The U.S. Department of Commerce reported in a recent news release that construction spending nationwide topped $1,180.2 billion in January. But despite this astronomical figure, those in the business of building don’t always pocket the money due them as speedily as they’d like. Too often, the accounts receivable column bleeds red, long after a contractor has billed the customer.
The good news is – employing certain tactics can go a long way toward stabilizing cash flow, ensuring that business owners have money on hand when they need it. Experts suggest the solution rests in organized accounting practices, efficient invoicing and attention to last-minute details.
Taking Matters into Account
Simply put, good record-keeping serves as the foundation for a robust accounts receivable column. The process begins with getting a clear read on overall revenue patterns – for both income and expenses. Unfortunately, harried business owners – especially those with small or medium-size construction firms – sometimes place accounting chores last on their to-do lists. This habit can contribute to stunted or erratic cash flow.
To avoid shortfalls at critical operational points, industry analysts offer these basic guidelines: