Budget vs Actual for Month End

Does your company have a budget vs actual set up to be reviewed every month and at year end?  If you do, have you been reviewing it and what has been the out come so far this year?  

If you don't -- you need to have a budget vs actual in place and you need to be reviewing it every month with the key people in your company or organization.  Several months prior to year end, you need to work on the budget for the next year with input from all department heads.  

Looking at historical data and anticipating expenses and revenues for the upcoming year based on projects that your company has in the works and in the pipeline is critical for your company's survival.

Companies that don't have budgets vs actuals are working without any idea of what to anticipate and face too many unknowns.  

Your company budget needs to be finalized and approved by all department heads and business leaders in your company and each department should know what they have to work with in the coming year.

Any changes during the year need to be conveyed to those same persons.  Feedback from management to departments and from departments to management is necessary throughout the year to deal with changes that occur or changes that are anticipated.

Budgets vs actuals will help with cash flow requirements and can help with tax planning and company marketing and planning.

This is the time of year when you should have those controls in place.  Most of the calls I get this time of year are for planning and year end close out.  If you don't have your plans in place for 2013, get those started today.

Charlene S Reed, Owner/Author

Responsible Business Services

"Construction Administration Handbook"

www.myconstructionoffice.com

Exit Interviews - Does Your Company Perform Them

When employees leave your company, are they participating in an exit interview?  An exit interview is an important step in keeping your company out of some legal issues.

Of course, exit interviews are not required and you won't be sued for not performing these, however, you could protect your company from claims brought on by an employee who says they were treated unfairly or didn't get offered COBRA or other items that should be covered when an employee leaves.  

If an employee has decided to leave your employ, you should ask them several questions and encourage honest feedback such as:

• What made you decide to leave the company?
• What did you value about the company?
• What did you dislike about the company?
• Was there a single event that caused you to look elsewhere for employment?
• What does the new company offer that you made you decide to accept a position with them and leave our company?
• What did you dislike about your job? What changes would you make in your job?
• Do you feel you were given all the necessary tools to perform your job?  What was missing? (Training, etc.)
• How was your relationship with your supervisor or manager?  Did this affect your decision to leave?
• Did you feel you had clear goals and know what was expected of you in your job?
• Did you receive adequate feedback from your supervisor or manager regarding your performance?
• What changes or recommendations would you like to share with us?
• What do we need to look for in finding your replacement (skills, characteristics, qualities)?
• Can you offer any other comments or suggestions that would help us to improve our company to become a better company?

Your exit interview should be ended with a positive affirmation to your employee that the comments and answers will be taken into consideration and used to provide the management with feedback on the processes.

Be sure to wish them much success in their new position.  Thank them for their feedback and comments.

An exit interview doesn't have to be a bad situation even when an employee is terminated for cause.  You should review the items that caused the termination whether it is attendance, theft or whatever it is to learn why the employee failed at their position.  

Feedback is always a good way to learn what and where your company can improve.  Never pass up the chance to learn what others are thinking even if you disagree.  Take the opportunity to learn what is happening in your company.

Happy Thanksgiving ! !

Charlene S Reed, Owner/Author

www.MyConstructionOffice.com

"Construction Administration Handbook"

Using Excel for Project Analysis

What do you use for data analysis on your projects?  I prefer Excel for a lot of things.   I use it to create pivot tables, sort long lists, re-create forms, financial statements and other financial spreadsheets and charts.  I think the only other programs that I use as much as Excel are Photoshop and Outlook, but that is another topic for another day.

Excel can be used for so many things and yet it can be used on very complex spreadsheets, graphs and charts and dashboards.  I am still working on a dashboard specifically for contractors that would keep owners updated in a one-page report to show them where all areas of their company is at.

Some of the things that I am needing is feedback from companies to tell me what they want to see and what they don't want to see.  I know every company is different and am working on a way to be able to hide what some don't want to see, and still have it available to the ones that do want to see it.

I know people in charge of Operations will want to keep their hands on the pipeline of projects coming and the status of projects in all stages.  They will also be a little concerned with the accounting of projects and marketing.  

Project analysis on a single project basis would definitely be a large part of this project.  Every project should have it's own page complete with graphs and charts showing the complete breakdown of budget vs actuals, costs and billings to date, overhead expenses allocated and used, over or under billings, costs to complete and any pending changes or modifications.

The big challenge is pulling this all together and making it expandable to companies that want to use this who have over 100 projects all the way down to the company that has a handful of projects.  The challenge will be pulling all of the data into one sheet to consolidate the information.  

This wouldn't necessarily be for the larger companies that are running Timberline or other programs like this since they have these reports built into the system and would most likely not have a need for it.  I have just had several people request something like this who don't run the bigger accounting and project management software programs such as Timberline.

Give me some feedback on what would help you and your company to be more efficient every day.  You can even email me privately if you prefer.

Thank you,

Charlene S. Reed, Owner/Author

www.MyConstructionOffice.com

"Construction Administration Handbook"

PS -- check out my other blog: mymindwanderedtoday.blogspot.com  -- always interesting things happening there :)  recipes and tips.  Thanks,

Reading DCAA Audit Manual for Government Contracting

“The more that you read, the more things you will know. The more that you learn, the more places you'll go.” - Dr. Seuss

Staying up to date with your business planning and critical steps necessary to survive are more critical now than ever before.  Staying up to date with business practices and continuing your education in your field is very important.

A lot of people don't see a need to continue in education once they are in business and doing OK.  I have to say I agree with Dr. Seuss on this one.  I love to read (and not the Twilight series -- sorry Penny)  -- I have to read information books and I have a ton of them.  

My latest book is the DCAA Audit Manual (Defense Contract Audit Agency Audit Manual).  I know, you are thinking 'boring reading' but it will help me a lot in the long run and I don't mind the reading.  :)  It's actually not as dry as GAAP.

I've learned a few things about audits and how to pass an audit by the DCAA in government contracting.  I've also learned how to make Quickbooks DCAA compliant.  Pretty interesting.

The government is out to spend money still in contracting and so many other areas.  I attended a workshop here in Phoenix, AZ last week (several actually), and learned some new things about the SBA and government contracting.  There are so many programs that you can get involved in with the government.  

Business planning is a critical part of any business success and reading is an important part of planning.  Learn what your business needs and learn those things that you don't need but that would help you reach your goals to expand or grow your business.  

I try to push my clients to read and expand their knowledge all the time.  I am mostly successful -- only 1 that hates to read and would rather watch it on TV -- I guess I could take up reading on video for those clients -- hmmm, OK, maybe not.

Take the opportunity today to get a book on something that your business needs, something that you need to learn or something that you just want to learn.  Read everyday -- expand your knowledge.  

Charlene S. Reed, Owner/Author

www.MyConstructionOffice.com

"Construction Administration Handbook"

Vacation Time and Employee Benefits

How much vacation time do you have left that you need to use before year end?  How much can you carry over to next year?

If you are like me, you will still have quite a few days left that you haven't used and a lot of companies won't let you roll them over to next year.  You are quickly running out of time to plan and take your vacation time.  If you don't know your company's policy on vacation time and carry over, you will want to find out before you lose a lot of vacation time that you really should use.

Vacation time is actually good for you.  It gives you a time to get away and rejuvenate and be ready to come back refreshed and ready to tackle the tasks at hand again.

Plan some time away this year and enjoy it.  Some times just being able to stay home and rest is nice too.  

Now is also a good time to review all the benefits your company offers you.  You may be missing out on some great benefits that you could really benefit from.  One of the companies I worked for had some great benefits and people failed to take advantage to them most of the time because they were too busy working.

Some companies offer tuition reimbursement and you could take some classes that would make your job easier or help you get a promotion that you have been wanting.  Still other companies have on site training that will help you gain experience and knowledge.

Insurance is only a small portion of the benefits that companies can offer you as an employee.  Check with your human resources department to see what you are missing out on and get involved.

Whatever you decide to do, enjoy it.  You could also tackle some of your own projects at home or take up a hobby.  Do something that you enjoy to take your mind off work for a while. 

Charlene S Reed, Author

www.MyConstructionOffice.com

"Construction Administration Handbook"

Is There a Reason to Archive Your Files at Year End?

Archiving your files at year end is a good practice and helps you keep space open in your office for new projects and new files for 2013.

Keeping your files archived is much more than just moving out the old and adding the new.  You need to have a system so that you can find things when you need them again.

Now is the time to start looking at setting up your filing system for 2013.  You should have your file labels ready to be printed including files for:

• Accounts Payable
• Accounts Receivable
• Sales Tax reporting
• Journal entries
• Job cost reports
• Deposits and other credits
• Bank Statements for each account
• Benefits plans
• Licensing, Corporations and other regulatory files
• and so many other business files.

You should have a color coding system in your office for the various file types so that you can find them easier if they are misfiled or on your desk with other files and paper.

Setting up a filing system is time consuming but well worth the effort in the long run.  It is something that you will use all year long and be in and out of many times.  Make sure you are comfortable with the filing system.

You have less than 2 months left in this year so get your filing system set up for 2013 so you are not panicking and running like crazy come December 30th.

Charlene S Reed, Author

www.MyConstructionOffice.com

Costs In Excess and Billings in Excess

What does all of that mean and what does it have to do with construction?  Why does it matter to me?  

Well, let's look first at what it is and then the why it is important to know what this is.  

Usually, you will find these two things on financial statements of construction companies and other manufacturing companies where products are billed out - sometimes ahead of time and other times well after completion.

Construction line items are cost loaded and have subcontractors, suppliers, labor and other costs attached to them.  At any given point in time that you want to compare these two items, (usually month end, quarterly or yearly) you would need to know where your costs are at on that date.  You would then prepare your invoice to the owner or agent based around these line items and the costs that have been incurred to date.

At this same point in time, you will determine those items that you can and cannot bill for on each line and bill accordingly.  You may decide to bill for something that you know is going to happen within a few days if the owner allows for it or you may be faced with a situation where costs have been incurred but you haven't reached a milestone that would allow you to bill for that item yet.  

Invoices are prepared for all projects and sent to the owner and now things are at a point where you need to determine whether you have costs in excess of billings (CIEOB) or billings in excess of costs (BIEOC).  

Let's say you have 10 projects and they all have invoices prepared and the numbers are all calculated.  You now need to look at each job individually and decide based on total billings and costs to date including your earned revenue portion of each contract, whether you are paying out money you haven't collected yet or if you have collected money that you haven't earned yet.

It really is as simple as that -- if you haven't earned the money yet, you have billings in excess and if you have paid out more money than you have billed for, you have costs in excess.  

You need to understand how these affect affect your bottom line.  If you have costs in excess of billings, you will have this booked as an asset since it is money that is owed to you for work that was completed but not billed for or collected yet.

At the same time, you need to understand that if you have billed for or been paid for work that you have yet to complete, it is a liability since you 'owe' the owner for what he has already paid you for -- work that you have not done yet.

At the end of this exercise, you will take all the amounts that you are over billed and all the amounts that you are under billed and net the two amounts out to see what the adjustment needs to be against revenue.  There are sometimes other factors to consider such as deferred revenue, however, this is the simplest explanation of this fact. 

Some companies will have entries that are very simple and others will be very complex because they want to see what these numbers are based on costs centers or by states or any other way that they have financial statements prepared -- there are many options and ideas depending on what the owners or investors are wanting to see.

Whatever your company decides to do, you should understand what is behind the numbers and this is a good primer.  I have always used Excel spreadsheets to make these calculations quicker and easier.  If you need help with these calculations or understanding them, check out my book or contact me for assistance or an accountant where ever you are located.

Understanding where your money is at is critical for your company's survival.  This calculation is a key component.

Charlene S. Reed, Owner/Author

www.MyConstructionOffice.com

"Construction Administration Handbook"

Decisions, Decisions, Decisions . . .

Decisions are all around us - especially today.  Companies have so many decisions that they have to make in their business on a regular basis.  

Everyday business owners are faced with a barrage of business decisions, some are major, others not so much, but you do have to make them -- either today or someday soon.  The problem with waiting is it gets easier to make a rash decision that may not be well thought out although the same can be said about quick decisions.

When making decisions in business, you have to make educated, well thought out decisions based on sound business advice.  You need to face all hard decisions head on and get the necessary counsel from your company decision makers and hired professionals -- accountants, attorneys or business consultants.

I read a book several years ago and really enjoyed the read so much so that I bought the book again and re-read it - probably loaned my copy out and never got it back.  "The One Minute Manager" is an excellent book and well worth the read.

The message in the book is to deal with things as they are handed to you and not spending the time to handle the same thing multiple times.  A really good idea especially for those people who pile things up to deal with them "later" and then later never really comes until "crisis time" happens.  This is a bad time to make a decision - when you are under the gun so to speak.

Take the time to learn the skills necessary to prioritize your tasks and start dealing with things in a manner that makes your company the most efficient and most profitable.  There are many people who can coach you in the areas of business that you are lacking to make you the best you can be in business.

Today, I am practicing what I preach.  I stopped putting off the things that I have enjoyed and started doing them professionally.  I started blogging on my other blog again today with the first of many books and blog posts to follow.  Check it out.

No more procrastination for me or you !!

Charlene S. Reed, Author

"Construction Administration Handbook"

www.MyConstructionOffice.com

mymindwanderedtoday.blogspot.com

Invest In Your Company By Investing In Your Employees

How much do you invest in your employees?  How much do you value your employees and value retaining them in your company?

Whether or not you answer this question here and now, you have already answered this question with your actions and the worst part is that your employees all know your answer.  No decision is still a decision.  By not choosing to value your employees, you have chosen. 

If you value your employees and their retention, you must invest in them - more than their salaries, more than their benefits, and more than a year end party.

You need to invest in them personally, professionally and educational.  Personally invest in your employees by understanding when they have a family emergency.  For example, allow them time off when they have a funeral or death that doesn't count against their PTO or vacation - the rewards will last a long time in loyalty to your company.  Professionally invest in them by allowing them room to grow and advance in your company.  Don't give someone a huge title such as office manager or controller and have them sitting at your front desk answering phones (unless you have a one person office).  Give them what they need to advance and grow with your company. Educational investments in your employees will be beneficial in that employees who are kept abreast of educational requirements of advancements in the company are offered to them no matter what position they hold.  Everyone needs to know that the opportunity for growth and advancement is available to them.

Companies that maintain quality, long term employees know this and practice these traits.  They know that retaining employees makes their company stronger in the marketplace.  Customers don't like change in staff occurring over and over either.  Keep your employees happy and they will keep your customers happy.

Investing in your employees could be as simple as bringing in someone to teach a few times a month for an hour or so over lunch on things that bring your company quality service, safety, document management or any of hundreds of topics  to advance your company.  I do this with my business for several companies where I go in and teach skills to people in small (2-3 people) to large groups (35-40 people).  Depending on what the company needs, I have done one on one training as well.

There are many things that you can do to show employees that you care about their future with your company without spending a small fortune.  Realize that people have families and personal lives, care about your people and they will remember that you cared when most other companies wouldn't have cared.  I'm not saying let your employees use you, just remember they are people too and not just numbers on time clocks that should act like robots in your company.

You will see in many companies that have long term employees, it is because the company treats their employees as if the company couldn't run as well as it does with out them.  Never tell your employees that you could do everything without them - that doesn't build employee loyalty.  Let them know they matter. 

Charlene S Reed, Owner/Author

www.MyConstructionOffice.com

"Construction Administration Handbook"

Understanding & Application Are the Tools of the Wise

"No amount of reading or memorizing will make you successful in life. It is the understanding and application of wise thought which counts." - Bob Proctor

Understanding the art of business is far more important than degrees hanging on your wall.  Having a degree is a great thing and I will be glad when I complete mine so that I can get another degree.  

However, I have run into a lot of friction lately because I haven't completed my bachelors degree even though I know most every aspect of running a construction company including accounting, estimating and project management.  

I have also held positions as an Operations Manager of a construction company and Practice Administrator for several physicians groups and a pharmaceutical research company.  

I have been the Controller for 2 construction companies, Senior Accountant for a large construction company and owned my own business for over 10 years.  What's the deal?!?  Why can't I get hired for a position without a piece of paper?

My thoughts on the whole thing are that the job market has tightened up so much so that people can make requirements be whatever they want them to be.  The biggest problem with this thinking is that you may get someone who can pass a test but do you have someone who can do the job?  

It never hurts to ask for a degree when you are hiring someone but I don't think a degree tells you whether or not a person can take you where you want to go in your business.  You need someone who understands AND applies that knowledge to the things that are important in your business.

I know I will be glad when my degree is done but for now -- I must get back to work.

Happy Friday !

Charlene S. Reed, Owner/Author

www.MyConstructionOffice.com

"Construction Administration Handbook"

Background Checks Would Have Saved Over $500,000.00 in Loss

Does your company perform background checks on new employees?  Yesterday, I blogged about drug screening for all new employees, random drug testing and post incident/post accident testing.  Both drug screening and background checks are important to your company's success.

You may not think that a background check will make a difference but let's visit a few scenarios that could have been prevented had companies done their due diligence.

Company "A" hired someone referred by a friend who knew someone and could recommend them for a position.  This person was hired as an Accounting Manager/Office Manager.  Gaining the owner's trust was relatively easy for this person since she had a convincing personality and was fairly knowledgeable in accounting procedure.

Skip ahead over 3 1/2 years to when the owner of the company received a phone call on a nice and quiet Sunday afternoon from a major credit card company and you can probably figure where this is headed.  Many hours later and a lot of digging proved several things:

• The company had been taken for well over $500,000.00 through several fraudulent schemes,
• The credit card company had issued several cards to this employee based on forged documents for hundreds of thousands of dollars in charges paid by the company,
• The employee had forged the owner's names on checks payable to herself for thousands of dollars,
• The bank statements and check thumbnails had been altered or replaced on the statement copies in the office,
• Bank electronic funds transfers were made to pay the major credit card bills incurred by the employee under the company name,
• Accounting records had been altered to change how things were paid and who they were paid to,
• Company accounts for cell phones, gas cards, business supplies and other accounts had been used by the employee for personal use to purchase items for herself and her family.

Had Company "A" done the background check, they would have found out that several companies had suspected this type of behavior but it wasn't a lot and it wasn't worth dealing with and they just terminated her.

There were also public records available for a forged check charges and other charges that would have indicated that this is not a person that you want to trust with your money and accounting.

There were quite a few other things that this company did wrong in this scenario such as poorly supervising this employee, not having controls in place to monitor and track expenses and checks, not opening their own bank statements and credit card statements, and not reviewing their financial records and statements carefully with an outside auditor or accountant and so many more.  

Now, Company "B" hires a friend of the family to work for them and never does a background check.  In this case, the background check wouldn't have showed anything since she was young and had no background, and after all, she was a friend.

However, being left with little to no direction and little to no supervision, an owner who didn't understand the finances of his company, and several other issues including the economic downturn in construction, it wasn't long before theft and embezzlement started along with forgery.

In the case of Company "A", a background check would have been great.  In the case of Company "B", not so much however, it may have showed the employee was having a lot of serious financial issues which would make it more enticing to have someone else pay for the fuel, food, etc. when funds were short.

In either case, the company should have had better controls in place.  In my business, I have seen this a lot and on the increase over the past 4 or 5 years.  Even more now than ever before, your company needs to perform background screening on all new hires and you need to make sure that your company has controls in place to minimize the risk of loss by forgery, embezzlement, fraud and theft.  My book covers a lot things that would help companies minimize or do away with these types of crimes against companies.

Get your controls in place and get background checks done on all new hires in your company.  Get a policy in place to make this part of the new hire packet and enforce it against all new hires including your 'friends'.  

Make no exceptions ! !

Charlene S Reed, Owner/Author

www.MyConstructionOffice.com

"Construction Administration Handbook"

PS:  Yes, she was convicted and spent several years in prison and no the company didn't carry employee dishonesty coverage as part of their general liability insurance package.

Does Your Company Have a Drug Policy?

Every company should have a strict drug policy in place including new employee drug screening, random drug testing and, of course, post incident or accident drug testing.

A well written policy for drug screening upon employment is the first step in a good company plan to protect yourself and your company from loss.  Screening all new hires should not only be good for your risk management but will also go a long way in protecting your bottom line against losses.

Random drug testing should be performed 'randomly' and you should not single out employees based on unfair criteria.  Fortunately, you can establish the criteria and you can determine how you will choose who will be drug tested in a pool of employees and how often you will do these random tests. 

For example, you could specify that employee names will be randomly selected from a list of 'all' employees on a quarterly or monthly basis and then you could set up a random number generator in Microsoft Excel with the RAND function in a spreadsheet and keep copies of all random selections for your records.

  

Record keeping is also very important and you should have a separate file for all employees for health related records.  The 'Construction Administration Handbook' explains the need for 3 separate files for employees (and the I-9 should not be filed in any employee files).

Using the same facility all the time for screenings will help you get a better pricing structure and will also provide you with the same standards for results.

Other than random screening, you should also have a policy for post incident and post accident testing.  This policy should be strictly adhered to and should include alcohol and drug screening.  Your insurance companies, general liability, auto and workers comp,will all want to know that you perform these tests immediately following incidents and accidents.

Make sure you have any policy reviewed by your legal counsel so that you are safely within the guidelines of employment law.  Don't wait until something happens to start testing, you could lose a lot more than the money that you will pay to the attorney to put this policy in place.

If you don't know where to start on policy and procedures for your company, contact myself or someone who can help you get these in place as soon as possible to avoid loss of money, health or even worse, some one's life.

Protect your company by getting these in place today.

Charlene S Reed, Owner/Author

www.MyConstructionOffice.com

"Construction Administration Handbook"

Project Managers Must Understand Project Accounting

Project Managers are tasked with overall project planning and scheduling, resource allocation, project accounting, control, technical direction and ensuring compliance with quality standards to meet all deadlines and budgets.

All of that to say, project managers are more than superintendents who wanted to come in out of the field and work in an office environment.  Not to say that superintendents can't or shouldn't be brought in to the office, just to say that a person who is given the title of "Project Manager" needs to have all the traits and education of a true project manager.

Project Managers need to understand the dynamics of their project budget and the accounting including: 

• Project overhead costs,
• Corporate overhead percentages,
• Labor burden rates,
• Costs to operate equipment,
• Resources that will be used on the project from the corporate office (safety, O & M Manuals, Warranty Manuals, vehicle maintenance, Submittals, etc.)

Where I see the most revenue spent that is improperly tracked is labor, equipment and soft costs.  Project Managers must also consider the soft costs on the project including:

• Insurance (General Liability, Auto, Umbrella, Professional Liability, etc),
• Legal Costs and Fees,
• Financing costs,
• Engineering and Architectural fees,
• Pre-construction expenses including bid costs,
• Post construction costs and warranty items.

Project managers also need to understand the billing for their projects and be able to bill by percentage, amount complete and project for trades that will complete items by a specific day or date. Many project managers can tell you what is in place at the job site but have no idea what that equates to in project line item dollars.

Using a program such as Microsoft Project or Primavera Suretrak will allow you to not only keep a project schedule up to date but will also allow you to put dollars to those time lines which will change as your schedule changes -- as long as it is kept up to date.

Construction companies need to have regular accounting meetings with their project managers to go over the schedules, budgets and expenses of all projects to ensure customer satisfaction and company profitability.  Companies that don't have regular project manager/financial meetings will not survive when even 1 project goes bad.  

How long can a company survive with just 1 project that is behind schedule and costing them in extended conditions that are not reimbursed by a customer?   How deep are your pockets?

Charlene S Reed, Owner/Author

www.MyConstructionOffice.com

"Construction Administration Handbook"

What is Your Business Plan? Is It Written, Current and Complete?

A business plan should reflect your plan for the next year, the year after that and all the way through the next 5 years.  Business plans are a critical part of your business and are required in some federal government programs.

Things change during the progress of a business. Business plans should be adjusted to reflect those changes on a regular basis. New goals should be set, new marketing plans and your financial data and projections must be included as well.

Items that are usually included in your business plan are:

• Introduction to the company (an overview),
• Company description,
• Personal financial statements for all owners or shareholders,
• Company financial statements,
• Cash flow projections for the next two years,
• Profit and loss projections for the next two years,
• Break-even projects,
• Sales projections and revenue forecasts,
• Marketing plan for the next 2 years including advertising plan, 
• Fixed costs forecasts,
• Loans and repayment plans,
• Projections of product developments, wholesale sales, manufacturing projections or project development projections, depending on your business type,
• Facilities that you are working in -- description and status (rental or owned, outstanding loans on property, etc.)
• Market research into development or projects,
• Description of services or products,
• Management bios and position held in the company,
• Patents, copyrights or other ownership rights, 
• Capital spending plan,
• Business Accomplishments,
• Competition in your market and market growth projections,
• Owner's ability, experience, education, and background,
• Business Risk Analysis or a Major risks you face in your business and a plan to deal with these risks should they arrive,
• How and where you will find qualified employees for your business,
• Resumes of key personnel and owners.  

If you are looking for funding, you would want to include this request in the business plan as well.  You will need to explain how much you are requesting, how it will be utilized and a re-payment plan.

Your business plan should be tailored to fit the reason you are preparing the plan.  If you are preparing the plan for yourself, you will include details that you would probably not want released to the general public.  

If you are preparing the plan as part of a federal government program such as the 8(a). Economically Disadvantaged, women owned, service disabled, veteran owned, small business or other programs, you will want to make sure it fits their requirements.

Whatever your reason for preparing your business plan, make sure you know what is required to be included.  If you don't know or don't have someone who knows how to prepare one, get in touch with someone who can help you get your business plan completed and who understands what is required in the different situations.

Whatever you are doing in business, get a written business plan in place today.

Charlene S. Reed, Owner/Author

www.MyConstructionOffice.com

Safety is Every One's Business

Safety is critical to any company's survival.  Accidents and injuries can impact your company in more ways than just lost work time.  Your workers compensation insurance company will increase your premiums and you could be placed into an assigned risk pool if your company has too many incidents or injuries.  

An assigned risk pool will nearly double your average premiums for workers comp insurance if you are forced into one.  Not only would you pay a higher price for workers comp but you could be forced to pay for lost time to workers who are injured and not able to work and for medical expenses in some cases. 

Every company needs someone in charge of the safety of your workers both on and off the project sites.  No matter the size of your company, you should have at least one person who is responsible to keep everyone up to date on training and safety.

You may choose to out source your safety program, in which case, someone in your company will need to make sure that people are being scheduled for training and attending.  Whatever your company decides to do, make sure your employees are properly trained and that they are adhering to the prescribed safety standards.

You should have employees trained in either the 10-hour or 30-hour safety training.  Every construction job site should be having weekly on site training or "Tool Box Talks".  Every other type of business should have weekly safety meetings pertinent to your specific business type.

In construction, you should also have a person on site, whether it is your superintendent or a safety director, who 'patrols' the site while anyone is working on the site, who watches to make sure there are no safety violations happening.  If there are safety violations occurring on site, they should be stopped and noted, with violation notices going to the company who violated the safety policy.

In other business types, you should have someone on site that watches employees, visitors and customers for violations or unsafe conditions.  Unsafe conditions should be corrected or taped off until corrections can be made.

Safety is every one's business in any business.  Making sure your company, it's employees, visitors and customers are in a safe environment is your business and failure to adhere to safety in your business puts your company at serious risk of loss.

Get your safety plan in place today -- don't wait until something happens and you suffer loss or worse some one's life is changed forever due to an avoidable accident.

Charlene S Reed, Owner/Author

www.MyConstructionOffice.com

What is Your Disaster Recovery Plan? Does Your Business Have One??

Do you have a Disaster Recovery Plan in place in your company?  Does your staff know what it is and what to do to keep it up to date?  How long can you go without your company's data and survive?

If you lost all of the data on your server and all of your project files,  how would you survive?  Could you piece together how much is owed to you and who you owe?  What about employee records and payroll information?  Your business and your income could suddenly cease to exist.

A disaster recovery plan is a necessary part of your business and is only as good as the person or people who keep the plan up to date.  What and where is your plan?  Do you have one in place?  If not, you are taking a huge risk and stand to lose more than just time away from your business.  You stand to suffer a huge financial loss.

What happens in your business if disaster strikes?  Flood, fire, hurricane, tornado, theft, server crash, or any other disaster that would otherwise destroy your records.  You need to have a plan in place in case of a disaster so that you can restore your data and your business back to what it was prior to the disaster so that you can continue to go about business as usual.

You should at the very least have a back up copy of your data off site.  You should have a scheduled back up time, preferably daily of your data files and you should have a way of verifying the validity of your back ups to be sure you have a viable back up away from your primary place of business.  

If you don't have someone on site to do your back ups daily, you might want to look up a company that can do it for you and get it set up.  There are plenty of companies that will get you set up in the 'cloud' so that your back ups are happening.  There are other advantages to cloud computing such as access to your data files from anywhere and the fact that they back up to redundant servers in different geographic locations of the country.

Timberline, Quickbooks and other accounting software should be backed up everyday regardless of any other scheduled back up you have in place.  Get our disaster recovery plan set up today.  Don't waste another day with the fear of disaster looming over your business.  

Take the time today to get your business disaster recovery plan in place.

Charlene S Reed.Owner/Author

"Construction Administration Handbook"

www.MyConstructionOffice.com

Daily Reports Are a Legal Document

Why do daily reports daily on your projects?  There are several reasons why daily reports should be done daily.  The most important reason is that these are legal documents and should be done the day that they are dated and signed by the person completing them.

Daily reports are critical and should be maintained as part of the project files even after the project is complete and for the period following the longest warranty on the project or until all issues on the project, including lawsuits, are resolved.

Some of the items that need to be included on every daily report are:

• Date and day of the week (Monday, Tuesday, etc.)
• Temperature and weather conditions (cloudy, rainy, etc.)
• Name and location of the project
• Project number as assigned by the home office and other identifying numbers from the Architect or Owner
• List of subcontractors on site and how many workers from each company
• Visitors to the site and what they were there for (IE: meeting, inspections, etc.)
• Inspections or testing performed by your company or others on site
• Working hours on site (some projects require that you keep track of all hours worked by all employees and a cumulative total on the project - mostly Government)
• Deliveries to the site or pick ups from the site - materials or equipment -- if equipment is called off, you need to note the call of number for future reference
• Safety items or issues, warnings or citations
• What work was performed and what needs corrected or completed
• Correspondence received or sent, including safety notices or 24/48 hour notices, etc.
• Any photographs taken should be noted and labeled
• And any thing else that happened at the site.

The report, once completed, should be signed by the person completing it and scanned into the project file or have an electronic signature attached to it and filed in the project file.

Some software will allow you to customize reports or documents such as Sage Timberline.  Timberline custom reports can be developed to track the things critical to your company's success including daily reports.    

In a legal proceeding or in any issue where weather or other delays take place, these records will prove invaluable to your cause.  Make sure these are done daily by your team on all projects.  

You or someone on your team needs to make sure that these important documents are completed on a daily basis and that someone is reviewing them for accuracy and completeness.  

Don't let anyone save them all for the end of the week because important details will be lost.  I find that about 75 - 80 percent of the companies that I work with will allow their superintendents to wait to complete them until they have "spare time" -- this is a very bad habit and bad habits such as these can cause your company to fail or lose contracts, bonding, money or your reputation.

Establish a policy and procedure for completion of your daily reports and make everyone accountable for their duties in the process.  Don't allow these 'little things' to become big issues in your progress.

Daily reports are something that I stress heavily in my book and I can't say it enough, you need to be sure your company is staying on top of document management.  If you need help in these items, contact myself or someone else to get the help you need.  Don't put your income and company at risk of serious loss or failure.

Choose to succeed -- Document EVERYTHING ! !

Charlene S Reed, Owner/Author

www.MyConstructionOffice.com

Reports Your Business Needs to Review Regularly

"Successful people form the habit of doing what failures don't like to do. They like the results they get by doing what they don't necessarily enjoy." - Earl Nightingale

No one enjoys reviewing reports and running through mounds of papers to try to make sense of where your company is from 10 or 12 different reports.  We just want to be told in one page or less that things are great !  So many software packages are lacking in this area while others have a custom dashboard such as Timberline.  If you are using Timberline and don't have the dashboard set up, get it set up.  With some tweaking, you will be well pleased.  

That being said, there are some reports that you cannot get away with not seeing on a regular basis.  A list of the reports that you, as a business owner or department manager, should see on a weekly basis are:

• Accounts Payable Report with Aging,
• Accounts Receivable Report with Aging,
• Job Cost Reports for all jobs individually and collectively,
• Updated Job Schedules for all jobs,
• Cash requirements report (projected cash requirements report), 
• Check Registers for all accounts,
• Correspondence (If you don't see it everyday),
• Status reports on any legal issues.

Other reports that you need to review on a monthly basis (at a minimum) are:

• Budget vs. Actuals,
• Monthly progress and goals reports,
• Marketing and business plans,
• Bank Statements (Including canceled checks or thumbnails),
• Financial statements (Balance Sheet, Income Statement, Trial Balance),
• Cash flow projections for the next 6 to 9 months,
• Projects list - completed, pending, bidding, current, negotiating and new prospects,
• Bond capacity and availability.

These reports would be a minimum list for review and you can do these as part of a meeting with your staff or prior to meeting with your staff.  Every company should evaluate where they are on a monthly basis so that they are informed and so that they can make informed decisions when looking at future projects, purchases or other expenditures.

Laying out these rules for yourself and your staff will set up good habits that will prove successful for your company.  Without setting up standards for your business, you risk certain failure at your own hands.  

Ensuring that your staff meets or exceeds these standards will help you in planning for future growth.  If you need help with setting up these types of reports or systems, please call someone.  My company does this type of set up and reports for all types of companies including construction, retail, medical and legal.  The book I wrote earlier this year is for construction companies and can be found on my website.  

Pull your calendar for the next 14 months (now through the end of 2013) and start planning your meetings and on what days you want to get your reports to review prior to those meetings.  Don't let bad habits ruin your company, you have too much invested into it already.  Start today forming good habits for success.

Thank you and please share your thoughts and reports that you would add to the lists above.

Charlene S Reed, Owner/Author

www.MyConstructionOffice.com

PS:  Now is the time to get with your CPA to do year end tax planning if you haven't already.  Call today and make that appointment to maximize your tax savings NOW.  Don't delay, there is just over 2 months left in this year.  

Procrastination -- Putting Off Until Tomorrow What You Should Have Done Yesterday

"Do you know what happens when you give a procrastinator a good idea? Nothing!" - Donald Gardner

You probably at least smiled at this comment but procrastination in construction is no joke.  If you put off till tomorrow something that should have been done yesterday or today, you could pay a hefty price tag for waiting.

Not understanding or knowing what to do is even worse.  A lot of times people put off doing things that need to be done because they aren't sure what to do in a situation.  It's easy to lay aside those things that we are most uncomfortable doing, those things that are not easy. 

What are you putting off doing today?  What will it cost you if you wait too long to do it?  Why keep putting it off when you can dive into it and do it now?  

It seems like almost every office I walk into, there is something there that no one wants to do, sometimes several things.  In a lot of cases, those things that get stacked by the wayside have due dates on them and since no one wants to touch them, no one sees that the dates are closing in or have passed.  

Stop procrastinating now !!  Go get that stack of 'stuff' that you've been putting off and go through it, prioritize it and get it done.  If you can't get all of it done, then delegate or ask for help.  Once those things are out of the way, you can focus on other more important tasks at hand without those things hanging over your head and clouding your mind.

One reason I like using MS Outlook is the task list.  You can also assign reminders to the task list and you can check them off once they are completed.  Learn to schedule your tasks, even the ones you don't want to do, on your calendar or task list in Outlook so that important items don't get lost in your office.

Office procedures can be learned and in my company I find that I teach people where their priorities must lie to avoid or minimize the risks associated with running a successful business.  In my book, the "Construction Administration Handbook", I teach you what you need to know in construction including accounting, contracting, project management and documents management.

Prioritize your duties now, get those things done that you've been putting off.  Then enjoy your day doing the things you enjoy.

Charlene S. Reed, Owner/Author

www.MyConstructionOffice.com