Managing Cash Flow in the Construction Industry Part 1
Although generating revenue for your construction business is always a primary goal, the irony is that many contractors struggle with the accounting and billing side of managing their business. Chances are, if creating and managing cash flow is constantly on your mind, you’re struggling at it.
In this two-part article, Birmingham construction lawyers will discuss a few ways that poorly executed accounting practices can set back your business. At Cotney Attorneys & Consultants, we are not only intimately familiar with the legal aspects related to construction work, but our attorneys also know how to bolster the bottom line of construction businesses. We do this with a variety of services like navigating our clients through the bid process, assisting with corporate transactions, protecting intellectual property, developing ironclad employment contracts, and offering tax advice, among other legal services. Contact our law firm today to reduce risk and save money with a subscription plan.
Navigating the Bid Process
The bid process presents many challenges. Submitting a bid can be highly political, extremely technical, and there are a lot of regulations in place in order to qualify. Another issue is that a poorly executed bid can impact your business. For example, if you don’t have the resources in place or you can’t execute the work to the standard presented in your bid, this can destroy your reputation overnight. With that being said, there are also serious financial concerns when firms bid on projects.
You Need Accurate Bid Estimates
Although overselling yourself can be a concern, underselling your price points can be just as damaging to your business. You can easily win a bid on a losing project. If you fail to properly assess the profitability of the project during the bid process, your business could end up taking a huge loss because your price to perform the work was too low. It’s crucial that your bids are precisely calculated. You never want to reach the project completion date and be unsure of whether or not the project was a profitable endeavor.
If you fail to appropriately measure the profitability (or loss) involved in a project until the work is completed, this can impact future projects and compromise the backlog of projects waiting in the wings. For all of your project needs, including placing effective, competitive bids on projects, consult the Birmingham construction lawyers from Cotney Attorneys & Consultants. For more information on managing cash flow in construction, please read part two of this article.
If you would like to speak with a Birmingham construction lawyer, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.