Construction Genius

You pay the Christmas bonuses. Then January hits, more job costs come in, and the profit you paid them on starts to shrink.
In part nine of the construction accounting series, Kathe Barrington, CPA, of KB CPA walks through a contractor's year-end close. She covers how to test your numbers before you spend, distribute or pay bonuses on them.
 
Takeaways:
Year-end prep starts in January. A hard close tells you which SOPs need work

Check December's closed jobs against January's job costs. Costs still landing means you closed too early

Take job losses as soon as you know them. Be conservative on pending change orders

Internal financials that don't match your reviewed statement cost you credibility with your bank and surety

Get Q3 right, pick the jobs you'll close by December 31, and get the numbers to your tax person in October

 
Kathe also tells the story of a job that took 11 years to close out.
 
The full Construction Accounting Series with Kathe Barrington:
Playlist: https://www.youtube.com/playlist?list=PLNqgaQ0mEF1w
Ep. 357 WIP Reports Made Simple: https://www.constructiongenius.com/wip-reports-made-simple-the-key-to-stopping-hidden-job-losses-ep.-357

Ep. 359 Use Your WIP to Protect Cash: https://www.constructiongenius.com/how-to-use-your-wip-to-protect-cash-and-grow-profitability-ep.-359

Ep. 364 Physical Progress vs. Financial Reporting: https://www.constructiongenius.com/physical-progress-vs.-financial-reporting-in-construction-projects-ep.-364

Ep. 368 Underbillings Bad. Overbillings Better: https://www.constructiongenius.com/underbillings-bad-overbillings-better-the-cash-flow-truth-construction-owners-cant-ignore-ep.-368

Ep. 377 Why Your Jobs Look More Profitable Than They Are: https://www.constructiongenius.com/why-your-jobs-look-more-profitable-than-they-are-indirect-allocations-and-overhead-in-construction-ep.-377

Ep. 388 Read Your Backlog Like a Banker: https://www.constructiongenius.com/how-to-read-your-backlog-like-a-banker

Ep. 396 Grow Bonding Capacity: https://constructiongenius.com/grow-bonding-capacity-banking-tax-moves-contractors/

Ep. 400 Projections: https://www.constructiongenius.com/construction-projections-cash-flow-margin-kathe-barrington

Connect with Kathe Barrington:
LinkedIn: https://www.linkedin.com/in/kathe-barrington-a6346337
Facebook: https://www.facebook.com/p/Kathe-Barrington-CPA-100072271041746
KB CPA: https://kbcpa.biz

Suffolk and MIT just released a white paper on AI in construction. It estimates 17 to 20% in potential cost savings and 22 to 25% on schedule. In this solo episode, Eric Anderton reads it for a contractor running a $25 to $500 million company and pulls out the applications worth testing now. He also explains where those numbers came from before you expect them on your next job.
Takeaways:
Many field production problems get locked in during design, months before the crew shows up

Design changes hit quantities, purchasing and installation. AI could get those effects onto the schedule sooner

A contractor is using AI to turn hundreds of schedule activities into a three-week look-ahead with a risk list

Tie your procurement log and lead times to the schedule so a late delivery flags the work it puts at risk

None of it works without accurate project data and someone who owns the decision

Connect with Eric Anderton: https://www.linkedin.com/in/andertoneric
 
Read the report: Construction in the Age of AI, from Suffolk and MIT
https://suffolk.com/wp-content/uploads/2026/09/Suffolk_MIT_AI_Whitepaper_FINAL.pdf

A $20 million project lands in your lap with three or four red flags attached. You want the revenue. You want the backlog. In this solo episode, Eric Anderton walks through the three-for-three test he uses with his coaching clients: right client, right project, right location. He also tackles a harder problem. What do you do with a technically excellent superintendent whose behavior no longer matches your company's values? Two decisions, and Eric shows you exactly how they can start reinforcing each other if you let them.
Takeaways:
- Why profit history matters more than revenue when deciding which projects to take again
- The three-for-three test for qualifying clients, projects, and locations
- How to define a seat by its outcomes and behaviors before judging the person in it
- The three real options for a values mismatch: train, move, or fire
- Why the size of the number never fixes the size of the risk
 
Connect with Eric Anderton:
https://www.linkedin.com/in/andertoneric
 
If you want the full niche analysis spreadsheet Eric uses with his coaching clients, email eric@constructiongenius.com with "Niche Analysis" in the subject line.

Your WIP shows today. Your backlog shows what's booked. Neither tells you where your cash and crews are headed. That's what projections do, and most contractors either do them badly or skip them.
In Part 8 of the series, CPA Kathe Barrington shows construction owners how to build projections that actually predict trouble early.
What you'll take away:
Why projections belong to your CFO, and where owners still need to stay involved

How far out to project (18 months internally, fiscal year-end for the bank)

The job-cost bell curve, and how to plan cash, billings, and manpower around the peak

Why cushion in your estimates can hurt your credibility with bank and bonding

A 30-60-90 day plan to get your projections under control

Kathe's line for owners who play games with their numbers: you lose the truth about your own margins, and every future estimate inherits the lie.
 
The full Construction Accounting Series with Kathe Barrington:
Ep. 357 WIP Reports Made Simple: https://www.constructiongenius.com/wip-reports-made-simple-the-key-to-stopping-hidden-job-losses-ep.-357

Ep. 359 Use Your WIP to Protect Cash: https://www.constructiongenius.com/how-to-use-your-wip-to-protect-cash-and-grow-profitability-ep.-359

Ep. 364 Physical Progress vs. Financial Reporting: https://www.constructiongenius.com/physical-progress-vs.-financial-reporting-in-construction-projects-ep.-364

Ep. 368 Underbillings Bad. Overbillings Better: https://www.constructiongenius.com/underbillings-bad-overbillings-better-the-cash-flow-truth-construction-owners-cant-ignore-ep.-368

Ep. 377 Why Your Jobs Look More Profitable: https://www.constructiongenius.com/why-your-jobs-look-more-profitable-than-they-are-indirect-allocations-and-overhead-in-construction-ep.-377

Ep. 388 Read Your Backlog Like a Banker: https://www.constructiongenius.com/how-to-read-your-backlog-like-a-banker

Ep. 396 Grow Bonding Capacity: https://constructiongenius.com/grow-bonding-capacity-banking-tax-moves-contractors/

Full playlist: https://www.youtube.com/playlist?list=PLNqgaQ0mEF1w

Connect with Kathe Barrington: kbcpa.biz

Ryan Englin, founder of Core Matters and creator of the FieldCon software platform, returns to talk about the two things most construction leaders dodge: accountability and performance reviews. Ryan and Eric get practical about why these conversations feel so hard and how to make them routine.
The short version. Accountability starts with a commitment the employee actually agreed to. The longer you wait to address a problem, the more painful it gets. And the annual review is the worst way to give feedback.
In this episode: - Why you can't hold someone accountable to something they never committed to - The foreman story that shows how delay turns a small issue into a confrontation - Why focusing on the agreed outcome beats focusing on the person - How to redesign reviews around the gap between self-rating and manager-rating - Running reviews monthly or quarterly so nothing is ever a surprise
 
Connect with Ryan Englin: 
Core Matters: corematters.com
 FieldCon:  fieldcon.io 
LinkedIn: www.linkedin.com/in/ryanenglin 
Core Matters on LinkedIn: www.linkedin.com/company/corematters