How Construction Companies Fail While Profitable and Accounting Strategy to Survive with Bryce Wisan

0:00 [SPEAKER_01]: On this week's show, accounting for loss and construction with price-wise and from Letha-Go. [SPEAKER_01]: Alright, we're here. [SPEAKER_01]: It's a couple of mountain people getting together. [SPEAKER_01]: It took us a little while to get recording guys them to be honest because rice was showing me some some trails and things near him.

0:23 [SPEAKER_01]: We were talking a little mountain fun. [SPEAKER_01]: So, Bryce, say hello to everybody. [SPEAKER_00]: Hello, my pleasure to be here. [SPEAKER_00]: And I'm not just saying that because we talked about mountains and the lead in. [SPEAKER_01]: Yeah, we talked about little mountains, little mountain biking, a little skiing, a little fat biking, so, uh, you know, a little rowdy.

0:39 [SPEAKER_01]: Got a little rowdy. [SPEAKER_01]: I mean, we're not leaving ourselves enough a lot of time, and, uh, I think we could have a whole discussion about trails and Strava and whatnot, but uh, we got to do that. [SPEAKER_01]: We got to do that. [SPEAKER_01]: We got to do that contact thing. [SPEAKER_01]: So we'll be right back hang on.

0:54 [SPEAKER_01]: We're back on YouTube, check us out at youtube.com forward slash at the content crew. [SPEAKER_01]: We got new stuff coming for you guys this year. [SPEAKER_01]: We're going to switch it up a little. [SPEAKER_01]: You might have noticed it already. [SPEAKER_01]: Maybe you didn't, if you didn't.

1:07 [SPEAKER_01]: Well, you better check it out. [SPEAKER_01]: Alright, we're back. [SPEAKER_01]: So besides sharing fantastically wonderful hobbies in the mountains of Utah, and I'm in the mountains of Colorado, we're sisterly that way, or brotherly however you wanna call it, you guys get the snow before we do, so we know it's coming.

1:26 [SPEAKER_01]: But what got you here, tell everybody a little bit about Bryce? [SPEAKER_00]: Look at about price. [SPEAKER_00]: I'm a construction accounting nerd through and through. [SPEAKER_00]: I have been part of the construction industry, most of my life, and a good chunk of my career. [SPEAKER_00]: And where it started, my dad was a construction CPA, so a lot of times around dinner, week to hear about contractors and construction stories.

1:50 [SPEAKER_00]: My summer jobs were with contractors, [SPEAKER_00]: and then second stop of my career was as a CPA and public practice focused on the construction industry and I just loved it. [SPEAKER_00]: Such a good fit for me in terms of personality, the optimist nature, the contractors, how smart they are, how hard they work, and it's been a real labor of love for me to work with contractors for most of my career.

2:15 [SPEAKER_01]: I mean, it's kind of crazy because [SPEAKER_01]: parents, family members historically inside of construction. [SPEAKER_01]: I can't say I got to say this is the first time somebody said my my dad was a county nerd and talked about construction accounting at dinner. [SPEAKER_01]: That is the first construction at dinner not construction accounting at dinner.

2:39 [SPEAKER_01]: I don't know if that was a way for you to eat up fast and get out, but it sounds like you enjoyed it. [SPEAKER_00]: Someone called it a disadvantage childhood for me. [SPEAKER_00]: It was fantastic. [SPEAKER_00]: Right up my alley. [SPEAKER_01]: That's awesome and I mean, I know we didn't talk much about this ahead of time, but there's a lot of difference when you say accounting accounting in construction is very different.

3:00 [SPEAKER_01]: And I wonder if you can kind of break it out because I think people don't give that enough of its credit. [SPEAKER_00]: So it's interesting that you say that because I wrote what I thought was just a very simple post in LinkedIn that got a lot of traction. [SPEAKER_00]: I tell my teenagers I'm influenced her now because it got over a hundred thousand views.

3:19 [SPEAKER_00]: And basically that just to the post was construction accounting is different and it really hit a nerve with people who understand that construction accounting is different. [SPEAKER_00]: How is it different? [SPEAKER_00]: Counting in a lot of industries is really a historical record keeping function in construction.

3:36 [SPEAKER_00]: It's much more than that. [SPEAKER_00]: Why? [SPEAKER_00]: If you look at any sort of bidding or estimating cost projection on the construction site, all you're doing is taking your understanding of job costing, your understanding of what it takes you to actually perform in the field. [SPEAKER_00]: and projecting it forward.

3:57 [SPEAKER_00]: So what's job costing? [SPEAKER_00]: What is that? [SPEAKER_00]: That's accounting. [SPEAKER_00]: So I look at construction and say, well, at accounting instruction and believe that, yeah, accounting is really part of the operational side of the business because it plays such an important factor in contractor securing work.

4:14 [SPEAKER_00]: The other area where it plays so heavily into the industry is on the performance measurement [SPEAKER_00]: A lot of emerging contractors come to realize very quickly that they outgrow their ability to manage jobs by being on site and by being close enough to the jobs and so what they have to do is they have to change the way they manage and one of the ways they can get more data about their jobs is [SPEAKER_00]: what's the job costing us so far?

4:49 [SPEAKER_00]: Where are we good? [SPEAKER_00]: Where are we overbudget? [SPEAKER_00]: Where are we under budget? [SPEAKER_00]: And so again, accounting in construction plays such a critical role in the operational side of the business in ways that I think it doesn't as much in other industries. [SPEAKER_01]: I mean, I would double down on that.

5:05 [SPEAKER_01]: I know it does not. [SPEAKER_01]: For being someone who's been in multiple other industries, the complexity of job cost accounting, really surprised me when I got here. [SPEAKER_01]: I will be honest. [SPEAKER_01]: I mean, I helped build ERP system in previous life and worked on that world and implemented multiple different types in multiple different verticals.

5:22 [SPEAKER_01]: Job cost accounting is the number one reason in my opinion that we really still in construction technologies don't have an ERP system. [SPEAKER_01]: because the failure to understand exactly what you just said. [SPEAKER_01]: And I have a really unique audience, right? [SPEAKER_01]: Like so, for my, you know, estimators and my BIM and VDC folks, this might bore you for a second, but this is for the founders out there, the people building software that don't understand, what is job cost accounting?

5:51 [SPEAKER_01]: Can you define it? [SPEAKER_01]: Because I think that definition might be really important. [SPEAKER_01]: to people who think they're building a better way or a better mouse trap or whatever marketing slogan you want this week. [SPEAKER_00]: Yeah, what is job costly? [SPEAKER_00]: It's measuring what matters.

6:06 [SPEAKER_00]: It's, what does it cost you to perform in the field? [SPEAKER_00]: Now, it's easy. [SPEAKER_00]: Everyone gets the labor and the materials, right? [SPEAKER_00]: The things that you can go to the job site look at and point to everyone job cost those. [SPEAKER_00]: Here's where it starts to get a little more complicated.

6:21 [SPEAKER_00]: What about your estimators? [SPEAKER_00]: What about the estimators software? [SPEAKER_00]: What about the project management software? [SPEAKER_00]: What about safety training? [SPEAKER_00]: What about fuel? [SPEAKER_00]: What about yard expenses? [SPEAKER_00]: How do we properly allocate equipment expenses?

6:34 [SPEAKER_00]: All of those require cash out of pocket, built, paid, and they're all required to perform in the field. [SPEAKER_00]: The question is, how do you allocate those to jobs? [SPEAKER_00]: And how do you do so in a way that makes sense? [SPEAKER_00]: that provide you with the mechanism to get intel about how those jobs are actually performing.

6:53 [SPEAKER_00]: And if you're doing it well, what your job costing today, what you're learning from your jobs today is going to help you on tomorrow's jobs, not just financially but operationally. [SPEAKER_00]: So how do I define job costs? [SPEAKER_00]: I call it measuring what matters. [SPEAKER_00]: It's, was it cost to perform in the field?

7:09 [SPEAKER_00]: Yeah, far more complicated than people and people think. [SPEAKER_01]: Yeah. [SPEAKER_01]: I mean, this was an early on issue like for time cards. [SPEAKER_01]: I was working on time cards originally and it was the job cost structure for Mason in the field to understand and job costs they have to pick which work there on those categories have to be available.

7:30 [SPEAKER_01]: And if you open up your job cost, you know, [SPEAKER_01]: And in our world, we used to be able to just open that up to everybody, right? [SPEAKER_01]: And you just go in and you pick, you know, in other industries, you're going to pick, oh, this is what I'm doing. [SPEAKER_01]: And it's not it's done.

7:43 [SPEAKER_01]: Yep, that is not how it is in construction at all. [SPEAKER_01]: No, sir. [SPEAKER_01]: I mean, the first time I did an import with that and tried to make an ADP time card work with that, I vomited what came out because of my own misunderstanding of how it actually worked. [SPEAKER_01]: So, I mean, that's what's amazing.

7:59 [SPEAKER_01]: It's not simple. [SPEAKER_01]: And man, I cannot tell you how many companies hit exactly what you said. [SPEAKER_01]: They bid and they estimate in one fashion. [SPEAKER_01]: and they buy out and work in another fashion, and they bill and yet another, and none of those connects to each other.

8:21 [SPEAKER_00]: We see that again and again, and that's a real missed opportunity for contractors together in tell about how they're really doing, getting feedback on estimating on field supervision. [SPEAKER_00]: Yeah, it's, but it is tough, it is challenging. [SPEAKER_01]: Now, it's challenging, and it's, [SPEAKER_01]: It's not a sexy part of the work, let's be honest, right?

8:42 [SPEAKER_01]: Like, oh, isn't the sexy part of the... You've got to the work, man. [SPEAKER_01]: You cut me deep. [SPEAKER_00]: Okay, I'll try to overcome it. [SPEAKER_01]: Listen, I've spent my whole career trying to make IT cool. [SPEAKER_01]: It's just not, but, you know, that's all right. [SPEAKER_01]: We can, we can admit it, but we can try to make it cool.

8:59 [SPEAKER_00]: But, read a disagree. [SPEAKER_01]: Yeah, there you go. [SPEAKER_01]: See? [SPEAKER_01]: So it does. [SPEAKER_01]: It drives business and it drives, it drives financial outcome. [SPEAKER_01]: I've always said this, right? [SPEAKER_01]: Like, money's not why we're in construction. [SPEAKER_01]: I don't believe it, most companies.

9:15 [SPEAKER_01]: There's a love for machinery. [SPEAKER_01]: There's a love for what they're doing, but it's the fuel that makes that car run, right? [SPEAKER_01]: You don't get to do those things unless you're bidding correctly, winning good work, and it being as profitable as it can be. [SPEAKER_01]: And I don't think we think about some of the struggles that are being experienced right now.

9:34 [SPEAKER_01]: And that's why we had you on the show today was like, what are some of the struggles that you're seeing in that world right now around construction account? [SPEAKER_00]: Well, I think the biggest one is contractors look at jobs almost as isolated units. [SPEAKER_00]: So what I mean is they look at it and they say, well, if this job goes well, I'm going to earn X amount of dollars on the job.

9:55 [SPEAKER_00]: And that may very well be true. [SPEAKER_00]: And in many cases, they're good at it. [SPEAKER_00]: They're good at those kinds of predictions. [SPEAKER_00]: The problem is, [SPEAKER_00]: that cash flow is path dependent and being able to manage the business and the cash flow throughout the job while maintaining and performing another jobs is an extraordinarily different ask than just saying am I going to make money at the end of the job?

10:23 [SPEAKER_00]: And so that to me is the big [SPEAKER_00]: Just these end games where we finished the job and we've made X amount of dollars. [SPEAKER_00]: because that really doesn't serve us. [SPEAKER_00]: What we need to be talking about and what we need the right kind of information, the right tools, the right people, the right mindset, the right approach is how are we gonna cash flow these jobs?

10:48 [SPEAKER_00]: And that is, that's a very difficult conversation from are we making money on this? [SPEAKER_00]: Are we going to make money on this job? [SPEAKER_01]: We're gonna use that to segue into this for a second because it was at a CFMA event. [SPEAKER_01]: For the first time that I heard that 70% of contractors who go out of business, trade contractors, I believe, is the quote, it go out of business, go out of business, go out of business.

11:11 [SPEAKER_01]: are profitable at the time they go out of business. [SPEAKER_01]: It's a cash flow issue. [SPEAKER_01]: And it's amazing that that statistic is real. [SPEAKER_01]: I've double-checked it a few times. [SPEAKER_01]: And at the time, it was real. [SPEAKER_01]: Because pretty much straight contractors are financing jobs.

11:27 [SPEAKER_00]: Exactly. [SPEAKER_00]: Yeah, the contractors go out of business when things are going well. [SPEAKER_00]: They go out of business in the midst of a good job or a good string of jobs. [SPEAKER_00]: And it's because a cash flow. [SPEAKER_01]: That doesn't compute for me. [SPEAKER_01]: I've worked with and we talked about a number of different people who we've connected with over the years trying to solve this problem and I think it's a big issue because one of the underlying problems in your world right now is, you know, we hear about the shortage of labor right across the board.

11:56 [SPEAKER_01]: We hear about it in estimating. [SPEAKER_01]: We hear about it in BIM in VDC. [SPEAKER_01]: We hear about it in the field. [SPEAKER_01]: And you are raising it to me. [SPEAKER_01]: It's true in accounting now, too. [SPEAKER_01]: Fair amount. [SPEAKER_00]: So everything that you can say about the shortage of skilled labor in the trades is true in accounting.

12:11 [SPEAKER_00]: We do not have enough accountants. [SPEAKER_00]: and the numbers are getting worse i mean maybe we do have to break make it sexy again i don't know we got to bring it back got to make it cool yes oh yes so what i mean how dire are we where are we with it because i think this this kind of blew me away Bloomberg twenty twenty four along with fortune did a study where they calculate it there was an estimated three hundred forty thousand fewer accounts in the U.S. working then i think it was about [SPEAKER_00]: but they estimate that there's a current shortage of accounts in the US of 340,000 accountants.

12:45 [SPEAKER_00]: That's a big number. [SPEAKER_01]: It is and we continually say this and this is why it was interesting to me is because we're not going to make that up in Bidman VDC, we're not going to make it up in Estimating, we're not going to make it up in the field. [SPEAKER_01]: And I don't think we're going to make it up in accounting either.

13:00 [SPEAKER_01]: So how are we going to solve this? [SPEAKER_01]: Because we're looking at the other areas as well and they're going through their own changes. [SPEAKER_01]: How are we going to solve these problems? [SPEAKER_00]: So the the profession the county profession has really tried to address this.

13:15 [SPEAKER_00]: They've got a couple of challenges right now. [SPEAKER_00]: One is the grain of the profession. [SPEAKER_00]: Recent study calculated that in 2019, 75% of CPAs in the U.S. have reached retirement age. [SPEAKER_00]: So we do have quite a gusher of CPAs leaving the field. [SPEAKER_00]: And similarly, we're trying to encourage people to enter accounting, but enrollment over a recent 10-year period was down 18.9% [SPEAKER_00]: So clearly, this is not a problem that's going to be solved in the near term by just attracting more people to the profession.

13:47 [SPEAKER_00]: For me, there are a couple things that that we really need to do. [SPEAKER_00]: And number one, obviously, is going to be leveraging technology better. [SPEAKER_00]: I would love to be able to sit here and say, Jeff, that, yeah, AI is ready to do a lot of the dirty work that we accountants do.

14:00 [SPEAKER_00]: It's not. [SPEAKER_00]: It's really not. [SPEAKER_00]: It can help magnify our efforts. [SPEAKER_00]: It can help make [SPEAKER_00]: But it is not replacing accountants anytime soon. [SPEAKER_00]: Very sad to hear that. [SPEAKER_00]: Very sad to be able to say that. [SPEAKER_00]: But that is the reality.

14:16 [SPEAKER_00]: Another thing that we need to do, especially in the construction industry is really upscale and train the accounts that we do have and make them specialists in construction. [SPEAKER_00]: My favorite trade association is CFMA, the construction financial management association. [SPEAKER_00]: They put out fantastic content.

14:37 [SPEAKER_00]: frequently on the business and financial aspects of the construction industry. [SPEAKER_00]: There's a tremendous spirit of goodwill there, excellent community of people, resources to draw. [SPEAKER_00]: If I were a contractor today and I were worried about my accounting staff, I needed to upscale I would start by looking at CFMA.

14:59 [SPEAKER_01]: That track you there because that's where those two orgs will those two ideas come together, right? [SPEAKER_01]: fantastic organization. [SPEAKER_01]: I've worked with them previously currently working a bit with Neil Shaw on the construction progress coalition, so you guys know the shows associated with construction progress coalition.

15:15 [SPEAKER_01]: So we're very happy and very excited about the CFMA because it is and if you guys don't know what it is, it's an accounting focused, you know, financial management, I shouldn't say accounting or financial management is focused. [SPEAKER_01]: organization that individuals join. [SPEAKER_01]: You can join on behalf of your company, correct?

15:36 [SPEAKER_01]: But individuals join and they run so many resources for upskilling, for continued education. [SPEAKER_00]: So good. [SPEAKER_01]: And what I love about the buy, found them through technology, right? [SPEAKER_01]: This show itself, you guys can look back in our history. [SPEAKER_01]: We were at the construction financial management [SPEAKER_01]: because we believed then and I believe now that that is one of the ways for this all to get better.

16:04 [SPEAKER_01]: I don't actually think it's necessarily with AI. [SPEAKER_01]: I honestly think it's with really unflashy technology that captures in an organized fashion, the laid out necessities for good ground work for accounting, right? [SPEAKER_01]: Nobody should be trying to have AI right now do your accounting for you.

16:27 [SPEAKER_01]: In fact, it's one of the things that's the most horrible at, right? [SPEAKER_01]: Because it's non-deterministic. [SPEAKER_01]: Deterministic means I give it AI, I give it B, I get C every time. [SPEAKER_01]: That is not AI right now, and it's not gonna be for a while. [SPEAKER_01]: So I think the blocking and tackling is understanding what do you need for good estimating and bidding when it comes to job costing and how is that going to maintain itself [SPEAKER_01]: how are you going to use that once you win a job and buy out a job and get into the job?

16:59 [SPEAKER_01]: How are you going to do that make it easy for that field person to fill out a time card? [SPEAKER_01]: Whether it's an individual or a crew time and get it costed back. [SPEAKER_01]: How are you going to gather percent completes better so that we can understand with and for those out there with work and progress?

17:14 [SPEAKER_01]: One of the biggest things that keeps coming back [SPEAKER_01]: And I think it's technology upskill and accounts that really understand why construction is of is a different animal is a way to start pushing this forward. [SPEAKER_00]: Yeah, totally great. [SPEAKER_01]: And I'm interested because we struggle in the industry to attract talent in all areas because I think we fail to show them.

17:48 [SPEAKER_01]: How, I mean, you know, you said this, you heard your dad talk about construction accounting and then you went into it. [SPEAKER_01]: Why I'm going to guess you probably love the industry and what's being built and you feel a part of absolutely why don't we sell that. [SPEAKER_00]: So I think part of the problem with construction accounting in particular with the shortage is is that we don't sell it.

18:08 [SPEAKER_00]: and construction is not what I consider a destination industry for accountants and the perception as wrong as it may be in my opinion is that in accounting circles, construction is not an interesting place to be. [SPEAKER_00]: It's not a desirable destination and I think that has exacerbated the shortage of accountants in construction.

18:32 [SPEAKER_01]: I have to agree with you completely and I think it's also an opportunity [SPEAKER_01]: for we have to start talking about the transformation that's going on in the industry. [SPEAKER_01]: The industry talks about the transformation and has been used, had the transformation used as a hammer over and over.

18:47 [SPEAKER_01]: Oh, you got to transform, you're going to get disrupted. [SPEAKER_01]: You got to keep up, you got to do these things. [SPEAKER_01]: I actually disagree with that completely. [SPEAKER_01]: It thickets an attracted people like new things when it comes to change. [SPEAKER_01]: And when an industry is going through another evolution, [SPEAKER_01]: from the outside in.

19:06 [SPEAKER_01]: Why not? [SPEAKER_01]: I mean, how many trade contractors are going to fabrication right now becoming more manufacturing focused? [SPEAKER_01]: Hey, let's go get accountants from that world that understand inventory and understand the other things you do and then bring it over and teach them construction.

19:26 [SPEAKER_01]: I don't know. [SPEAKER_01]: I'm looking for opportunities. [SPEAKER_00]: Totally agree. [SPEAKER_00]: I think that's a great mindset, right? [SPEAKER_00]: We've got to be open to other options because what we've done for generations is no longer serving the industry well. [SPEAKER_00]: So I love that open-minded approach.

19:40 [SPEAKER_00]: I think a lot of forward-thinking trade contractors are opening themselves up to some really great opportunities in [SPEAKER_00]: call it extensions of the traditional trade construction model. [SPEAKER_01]: Yeah, and I mean, that's one way that we're going to do it, but we've seen this in others now.

19:59 [SPEAKER_01]: And, you know, we've seen it in IT and in technology itself. [SPEAKER_01]: You're going in your hiring technology companies. [SPEAKER_01]: You're bringing in IT to really [SPEAKER_01]: Amplify and help you with an expertise from outside and I would be remiss if I didn't say this drove you to do something new on your own as well that I think is something.

20:17 [SPEAKER_01]: We need to start looking at as a model in the industry so talk a little bit about. [SPEAKER_01]: Let's go and what it is absolutely. [SPEAKER_00]: So we provide remote account and services to contractors. [SPEAKER_00]: What does that mean? [SPEAKER_00]: It means we find contractors with accounting needs.

20:31 [SPEAKER_00]: We help them identify what those needs are. [SPEAKER_00]: And then we go to the market remotely, Latin America, find accountants that meet the qualifications, put those accounts in front of the contractors for the contractors to have final say and say, yeah, one of that person on my team.

20:47 [SPEAKER_00]: We hire the accounts, we train in my construction, and we onboard them, we provide continuous training and supervision for these accountants, who work as fully embedded full-time members of the accounting teams, these construction companies. [SPEAKER_00]: So where this really came from Jeff is for roughly 15 years in public accounting, I was asked one question consistently by contractors, which has helped me find a controller, helped me find an account for my team.

21:13 [SPEAKER_00]: I was rarely able [SPEAKER_00]: Is we think about it? [SPEAKER_00]: You say, well, what do they need? [SPEAKER_00]: What do they want? [SPEAKER_00]: They want someone who has an economic background, some formal trading. [SPEAKER_00]: They want someone who knows construction. [SPEAKER_00]: They want someone who is available, right?

21:28 [SPEAKER_00]: Doesn't do any good if they're the individuals are currently employed elsewhere. [SPEAKER_00]: they want someone who's economically viable, meaning accounts are quite expensive nowadays, we have to be sensitive about costs. [SPEAKER_00]: And then number five, they want someone who's within reasonable commuting distance to their office.

21:45 [SPEAKER_00]: And when you look at the intersection of those asks, it reduces the pool of candidates to essentially zero. [SPEAKER_00]: And so what what I did [SPEAKER_00]: was I learned this lesson taken a hiatus from construction in the investment management world where even in the super sexy, you talk about sexy accounting jobs, private equity venture capital, we had a hard time attracting the right kind of accounts to come work in venture capital and private equity.

22:12 [SPEAKER_00]: I was stunned and it wasn't just us and what we realized is some of our investment partners in the Bay Area were starting to hire remote accountants to work for that full time. [SPEAKER_00]: but eventually I hired one of my own for my own team and it was fantastic. [SPEAKER_00]: So we're along that journey, I realized I know an industry that really needs this and it's construction and I'm gonna do it.

22:38 [SPEAKER_00]: So we provide remote accountants to contractors. [SPEAKER_00]: The benefit is they get someone who's training construction. [SPEAKER_00]: the economics are extremely, extremely compelling with the near-shore model, costs are about half the base salary of someone in office, and frankly, they're someone who can perform.

22:56 [SPEAKER_00]: So it's been an interesting journey. [SPEAKER_00]: I finally able to answer that question. [SPEAKER_00]: Find me a controller for my company. [SPEAKER_01]: Yeah, I mean, that's, we had the same problem in IT. [SPEAKER_01]: We've had it in other areas. [SPEAKER_01]: I mean, and [SPEAKER_01]: we're not going to solve all our labor problems that right way because we're always going to be people that go do the jobs but okay let's solve some of our other problems.

23:18 [SPEAKER_01]: new ways and I love the deer term option especially because you're guiding them you're bringing them in you're vetting them out and solving those problems because you're right I get at the same thing all time and when you put all those things against you you're not you just you're not going to find anybody does it so this model works although I'm going to do this one for your kids because I'm the king of making up new things and [SPEAKER_01]: You know, if you're accounting as a service, so you're asked, and you did want me to call you, why you just, you just became legend in my kids mind, you know, why is that, why is accounting as a service.

23:54 [SPEAKER_01]: So there you go, um, I love it, but if the shoe fits, if the shoe fits, man, where it and bring it because that is the thing that I don't think people realize is. [SPEAKER_01]: the leveraging your ability to understand where you are financially allows you just like great IT and great technology allows you to be more aggressive and be out front.

24:23 [SPEAKER_01]: The same goes if you can understand your cash flow, understand where you are as an organization financially, and also [SPEAKER_01]: we're in this crazy world of, I mean, I remember when I started just 10 years ago, a hundred million dollar job was like, wow, yeah. [SPEAKER_01]: People even think about those anymore right now.

24:45 [SPEAKER_01]: We're talking 2.5, three billion dollar jobs. [SPEAKER_01]: This. [SPEAKER_01]: If you don't think accounting is a weapon and needs to be really up top, you're not paying attention. [SPEAKER_00]: So what if we connect the dots? [SPEAKER_00]: You mentioned the 70% of contractors failing in the middle of our profitable job or when they're profitable statistic.

25:07 [SPEAKER_00]: So what if we tie that back to having good accounting? [SPEAKER_00]: The way I would approach that problem is I'd say, okay, well, contractor, do you have a current web schedule? [SPEAKER_00]: Are you preparing a monthly web schedule? [SPEAKER_00]: And if so, what I do is I sit down with those contractors and say, all right, let's take that with a look at each individual job, take our remaining cost to complete because we can look at that and we can know what those costs look like.

25:31 [SPEAKER_00]: Is this just a labor run out or do we have some chunky material purchases do we have some. [SPEAKER_00]: chunky expenditures with respect to subs. [SPEAKER_00]: We can map out those expenditures by job fairly easily on a job by job basis. [SPEAKER_00]: Then we can overlay that with our expectation of buildings, right?

25:52 [SPEAKER_00]: We know the cadence of billing on the jobs. [SPEAKER_00]: We know once we build roughly speaking when we're going to get paid. [SPEAKER_00]: So we can overlay the expenditures with the billings and collections. [SPEAKER_00]: All of a sudden we've got a cash projection. [SPEAKER_00]: And the better our job costing is, the more confident we can be in that cash projection.

26:11 [SPEAKER_00]: That's it. [SPEAKER_00]: That is the answer to your 70% of contractors fail because they don't understand the cash flows and they're in the middle of a good job. [SPEAKER_00]: That's the answer. [SPEAKER_00]: And it boils down to good job costing, to get the job costing right. [SPEAKER_00]: Yeah, you've got to have good systems, good processes in place.

26:27 [SPEAKER_00]: But it really does depend on having a pilot in the box that can do that. [SPEAKER_00]: And that's where the accountants come in. [SPEAKER_00]: They need to understand accounting. [SPEAKER_00]: They need to understand construction. [SPEAKER_00]: and it takes some guidance and mentoring, and that's where I think our option is quite compelling to contractors, because a lot of contractors don't, they don't know what they don't know, they're not in a position to really train someone and mentor them in accounting, because they don't have that experience themselves, but that's where we can leverage the the expertise of our team.

26:53 [SPEAKER_01]: It's not enough to anybody in the industry really because right the a lot of these groups grew from pretty small organizations up fast yeah and scaling up at any of it it's out of your expertise when we see it you're scaling up in technology and IT it's out of your expertise yeah you're scaling up in accounting.

27:12 [SPEAKER_01]: As a business, accounting is out of your expertise and it's really easy when I've got five people to understand cash flow. [SPEAKER_01]: But now I'm 50 people and for a lot of construction companies you get from 5 to 50 in the blink of an eye and you're going from 50 to 150 and you're quadrupling your risk.

27:31 [SPEAKER_01]: without really understanding how to manage it. [SPEAKER_01]: And it's important. [SPEAKER_00]: And that's where asks accounting as a service can really come in and serve these contractors well. [SPEAKER_01]: I'm going to leave it right there because we came up with a new one. [SPEAKER_01]: And you explained in a way I can understand why accounting is an important piece of the puzzle for successful contracting companies.

27:55 [SPEAKER_01]: And I want people to have an opportunity on where they where they can go find out more about you. [SPEAKER_00]: Absolutely. [SPEAKER_00]: You can look me up on LinkedIn, Bryce Wieson, or certainly levago.com, LEVVIGO.com, so those are the best ways to find us. [SPEAKER_01]: Those are the best ways to find us.

28:12 [SPEAKER_01]: And if you want to know, [SPEAKER_01]: Where he came up with Leva go, I'm going to drop a little Easter egg in here. [SPEAKER_01]: You're going to have to go connect with him and ask, it was pretty cool. [SPEAKER_01]: And it's going to be one I'm going to have to go, I'm just going to have to go product test that myself at some point.

28:26 [SPEAKER_00]: So Jeff, you let me know, you let me know. [SPEAKER_00]: We'll go. [SPEAKER_01]: I will and we will be out there to check it out. [SPEAKER_01]: We'll have all his links in the in the show notes. [SPEAKER_01]: And I really also we drop this in there. [SPEAKER_01]: And I think we can both agree also check out the CFMA if you're not involved.

28:40 [SPEAKER_01]: It's just CFMA dot org. [SPEAKER_01]: And really, send your accounts there. [SPEAKER_01]: They're really into continued education and upskilling. [SPEAKER_01]: and just a great place for the community to come together. [SPEAKER_01]: I know a lot of folks involved in it. [SPEAKER_01]: I'm a real big fan of it as well, and so's Bryce.

28:55 [SPEAKER_01]: So go check them out while you are out there. [SPEAKER_01]: Don't forget to check out the construction progress coalition as well. [SPEAKER_01]: Constructionprogress.org. [SPEAKER_01]: We're all up to some new things. [SPEAKER_01]: You may even see some whip stuff out. [SPEAKER_01]: Thank you for tuning in to Dave to geek out for our interview with Bryce Wyzen.

29:11 [SPEAKER_01]: To read all our new stories, learn more about our guests and listen to the show, visit. [SPEAKER_01]: The content crew.com. [SPEAKER_01]: This is the content crew signing out. [SPEAKER_01]: Until next time, enjoy the ride, and you go!