494: Your Roofing Company Made Money. Can You Trust the Numbers?

An eight-figure roofing company is busy and completing plenty of work, but the profit is not what the owner expects. Dave Sullivan and construction accounting expert Diane Gilson explain how the timing of income and job costs can distort a roofing company’s monthly profit.DESCRIPTIONHow can an eight-figure roofing company stay busy, complete plenty of work, and still wonder where the money went?The owner’s accountant recommends cash-basis accounting. Other successful roofing contractors are telling him cash basis is completely wrong for a company his size.So who is right?Possibly both of them.The accounting method used to prepare a company’s tax return may not provide the information an owner needs to manage the business.In this episode, Dave revisits an important conversation with construction accounting expert Diane Gilson. They explain why a roofing company can appear highly profitable one month and lose money the next, even when its pricing and production have not substantially changed.Diane calls this the gross profit roller coaster.ROOFING BUSINESS HEALTH CHECKAre you busy but still wondering where the money is going?The Roofing Business Health Check examines your financials, sales and marketing, operations, leadership, and systems.Dave identifies the real problems and the three things you should fix first.Learn more and talk with Dave:https://theroofercoach.com/health-check/IN THIS EPISODE, YOU’LL LEARN:The difference between cash and accrual accountingWhy tax accounting and management accounting serve different purposesHow the timing of customer payments and job costs distorts gross profitWhy accrual accounting alone may not completely solve the problemHow percentage-of-completion adjustments match income with job costsWhy accurate estimates and job costing are essentialWhat roofing owners should ask their accountantsHow to determine whether your financial statements are telling the truth This is not an accounting class. You do not need to become a bookkeeper or CPA.But as the owner, you need to understand enough to know whether your roofing company is actually making money.ABOUT DIANE GILSONDiane Gilson specializes in construction accounting, job costing, management reporting, and helping contractors understand their numbers.https://buildyournumbers.com/TRUSTED AND VETTED SPONSORSSMA SUPPORTGet roofing-trained support for lead intake, follow-up, appointment setting, CRM management, rehash, reviews, and administrative work.https://theroofercoach.com/smasupportPROLINEManage leads, automate follow-up, schedule appointments, send proposals, and see what is happening throughout your sales pipeline.https://theroofercoach.com/prolineUse promo code DAVE50.CONNECT WITH DAVEThe Roofer Coach:https://theroofercoach.com/The Roofer Show helps roofing contractors build more profitable businesses, develop dependable systems, understand their numbers, and reclaim their time.