construction costs can save a lot of money while keeping quality high. Implementing the […]

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Construction Blog

Construction Loans: A Detailed Guide for Construction Companies

Construction loans are important for funding building projects but the approach may differ depending on the borrower. For construction companies, these loans support large developments with specific financial requirements. Similarly, they are helpful tools in helping to manage cash flow and financing big projects. Identically, it is important to understand construction budgeting, so that your […]

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Construction Blog

FHA Construction Loans: Pros, Cons, Steps, Alternatives, and More

While planning to build a dream from scratch or just remodel the kitchen, financial uncertainty can be a barrier. FHA construction loans might be the solution you’re looking for – but are they the best fit for your construction budget planning? Understanding all the details before signing up for a 30-plus-year mortgage is crucial for […]

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Construction Blog

5 Types of Construction Cost Estimation and How to Do It

The wise construction manager knows that the actual cost of any project is only realized once the task is complete and all financial obligations have been accounted for. That’s because too many predictable and unpredictable factors can affect the cost of a major construction project. Meanwhile, however challenging the task of predicting the total cost […]

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Construction Blog

Home Construction Loans Explained: Steps, Requirements and More

Last updated August 2025 When planning to build a dream home, understanding the work process with home construction loans is equally crucial for homeowners and builders. Designing and building a house from scratch seems exciting and straightforward on paper – choosing custom finishes, new furniture, and watching your vision take shape. But as soon as […]

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Construction Blog

Detailed Construction Project Cost Breakdown [Examples Included]

Unexpected cost overruns and delays are the last things we expect when it comes to construction project cost breakdown. An unsettling nationwide trend shows construction projects often exceed their budget by at least 16%, thus highlighting the importance of detailed planning and estimation. To help you avoid such unwelcomed surprises, we have put together a […]

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Construction Financial Management

QuickBooks for Construction: Bookkeeping with Essential Integrations

How do you manage to keep track of your construction company’s finances with so many moving parts at the job site? Your answers may vary, but using QuickBooks for construction is a highly recommended solution by many contractors and bookkeepers. If you’re still among those who use the good-old Excel accounting, this article will help […]

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Construction Blog

6 Main Construction Billing Methods | Which Is Right for You?

Have you ever considered how the construction billing methods you choose impact the success of your project? Selecting the appropriate billing method is not a decision to be taken lightly. It goes beyond mere preference; it’s about understanding the balance between ensuring timely payments and maintaining the financial health of the project. With this in […]

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Construction Blog

Construction Taxes 2024: USA, Australia, New Zealand, and Canada Guide

Are you still struggling to navigate the complex web of construction taxes, uncertain about deductions, credits, and compliance requirements that could impact your bottom line? Lucky for you, we are calling all the builders in the USA, Australia, New Zealand, and Canada as we have gathered all the essential information about construction taxes. Save our […]

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Construction Blog

Construction Invoicing: 5 Steps to Get Paid on Time In 2024

Last update February 2024 86% of construction professionals experience stress from slow payments and cash flow problems. This creates a chain reaction of financial hardship for the construction companies, resulting in reduced profits, project delays, etc. But hold on; why should this be the case? Getting your construction invoicing payments on time can be a […]

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Construction Blog

General Contractor Markup 101: Everything You Need to Know

Did you know that the average general contractor markup on labour is 25% and higher, and on materials, it can be as high as 50%? What does this imply for your business as a builder? Considering these average markup percentages, it’s essential to ask yourself: Are you charging enough to impact your profitability positively, or […]

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Construction Blog

Construction Retainage: Risks and Solutions for General Contractors

Published November 23, 2023. Updated September 22, 2025 The construction industry is a risk-intensive business. Owners have to make sure that their investment is secure while contractors try to maximize their profit margins. Considering the sensitive nature of construction projects, where each party has its own vested interests, each party tries to add security for […]

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Construction Blog

In-Depth Guide to Maximizing Construction Payment Management

Construction payment management can be a challenging process, as common issues such as payment disputes, lack of proper documentation, and poor cash flow management often occur. These issues can lead to financial instability, strained relationships with clients, and legal disputes. To help construction business owners and managers overcome these challenges, we’ve created an in-depth guide […]

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Construction Blog

Contractor Payment Terms | Everything You Need to Know

Are you curious about handling contractor invoices without any hassles or issues? In the construction industry, contractor payment terms are as important as hiring professional contractors. A lack of a payment agreement or a poorly designed one can lead to project delays and, in some cases, project termination. In this article, we will explore what […]

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Construction Blog

No Penny Is Underlooked: 5 Types of Construction Cost Estimation

The wise construction manager knows that the actual cost of any project is only realized once the task is complete and all financial obligations have been accounted for. That’s because too many predictable and unpredictable factors can affect the cost of a major construction project. Meanwhile, however challenging the task of predicting the total cost […]

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Construction Blog

Construction WIP (Work-in-Progress) Report: How to Track Finances?

Managing the financial part of a construction project is a complex task. As the project grows, keeping track of figures at all phases becomes crucial. The risk of “missing the point” during a long construction project is high if you don’t do it on time. For this reason, general contractors usually use a construction work-in-progress […]

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Construction Blog

Manage Payments Reliably: Top 9 Contractor Invoice Software in 2025

Published on November 1, 2022. Updated on August 25, 2025 Regardless of the sphere of your construction activity, as a contractor, you will have to deal with invoicing. Creating accurate invoices can be as time-consuming and frustrating as dealing with clients who don’t pay on time. Documentation management and automation are crucial to streamlining workflow […]

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