Procore Technologies, Inc., a leading provider of construction management software, recently published an e-book entitled How to Grow Your Business . The e-book discusses topics such as determining the right time to expand, using technology to your advantage, retaining talent, scaling responsibly, nailing your numbers, and building relationships.

In our experience, it is key to have a handle on all business functions before you consider an expansion. Otherwise you run the risk of failure. Companies can sometimes realize higher profits from remaining small and focused. 

As accountants, we primarily focus on the financial side of your business. Some of the key points Procore makes on nailing your finances include:

• Managing cash flow so you can meet payroll, pay for materials and supplies, and reimburse subcontractors.
  
• Having the ability to evaluate organizational liquidity to determine which projects are providing cash flow and which are draining liquidity.
• Using scheduling as a tool to drive the project and build credibility.
• Measuring and monitoring work-in-progress (WIP) to ensure corrective action is taken in a timely manner and projects are executed as planned.
• Looking at key indicators such as gross margin, cash flow, and change orders to have global perspective on project performance.
• Managing backlog so you can seize high margin opportunities that come up.  
• Developing performance scorecard indicators to determine if you are operating at full capacity.

Metrics give you the information needed to increase profits, reduce overhead costs and control operating expenses. Companies in a growth mode need to pay close attention to financial metrics to ensure they are not overextending themselves. Contact me at 610.828.1900 or [email protected] to discuss what metrics you should watch to ensure your growing business is remains profitable. 

Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code.  We strongly advise you to seek professional assistance with respect to your specific issue(s).