Construction business accounting isn’t just about spreadsheets—it’s about survival. In this episode, Wade Carpenter joins me to break down real-world ways contractors can take control of their cash flow and stop bleeding money on every job, especially from things like “zombie rentals”.
Wade shares stories from the field, including a contractor who discovered his paycheck was getting eaten alive by bad math and worse systems. It’s time to stop working harder and earning less.
What You’ll Learn…
- Why zombie rentals are sneaky profit killers you might be ignoring
- The one thing your chart of accounts must show to be useful for real decisions
- How construction business accounting helps you bid smarter and protect profit
- How to avoid the trap of borrowing from the next job to pay for the last one.
- The difference between markup and margin (and why most contractors get it wrong)
- How to use correct construction business accounting to take home a real paycheck
Key Moments…
[02:10] What inspired Wade’s book on Profit First for construction
[05:30] What is Job X and how it helps contractors see the real cost of jobs
[10:45] The problem with relying only on GAAP or your P&L
[17:20] Construction business accounting mistakes with break-even and margins
[22:00] How Zombie rentals quietly drain your profits
[26:10] How a better chart of accounts changes everything
[31:45] What growth really does to your overhead and why profit shrinks
What inspired Wade’s book on Profit First for construction
Wade’s book wasn’t just another Profit First knockoff—it was written as a business fable that brings the financial realities of construction to life. He shares how years of working with contractors led him to build a system focused on real-world construction business accounting that puts cash flow and profit first.
What is Job X and how does it help contractors see the real cost of jobs
Job X is Wade’s term for all the cash that goes out just because you have a job—not just materials and subs, but permits, rentals, fuel, and equipment payments. Construction business accounting that includes Job X helps contractors avoid the trap of borrowing from the next job to pay for the last one.
The problem with relying only on GAAP or your P&L
Many business owners think their P&L tells the whole story, but construction business accounting must go beyond that. Loan payments, fleet costs, and other expenses don’t show up in GAAP statements, which leads to overconfidence and underbidding.
Construction business accounting mistakes with break-even and margins
Break-even calculations based on P&L data often ignore cash outlays like equipment loans and credit lines. Wade shares how many contractors don’t even know their true break-even point, which puts them at constant financial risk.
Zombie rentals and how they quietly drain your profits
Leaving a lift or port-a-potty on-site longer than needed might not seem like a big deal—until you’re doing it on every job. Diane and Wade explore how zombie rentals are the silent killers of profit, easily overlooked without sharp construction business accounting.
How a better chart of accounts changes everything
Diane helped a client restructure their chart of accounts to reflect true job costs. By putting labor in the right buckets and simplifying marketing categories, the client finally understood where their money was going. It’s a powerful construction business accounting move that any contractor can make.
What growth really does to your overhead and why profit shrinks
Contractors often say they made more money when it was just them and a helper. Wade explains why doubling your revenue usually means your overhead more than doubles. Without better construction business accounting, your business grows while your profits vanish.
About Wade
With over 35 years of public accounting experience, Wade has helped contractors across the country—from family-owned operations to billion-dollar firms—gain control of their finances and build lasting wealth. He’s the author of Profit First for Commercial Construction and is passionate about transforming the way builders think about money. Wade leads our firm’s strategic direction and specializes in helping contractors achieve permanent profitability.
Resources:
- Wade Carpenter’s Book: Profit First for Commercial Construction (available on Amazon)
- Wade’s Podcast: Contractor Success Forum
Connect with Wade
Social Links
Diane’s Resources:
Profit Impact Call: https://taxcoach4you.com/profitimpactcall
Profit First Method: https://taxcoach4you.com/profit-first
15 Profit Leaks eBook: https://profitcoach4you.com/profitleaks
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