TAG, Southern California's leading provider of outsourced accounting and software solutions for the construction industry, hosts Construction Financial Management Series to Accelerate Business Productivity. Review and the use of balance sheets, income statements and work-in-progress reports.

1. www.teamtag.net
Understanding Construction
Financial Statements
Workshop #1
January 30, 2014
Presented by Rob Scherer

2. Construction
Financial
Management Series
•
Six-Part Series to Cover Best Practices in
Financial Statements, Job Costing,
Construction Software and other Critical
Accounting Areas.
La Jolla, CA – TAG, Southern California’s leading
provider of outsourced accounting and software
solutions, along with the San Diego Chapter of the
Associated General Contractors (AGC) announced
the launch of a six-part series on Construction
Financial Management beginning in January 2014.
Robert Scherer, President of TAG will share his
financial expertise during each module of the
information-rich series. The courses will help
building industry executives and finance
professionals become more familiar with the best
practices and procedures in integral areas such as
accounting, budgeting, financial planning, banking,
bonding and construction software systems for job
costing, project management and tracking.

3. Beyond the Numbers…
TAG provides valued financial and business resources &
counsel for companies and individuals on the move.
TAG supports and strengthens your company’s accounting department
and management with outsourced bookkeeping, controller, and CFO
services.
Whether you are a CFO who could use a quality controller once a week,
a controller who needs bookkeeping assistance, or an office manager
looking for higher level finance and accounting oversight, TAG can fill
the need.
From sales to implementation, training to consulting, TAG’s team of
certified consultants work to improve your efficiency and reporting
capabilities with the best accounting software for the building industry.
TAG is an Authorized Reseller with a team of Certified Consultants for:
•
Sage 300 Construction and Real Estate (Timberline)
•
Sage 100 Contractor (Master Builder)
•
Sage Estimating
•
Contractor V

4. January 30, 2014 - Understanding Your Construction
Financial Statements
February 27, 2014 - Job Costing & Accounting
March 27, 2014 – Banking & Bonding Management
April 24, 2014 – Tracking your Field Production
May 29, 2014 – Best Practices in Construction
Accounting Software
June 26, 2014 – Construction Financial Management
Boot Camp

5. Association of General Contractors – San Diego
www.teamtag.net

6. Purpose:
The overall purpose of today’s workshop is to review
the key components of a Construction Financial
Statement:
Balance Sheet
Income Statement
Work-In-Progress

7. TAG presents at the AGC San Diego Chapter
Robert Scherer, President of TAG teaches “Construction Financial
Management” series for the Association of General Contractors.
www.teamtag.net

8. A Balance Sheet is a snapshot of the company’s
Assets and Liabilities valued as of a specific date.

9. Current Assets
Cash
Accounts Receivable - Trade
Accounts Receivable - Retention
Costs in Excess of Billings (under billings)
Prepaid Expenses

10. Fixed Assets
Machinery & Equipment
Office Fixtures & Furniture
Field Vehicles
Leasehold Improvements
Less Accumulated Depreciation
Other Assets
Deposits
Other Long-Term Assets

11. Current Liabilities
Accounts Payable - Trade
Accounts Payable - Sub
Accrued Wages & Benefits
Billings in Excess of Earnings
Line of Credit
Current Portion of Long-Term Debt
Long-Term Liabilities
Long-Term Debt
Less Current Portion

12. Owner’s Equity
Common Stock
Retained Earnings
Current Year Income/(Loss)

13. An Income Statement provides a measure of the
operating performance of a company for some
particular period of time.

14. Billings and Revenue
www.teamtag.net

15. Billings and Revenue
Direct Job Costs - Material
Direct Job Costs - Labor
Direct Job Costs – Sub’s
Direct Job Costs - General
Direct Job Costs - Equipment
Indirect Field Costs
General & Administrative
Other (Interest Income/Expenses)

16. Construction Income Statement Example
Robert Scherer, President of TAG reviews the use of balance sheets,
income statements and work-in-progress reports.
www.teamtag.net

17. A Work in Progress is an overview of the
company’s job activity for the current fiscal year.
A Contractor’s WIP calculates the percentage
completion of each job, and provides the underand overbillings totals entered on the Balance
Sheet.
It should also reconcile to revenues and costs on
the income statement.

18. Basic Information From WIP
Costs & Earnings in Excess of Billings (Asset)
Billings in Excess of Costs & Earnings
(Liability)
Comparison of Open & Closed Jobs
Backlog of Work
Gross Profit Analysis by Job
Underbillings “Flag”
Comparison of Jobs by Location, Estimator,
Project Manager, Division, Type, etc.

19. Robert Scherer, President of TAG
www.teamtag.net

20. KPI’s for Construction Financial Management
“Cash is King” Rule of Thumb.
www.teamtag.net

21. Key Performance Indicators
Cash
Working Capital
Current Ratio
Underbillings as compared to Overbillings
Gross Margin % Trends
Indirect Field Cost as a % of Overall Field Cost
Backlog in Months

22. January 30, 2014 - Understanding Your Construction
Financial Statements
February 27, 2014 - Job Costing & Accounting
March 27, 2014 – Banking & Bonding Management
April 24, 2014 – Tracking your Field Production
May 29, 2014 – Best Practices in Construction
Accounting Software
June 26, 2014 – Construction Financial Management
Boot Camp