Exec guide: Everything you need to know about balancing the books
Construction companies and developers everywhere are putting their financial health first when it relates to residential and commercial construction.
And, knowing when to invest in a project and when not to is all part of the financial portfolio-building game.
Here are just a few ways those in the construction industry are protecting their finances and building a healthy financial portfolio:
Financially Healthy Construction Companies in the U.S.
Although the worldwide recession hit the construction industry particularly hard, contractors and developers of all sizes are on the road to recovery.
Nowhere are construction companies feeling the positive upturn more than in the United States.
Among the examples:
- Turner Construction Group - As one of the leading commercial and residential builders in the country, Turner Construction Group takes its finances seriously. In order to keep a healthy financial portfolio, this construction company uses a payment management system that tracks everything from progress claims and billing to lien waiver collection.
- Allegheny Construction Group - For the past 30 years, Allegheny Construction Group has prided itself on its financial strength. To ensure it keeps its strong financial portfolio going, this construction company only works with financially sound developers and subcontractors.
- Skanska Construction and Development - Skanska has more than 10,000 employees in the United States alone. To keep its finances on track, this construction company has projects in many different areas of the construction industry including industrial, government, and aviation.
Along with the examples above, there are other ways construction companies across the globe can keep their financial portfolios in good health.
Monitor Profit Fade
Not every construction project is the same when it comes to expenditures, which is why it's important for companies to monitor profit fade from one project to the next.
The article “Surviving My Personal Money Crisis” mentions paying close attention to money coming in as well as money going out.
By monitoring profit fade, construction companies and developers can avoid projects where profits drastically decrease during the project's duration.
This kind of proactive monitoring helps construction companies sustain their profits as opposed to taking risks.
Choose Contractors with Financial Backing
Many professionals in the construction industry hire contractors to complete projects. This is especially the case with developers. However, if the contractor doesn't have access to secondary finances, a project could stall and lose the developer or construction company money.
What's worse, if the contractor walks away due to lack of funding, the project may never be completed.
When building a healthy financial portfolio, construction companies and independent developers should choose contractors who have a parent company to back them. This ensures project completion even if the contractor runs into issues.
Consider the Variables
There are a handful of variables that go with each construction project.
These variables can change the profitability of a job and also have a drastic effect on the construction company's financial portfolio.
As a result, construction companies and developers should consider all the variables of each new project.
These include the project location, job type, owner or client background, contract size, and the project estimator involved with the job. All of these variables factor into profit gains.
When building a strong and healthy financial portfolio, those in the construction industry should keep in mind the pointers above.
Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including budgeting and finance.
Environment Agency clamps down on plastic films and wraps
Businesses in the waste and construction industries must ensure they deal with waste plastic properly to stop illegal exports, the Environment Agency (EA) has warned.
The warning comes as the Agency is increasingly aware of plastic film and wrap from the construction and demolition sector being illegally exported.
Exports are frequently being classified as ‘green list’ waste of low risk to the environment, but are often contaminated with materials such as mud, sand, bricks and wood, posing a risk to the environment and human health overseas, and undermining legitimate businesses in the UK seeking to recover such waste properly.
During the last year, the EA has intercepted shipments to prevent the illegal export of this material on numerous occasions. The Agency inspected 1,889 containers at English ports and stopped 463 being illegally exported. This, combined with regulatory intervention upstream at sites, prevented the illegal export of nearly 23,000 tonnes of waste.
Those convicted of illegally exporting waste face an unlimited fine and a two-year jail sentence. But construction firms could also face enforcement action if contaminated construction and demolition waste plastic is illegally exported.
Malcolm Lythgo, Head of Waste Regulation at the Environment Agency, said it is seeing a marked increase in the number of highly contaminated plastic film and wrap shipments from the construction and demolition industry being stopped by officers.
“I would strongly urge businesses to observe their legal responsibility to ensure waste is processed appropriately, so we can protect human health and the environment now and for future generations. It’s not enough just to give your waste to someone else - even a registered carrier. You need to know where your waste will ultimately end up to know it’s been handled properly. We want to work constructively with those in the construction and waste sectors so they can operate compliantly, but we will not hesitate to clamp down on those who show disregard for the environment and the law.”
There are a number of simple, practical steps that businesses can take to ensure that C&D site waste is handled legally.
Construction businesses should check what’s in their waste
- Different waste types need different treatments and so must be correctly categorised to ensure it goes to a site that is authorised to handle it safely. Businesses can also check if their waste is hazardous as different rules might apply.
- If you are removing the waste yourself, you must be a registered waste carrier- registration can be carried out here. When a waste collector is transporting your site waste, you must check they have a waste carrier’s licence from the EA.
- You must also check that the end destination site any waste is taken to is permitted to accept it and has the right authorisations in place. Keep a record of any waste that leaves your site by completing a waste transfer note or a consignment note for hazardous waste which record what and how much waste you have handed over and where it is going.
Waste management industry must adhere to export controls
- Contaminated C&D waste plastic - including low-density polyethylene (LDPE) wrap and film - must be exported with prior consent from the EA as well as competent authorities in transit and destination countries.
- Those involved in the export of such waste must ensure that it meets the requirements set under the relevant export controls, such as being almost free-from contamination; the destination sites are appropriately licensed to receive and treat the waste; and waste is correctly managed once received.
The EA will continue to actively target those who export contaminated C&D plastic waste illegally, including any accredited packaging exporters who issue Packaging Waste Export Recovery Notes (PERNs) against such material in breach of their Conditions of Accreditation.
Businesses involved in the shipment of waste are required to take all necessary steps to ensure the waste they ship is managed in an environmentally sound manner throughout its shipment and during its recycling.
Anyone with information regarding the illegal export of waste including C&D waste plastics can contact the EA’s Illegal Waste Exports team at: [email protected] or anonymously via Crimestoppers on 0800 555 111 or via their website