Tag: Cash Flow
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How Construction Companies Can Get Paid Faster
Even in an industry in which payment problems are an acknowledged and visible issue, most invoices or pay-apps end up getting paid. It’s easy to bemoan the problems associated with payment in the construction industry – after all, they must be obvious as a whole mess of vendors (and a portion of a construction participant’s…
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Is Payment Up Front the Way to Avoid Payment Problems in Construction?
At the risk of cutting down the time you spend reading this article, I’ll mention right up front that – as is generally standard when a question is posed in the title of an article – the answer is “no.” But in order to get there, it’s worth spending a little bit of time examining…
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Prompt Pay: Overview and Limitations
Fortunately, there are laws to streamline construction participants’ time to payment – these Prompt Pay laws provide a general timeline for payment moving through each level of the contracting chain. While not a “fix-everything” solution, the guidelines set out by the prompt pay laws in many states should provide the base-line time in which a…
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Construction Accounting: What Is a Work in Progress Schedule?
The Work In Progress (WIP) schedule is an accounting schedule that’s a component of a company’s balance sheet. It’s calculated for each accounting period, and required (according to GaaP principles) on projects where the Percentage of Completion (POC) accounting method is used (link to POC article is below). Though the format of the WIP will…
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What Is Underbilling? | Construction Accounting
Underbilling occurs when a contractor does not bill for all the labor and materials delivered in a billing cycle. It can lead to serious cash flow problems.