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Construction Definitions And Terms
Beginning In The Mid 1960's While Working In My Parents Construction Company - I have accumulated a variety of terms to describe the construction industry. Some of them are intended to be funny, some are serious and the rest are entertaining. Please treat them accordingly.
If you have any other terms you would like to share please leave a comment on the right.
80/20 Rule – 80% of a contractor’s wealth and wellbeing comes from 20% of their activities
24 Hour Bookkeeper - Bookkeeper that sits in your office quietly, no watering, no feeding, available to work around the clock, never wastes company time surfing the web or chatting on cell phone
Apprentice Communication - Point at something and make deep noises from the chest sound like important messages from the brain to hide the fact they know nothing, nothing, nothing
Aggravation Box - Computer with construction accounting software operated by a trainee
Auction - End result of working in the business, focusing on the wrong stuff and bad financial reports
Auditor - Person who goes in after the war is lost and bayonets the wounded
Assets of Company - Cash / Receivables – Payables / Trucks / Tools / Equipment / Material
Assets of Firm - Cash / Business Process / Sales Process / Client List / Predictable Cash Flow
Bad Bookkeeper - Wealth prevention tool keeping contractors from earning more than bookkeepers
Bad Bookkeeper Thinking Patterns - Some of the reasons they do what they do to drive contractors crazy
Bad Bookkeeping - Saving money in the wrong place and making decisions on garbage reports
Bad Numbers - Lead to bad decisions / cash shrinks / business unstable / bankruptcy or failure
Banker Agreement - Pledge to yourself in front of a mirror "Bankers do not do construction and I do not loan money". Then always get job deposits before any work begins and regular construction draws. Perferably every week.
Bankruptcy - Result of saving money on bookkeeping and making decisions on garbage reports
BCA Business Coach - Someone who helps you raise your level of thinking and income
BCA Staff Member - Cheerful, well paid, thinking, responsible adult, Mastermind Team member
BCG Matrix - Graphical representation of Cash Cows / Rising Stars / Question Marks / Dogs
Belly Button Accountability - The one person who is responsible for a deliverable on a construction project
Bid - A wild guess carried out to two decimal places
Bid Collector - Customer looking for cheap contractor
Bid Opening - A poker game in which the losing hand wins
Black Box - Computer with construction accounting software operated by a trainee
Bookkeeper Fully Burdened Labor Costs - The total cost of having a bookkeeper in your office including the cost to fix mistakes, pay for training, drama and overhead
Bookkeeper Training Contractor - Bookkeepers who train the boss to let them come in late, leave early, call friends and relatives, take long breaks, get paid more and do less and less.
Budget Bookkeeping - Listing all deposits from the bank statement as sales income and leads to contractor paying too much in taxes.
Business Failure - No meaningful financial and project management records in the calendar quarter preceding the failure
Business Life Cycle - Start small / grow big / lose shirt / shrink back to small business
Business Plan - A plan to have accurate financial reports to base long and short term decisions on
Business Process Management - Develop a construction business that generates passive income
Business Roundtable - Little round table in tavern with pitcher of beer and four contractors strategizing
Cash - Cash is a fact and profit is an opinion. One will put a roof over your head, clothes on your body and groceries on the table. The other one will impress your banker. Keep your priorities straight.
Competition - Drags all participants to the bottom
Cooperation - Raises all participants to the top
Construction Pioneer - Contractor with flaming arrows in the back from asking the in house construction bookkeeper for accurate financial and job costing reports
C.P.A. - Someone who is qualified to do tax returns and we refer a lot of business to the ones tha only do tax returns.
C.P.A Construction Consultant - Someone who has seen a bunch of tax returns and thinks they know how to run a construction business. More dangerous to the contractors financial health than a drunken car salesman on a backhoe at a gas station, in the dark, digging up live fuel lines.
C.P.A Doing Construction Bookkeeping - QuickBooks setup to make doing tax returns easy while greasing the rails for the contractor to go down the tube and go broke by focusing only on reducing taxes not cash flow and profitable jobs.
Change - The only people who want change are wet babies! Everyone else hates change!
Cheap - Not enough time or money to do it right first time; but plenty of time and money to do it over
Chaos - Always on the dollars coming in; never on the money going out
Client - Someone who buys construction services and is more concerned about quality than price
Comfort Zone - Success you have now since that is what you feel you deserve no more / no less
Completion Date - The point at which liquidated damages begin
Contractor Not A Banker - Student of Business Consulting And Accounting who has mastered the art of managing cash flow properly
Contractors - The people who makes civilization possible by building and maintaining structures
Contractor Gambling - One project away from making it big or going broke
Contractor Chaos - Contractor netting <$100K doing everything his way; especially the bookkeeping
Contractor Cheap - Amateur with customers from Hell and host of the game show “Low Price Leader”
Contractor Income - The average income of the six people they spend the most time with
Contractor Rich - BCA client earning $100K-$200K by building a client base to sell and service
Contractor Student - BCA client net <$100K learning how to get Rich then Wealthy
Contractor Successful - Contractor using timely accurate financial reports to base their decisions upon
Contractor Volume - Loses money on every sale and tries to make it up with a volume of new work
Contractor Wealthy - BCA Client earning $200K + Investing 50K with 100 clients to service
Construction Accountant – Someone who turns piles of numbers into meaningful trends
Construction Bookkeeping - System for setup and maintaining construction bookkeeping
Construction Bookkeeping And Accounting - System for setup and maintaining construction accounting
Construction Accounting – System that combines construction bookkeeping with Quarterly Tax preparation and payroll processing and presents the annual tax preparer with the information for them to prepare the annual income tax return. Construction accounting does not prepare annual tax returns as that is a profession and specialty of its own
Construction Worker Thinking Patterns - Insights into the mind of a typical construction worker
Construction Worker Fully Burdened Labor Cost - Cost of having construction workers on your payroll
Critical Path Method - A management technique for losing your shirt under perfect control
Customer - Someone who buys construction services and is more concerned about price than quality
Deflect-O-Matic Skin - Contractors learn quickly not to take anything personally because whatever someone else says is more about them than about you. This is especially true for remodel contractors when a homeowner has just given them a big deposit check and the contractor is in the middle of demolition
Delayed Payment - A tourniquet applied at the bank balance of any contractor who will allow it
Delusional - Contractor going to learn to use QuickBooks effectively in a few months
Developer - Company looking for a few, good, low priced, high volume contractors they can school
Displaced Aggression - Being angry at someone due to events/circumstances from elsewhere
Emergency Accounting - When taxes, payroll or paperwork piling up causes contractor to seek help from someone to get the "books" caught up, tax reports prepared, payroll processed or other issues
Emergency Bookkeeping - When taxes, payroll or paperwork piling up causes contractor to seek help from someone to get the "books" caught up, tax reports prepared, payroll processed or other issues
Emerging Contractor - Someone who is moving to a little less hands-on role in their contracting company you could be an Emerging Contractor.
Engineer's Estimate - The cost of construction in heaven
Expensive - Goods or services that no matter how cheap they are; do not work
Experience - What you get, when you get, what you don’t want
Failure - A few errors in judgment repeated everyday
Fear - What initiates change or stops progress
Five At Five For Five – The five reports at five o’clock for five minutes that tells you how your business is doing
Fifteen Minutes Too Late - If you think you should fire somebody, you’re already 15 minutes too late
Fully Burdened Rate -Includes all the costs of keeping an employee on the payroll, not just wages
Green Growing Contractor Vs. Ripe Rotting Contractor - Green growing contractors continue learning, questioning and discerning. Ripe contractors have a hardening of the attitudes, know everything and are rotting. Age is not a factor.
Hard Work - Expressway to Retired
If You Know The Answers The Questions Will Not Bother You - In school when you sat for an exam or a test and you knew the material forwards and backwards it was fast and easy. The exams and tests for the classes you struggled with were the opposite. Having a Business Process Management Plan provided you with the answers for the questions about how to run your business because it is something you developed. Not something someone else did and handed to you.
Income - Working for daily money
Insanity - Hiring and firing cheap in-house bookkeepers over and over and over expecting useful reports
Inexpensive - Goods or services that do work beyond the warranty period
It's Not What You Know, It's Not Who You Know That Counts, It's Who Knows You - The value you bring to your network is directly related to who will take your phone call or return your email
Lawyer - Person who goes in after the auditors to strip the bodies
Leveling - When two or more people spend time together the group will level to the strongest personality
Listening - Contractor who asks their client what materials and results they want and give it to them
LMOS - The four big cost buckets, Labor, Material, Other Costs and Subcontractors, used by Fast Easy Accounting to assist construction contractors in determining Job Costing, Job Profitability and Job Costing Services Reports.
Liquidated Damages - A penalty for failing to achieve the impossible
Low Bidder - A contractor who is wondering what he left out
Mastermind Team - BCA Staff and Clients who mentor BCA contractor clients
MAP – Marketing / Accounting / Production / formula for success
Maximize - The process of building and running your construction business to generate highest possible profits for short run so you can spend it all quickly and go broke. Similar to running your pickup truck on the race track as fast as it will go without proper maintenance so it lasts for about ten hours and 1,000 miles before it is destroyed
MR>MC - Wherever marginal revenue exceeds marginal cost do the job
Nepotism Is Relative - Construction company owner hires and promotes his relatives who proceed to chase off qualified field technicians and office staff in an effort to level the contractor down and out of business.
No Financial Reports – Driving on the highway, at night, windows blacked out and being surprised by the crash
Non-Construction Accountant – Dim-bulb wanna be bookkeeper without any construction bookkeeping skills trying to jam retail accounting methods into construction accounting
Not Listening - Contractor who gives their clients what the contractor likes not what the client wants
OSHA - A protective coating made by half-baking a mixture of fine print, red tape, split hairs and baloney
Optimize - The process of building and running your construction business to generate normal and economic profits for the long haul and provide you with a substantial income for current living expenses and a comfortable retirement. Similar to running your pickup truck on the roads and highways at normal safe speeds with proper maintenance so it lasts for ten years and 200,000 miles or more
PAM – Production / Accounting after checks bounce and letters for back taxes / Marketing word of mouth
Personal Assistant - Someone who works part time with big red "S" on back of their cape (Superman / Superwoman) able to run personal and business errands, answer phones, make deliveries, clean restrooms, take messages, memorize a verbal list of to-do items from contractor without writing any of them down, schedule jobs, listen to customer and staff complaints, babysit children and pets, wipe runny noses, clean up spills, make and serve coffee, pay bills, open the mail, go make bank deposits, work on tiny desk, no air conditioning in summer, limited heat in winter, bad lighting, fix broken computers and printers and do the bookkeeping for multiple companies
Peter Principle In Construction - Promoting a journeyman to Project Manager or working foreman without formal training. Leads to Construction Train Wrecks.
People Dependent Vs. Process Dependent - Construction contractors who insist on getting control of people, employees, vendors, suppliers and stakeholders are like Sisyphus doomed to "Push a heavy rock up a hill for all eternity or until the go out of business. Construction contractors who are process dependent are more likely to enjoy the finer things of life that money and freedom can buy.
Pioneer - Contractor with flaming arrows in the back from asking the bookkeeper for accurate reports
Poor Contractors - Have hundred dollar conversations with their mentors and attend the business round table
Process - System to produce predicable quality results and reap dividends for the owners
Process Development - Do it, Document it, and Delegate it
Profit - Cash is a fact and profit is an opinion. One will put a roof over your head, clothes on your body and groceries on the table. The other one will impress your banker. Keep your priorities straight.
Project Manager - The conductor of an orchestra in which every musician is in a different union
Purpose of Firm - Acquire clients and satisfy their needs
Remodel House Process - Forming (Honeymoon), Storming (demolition), Norming (Rough-In), Performing (Paint)
QuickBooks For Contractors - Accounting software for construction companies
Rain Maker - The person in the contractors firm that acquires new clients
Real Money - In Construction the real money is made in the office; not in the field.
Remodel Process - Forming (Honeymoon), Storming (demolition), Norming (Rough-In), Performing (Paint)
Retail Bookkeeper - Worked at store somewhere, thinks all accounting is the same, expensive lesson for contractors
Retired - Means you got tired of them, or they got tired of you
Rich - Income exceeds outgo
ROI - Risk of Incarceration; in most cases the business owner is responsible for unfiled taxes and missed payments, not the bad bookkeeper
Salesperson - Amateur sorter
Sales Process - Documented system for acquiring new clients for the Firm
Shoe Salesman Contractor - Someone skilled in servicing, repairing and being a handyman for houses, commercial buildings and other structures
Signer - Someone other than the business owners with access to your bank account to pay bills or make tax payments....NEVER EVER A GOOD IDEA because everyone runs short of cash and the temptation to "Borrow" with the "Intention" of putting it back is having a high calorie snack with the intention of exercising later to get rid of it!
Simple Plans - Drawings showing what the finished product would look like if it were built in Heaven.
Solution - Properly setup and maintained QuickBooks For Contractors file
Sorter - Professional Rain Maker
Spending Vs. Investing - Poor contractors spend money and wealthy contractors invest money. Why spend money on bad bookeeping when you can invest money on professional contractors bookkeeping services and in the process learn how to increase sales and profits for years to come. Don't just spend money of fuel for your equipment and vehicles understand when it makes financial sense to replace them.
Strategic Bookkeeping Services - Bookkeeping services for construction that understands and applies principles of profit and growth strategies
Strategy of Preeminence - Contractor with the clients best interests in mind
Strike - An effort to increase egg production by strangling the chicken
Success - A few simple disciplines practiced everyday
SWOT - Knowing the company’s Strengths / Weaknesses / Opportunities / Threats and what to do about it
Tax Preparer Doing Construction Bookkeeping - QuickBooks setup to make doing tax returns easy while greasing the rails for the contractor to go broke focusing only on reducing taxes not cash flow and profitable jobs.
Tenant Improvement – Bid, award contract, work day and night, pressure, pressure, pressure, done!
The Contractors Cash Management Accountant - Shares keys to peace of mind by showing you how to optimize your cash flow by properly managing receivables, payables, payroll, payroll tax reports, Washington State sales tax reports, Department of Labor and Industry returns, 941 quarterly returns, 940 annual returns, W-2 and W-3 returns in your construction business regardless of the economy, Sharie DeHart.
TSheets.Com - A Time Card Calculator That Actually Works
Unlicensed Contractor – Someone who thinks they can save their customer money by scamming the system with supposedly lower overhead than likened contractors. All too often they provide FREE labor and material because they cannot sue customers for payment.
Warranty Work - The project that never ends
Wealthy Contractors - Work on building relationships and innovating (faster/better/cheaper)
Wealthy Contractors - Have million dollar conversations with their mentors
Wealth - Not working because you have enough cash to live the rest of your life
Working On Wrong Stuff – You can’t get rich with your head in the ditch
World Of What Is - We live in a world of what is, not what should be
You Can Be Right Or Rich, Pick One - You cannot be both. You pick one on purpose or by default. The more you want to right the less you will be rich and the reverse is true
Profitable Construction - Companies have known about the value of outsourced bookkeeping services for a long time and now you know about it too!
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About The Author:
Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, QuickBooks For Contractors Expert and Xero Accounting Specialist and Bill.Com Certified Guru. This combination of experience and skill sets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and construction accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and Xero accountants to the benefit of all of the construction contractors he serves across the USA. Visit http://www.fasteasyaccounting.com/randal-dehart/ to learn more.
Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Follow Randal on Google+