In the heat of day-to-day operations, it's common for contractors to put financial management on the back burner. However, neglecting the books can have far-reaching consequences beyond dollars and cents.
In this episode, Ruth King, well known as the “Profit and Wealth Guru”, joins Khalil and Martin to discuss profitability and the role of accurate and timely bookkeeping in making informed business decisions.
Time Stamps
- 01:38 - Luca Pacioli & Bookkeeping
- 04:26 - The Role of Bookkeeping to Contractors
- 07:44 - Ruth's Entrepreneurial Journey and Business Ventures
- 10:21 - The Role of Bookkeeping in Detecting Fraud
- 15:12 - Revenue Generation
- 15:38 - The Importance of Billable Hours in Construction
- 18:08 - Calculating Billable Hours
- 25:14 - Warning Signs of a Cash Flow Crunch
- 27:45 - Challenges in Managing Inventory & Deposits
- 31:21 - Understanding Deposits and Inventory Management
- 35:23 - The Importance of Hiring Qualified Bookkeepers
- 37:12 - How to Get Out of a Cash Flow Crunch
- 39:37 - The Financially Fit Business
- 40:40 - Signs of Financial Statement Inaccuracies
- 42:03 - Using Software in Financial Management
- 46:41 - The Foundational Role of Books
- 50:28 - More from Ruth King
- 52:17 - Outro
Quotable Moments from the Show
- "In our industry, in construction, we generate revenue through billable hours. If you do not have a billable hour, you don't have revenue." - Ruth King
- "Decreasing current ratio should be the greatest warning sign to you that there is a problem with productivity. There's a problem with profitability. Figure it out or get help. One of the two." - Ruth King
- "It's [Bookkeeping] actually easier to do than all the technical stuff you learned. Period. It's just we weren't trained in it. We weren't taught it. We didn't take it in school." - Ruth King
- "I've been in business for 50 years now and I have never seen a business thrive without books. Ever." - Martin Holland
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Resources
- AIPB Bookkeeping Hiring Test
- Need Marketing Help? We Recommend Benali
- Need Help with podcast production? We recommend Demandcast
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What is The Cash Flow Contractor?
If you’re like most contractors we know, then you started your business because you’re passionate about and great at your craft. You also wanted to be your own boss. Owning a business has a lot of advantages, but also a lot of challenges.
We started this podcast to talk about things that matter to you as an owner, like business fundamentals, sales processes, marketing, leadership, and much more. Armed with knowledge, you’ll be able to reach your goals, whether that’s growth, getting your shop to run without you, or anything in between.