Randalism: A Partnership is the only ship designed to sink.
However, we understand your preference, so I would like to talk about it in this blog post.
Joint ventures are a bit like change orders. They can be an incredible opportunity to make or lose much money very quickly. Almost as quick as betting money on a roulette wheel in a casino.
Joint Ventures have their own accounting rules. The devil is in the details. How costs and profits are shared among the participants depends on how the joint venture is structured and the terms of the agreement.
Contractors with annual sales of less than $10,000,000 often get together to work on a specific project. They find a friendly competitor to supply labor and equipment for a percentage of the job, hourly fee, or a flat number. This could technically be a "Joint Venture"; however, the time and scope are generally short and sweet. For example, a concrete contractor may have a large project requiring more finishers than on staff.
The construction manager is conditioned to avoid emergencies by being proactive. It is necessary to have systems in place to deal with emergencies when they arise. After the crisis has passed, the effective project manager evaluates the root cause of the trouble and implements change in the system to avoid a repeat performance.
It’s also one thing to manage workers when they’re all in the same place at the same time. However, when you run a construction business with field workers, things can get a lot more challenging. Not only are you typically not on the same job site as them, but you might also have workers scattered over a variety of sites and projects.
Moreover, Construction Companies have unique bookkeeping needs. Some bookkeepers and bookkeeping systems may cost you more than they are worth in salary, fees, and loss profits because you cannot get QuickBooks reports and financial reports when you need them. Chances are, you are suffering from bookkeeping pain, and your bookkeeper or accountant is overwhelmed trying to figure out how to do construction accounting.
Good bookkeeping leads to informed decisions. Avoiding your bookkeeping is dangerous, however. For example, not knowing your construction company's financial situation can result in a series of missteps that could ultimately cost you your business.