3 things to do today to manage your budget: Monthend | Episode 11
Chris Anderson, founder of Monthend in Minneapolis, Minnesota, joins us on The Building Code podcast for a financially focused episode.
Chris was a partner and CFO of a building company, where he met Buildertrend after “flirting” with other software tools. As he struggled to find a way to make his business run more effectively, Buildertrend turned out to be just the tool to make that happen. After 10 years in the building biz using our platform, though, Chris decided his true passion was helping other builders through consulting – which is when Monthend came to be..
The team at Monthend consists of CPAs, bookkeepers, data specialists and Chris, the Buildertrend expert – all people geared toward helping builders with the financial side of their companies. While the builders focus on building, the team at Monthend focuses on the numbers, and everyone focuses on doing what they’re best at.
“How much money am I making or losing, and how did that happen?” is just one of the questions that brings people to Monthend. Chris’s suggestion to customers with this issue is putting systems in place built between Buildertrend and accounting. “You have a complete map that tells you exactly why or how you lost money, and if you’re doing the accounting right, then you can fix it.” Chris explains. In many cases, it’s not that builders want to ignore the accounting or put off putting systems in place – they’re just too dang busy! And they unfortunately have a mindset that accounting is a cost center … it costs more money to have an accountant. But, in reality, if they paid for someone or something else to take care of it, their profits could actually increase.
So, what can construction business owners do today to better manage their finances? Here are Chris’s tips:
- Plan, plan, plan. Have a good plan before your business even starts, and then once it’s up and running, keep planning! Plan on an annual or project-by-project basis – whatever works best for your business, and just be sure to do it consistently. Whether it’s on a spreadsheet or through a tool like Buildertrend, craft plans for how much money you want to make, how many projects you want to complete, etc.
- Always measure your success. So, you have your goals set, but how do you plan to know if what you’re doing is meeting your goals? Now’s the time to measure your executed plans to see if you’re actually moving towards your goals. A lot of builders may also find value in measuring their cycle time. How long does it take from digging the first hole in the ground to cleaning the place and being completely done? Identify your KPIs early on and follow through on them.
- Be able to adjust. It’s no secret that nothing is ever going to go completely as planned, especially in this industry, so you have to be ready for that. For example: If you work in Minnesota, you might want to break ground in May, but who knows if you’ll be able to because of lingering frost. The ability to adjust in a situation like this will do wonders and keep your project moving forward.
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