Common Financial Mistakes Construction Companies cannot Afford to Make

Doing additional work without documentation is a common financial mistake made by construction companies.

Fremont, CA: The construction industry frequently faces a variety of financial challenges due to long project timelines, large material orders, and upfront labor costs. The following are some of the most common financial challenges and mistakes construction companies cannot afford to make.

Misallocation of Costs

Misallocation of costs goes hand in hand with the error of cost misunderstanding. To achieve a much more reliable analysis of profitability, each project's costs should be meticulously accounted for. A construction company may not know whether a job is truly profitable or not without this information.

A common problem that construction companies face is that some jobs are extremely profitable while others are not. While these projects may balance out to be "overall profitable" for many construction companies, without a closer look, construction companies may be leaving money on the table as well as missing out on a higher level of profitability.

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