We Can Help - contractors like you make use of the Five Key Performance Indicators (KPI) QuickBooks reports that can massively improve your financial future with good solid construction accounting methods. Or you can continue to repeating your history and keep getting what you have always gotten. That may sound a bit harsh and it is because I sincerely care about you, your future, your family and your employees. The answer is in proper and professional construction accounting.
Whenever A Supplier Or Vendor - Offers you a discount for paying your monthly statement by the 10th of the following month it can mean some serious Return On Investment, R.O.I
For Example 2/10 Net 30 - Is shorthand for "If you pay the statement by the 10th of the following month we will allow you to take a 2% discount". Doesn't sound like much does it?
First Understand The Offer - From a construction accounting point of view. Your construction material supplier sends a monthly statement offering you a 2% discount if you pay the amount due by the 10th of the following month or you can wait and pay the full amount due on the 30th of the following month.
Next Do Some Fast And Easy Math:
Your supplier sends a statement for $1,000.00
You can pay $980.00 by the 10th of the month or you can "borrow" $980.00 for 20 days (Borrowing Period) and it will only cost you $20.00
There are many ways to calculate interest but for this example we are using a very simple method called the "360 day (Interest Year)" which means five days of the calendar year will be interest free.
Divide 360 days (Interest Year) by 20 days (Borrowing Period) = 18 (Borrowing Periods)
Check the math by multiplying 20 (Borrowing Days) X 18 (Borrowing Periods) = 360 Days
Calculate the annualized interest rate on this loan and it becomes 2% X 18 = 36% Annual Interest Rate
This is similar to how the check cashing stores operate and I am not saying it is good or bad.
I am only showing you this as more evidence to back up my claim: "The real money in construction is made in the office; not in the field". – Randal DeHart
You Always Have A Choice - Be right or be rich! I have shared this with thousands of contractors over the years and the vast majority of them will say one of the following:
"Wow! This is another one your great ideas, thank you!
"2% is nothing!"
"It's not worth it because I earn 8% in other investments!"
"I don't have enough cash available until I get paid from the prime contractor!"
Success And Failure In Construction - Is the result of two different habits. Failure is a few errors in judgment repeated every day. Success is a few simple disciplines practiced every day.
"If The Grand Strategy Is Correct - The enterprise will prove successful; however, efficient operations cannot overcome bad strategy" - Paraphrased from Sun Tzu.
Contractors Deserve - To be wealthy because you bring value to other people's lives! Consider letting us help you find ways to accumulate wealth by applying the principles of construction accounting and contractor bookkeeping that we have developed. Nothing needs to change in your day to day operations in order to take advantage of this opportunity and in fact you do not need us to implement this. Just know that everything we share freely in public and on the web is only the tip of the iceberg of what we can do for you!
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