CATEGORY | Construction Management Finances

What Is A Construction Purchase Order?
Construction Documents & Templates

What Is A Construction Purchase Order? 13 Things To Include In A PO

When we buy groceries, it’s a fairly straightforward process. We pick what we want, pay for them and leave. No paperwork or conditions required. When buying materials, building components or renting equipment, things are a bit more complicated. It makes sense – there’s not much risk in buying a dozen eggs and a gallon of milk. What’s the worst that can happen? In construction, we must consider schedule, timeframes, payments, scope of work and performance specifications – and that’s just the basics. What is the seller can’t or won’t uphold their end of the deal? What if there’s improper workmanship, poor quality, accidents like fires and floods? Damage during transportation? With so many factors to consider, simply buying materials and riding off into the sunset isn’t an option. This is the purpose of a Purchase Order (P.O.) in construction. What is a construction Purchase Order, exactly? Here are 13 things to always include in a P.O., plus a sample Purchase Order to reference!

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How Does Progress Billing Work In Construction?
Construction Management

How Does Progress Billing In Construction Work? The 8 Essential Steps

In the business of construction, it’s all about money. Not just profit and bonus checks, either. I’m talking about cash flow (via Accounting Tools). If a building or infrastructure project is going to be built, someone is paying for it, and someone else is being paid for it. This is how a construction project gets built on the most basic, fundamental level. As you can imagine, there’s a lot more to it than that. For the vast majority of projects out there, projects are paid for as they go. This is done through a process call progress billing. How does progress billing work in construction? In this article, we’re breaking it down into each fundamental step.

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Time & Material Contract: Advantages And Disadvantages
Construction Management

Time & Material Contracts In Construction: Advantages & Disadvantages

In construction, time and material refers to a contractual arrangement where the client pays the contractor for their exact costs of construction, plus a fixed overhead and profit margin. The costs the client pays are the exact costs of the contractor, including labor, equipment, materials and other subcontractors. Overhead and profit margins are typically billed on a percentage of the costs. There are many differences between a lump sum contract and a time and material contract. Let’s explore the advantages and disadvantages of time and material contracts, plus some tips!

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About This Topic

Construction projects cannot get done without money. Funding, budgets, cost control, cash flow and profitability all play major roles in the construction industry. Every construction manager and contractor spends a significant portion of their time managing these variables. Therefore, it’s essential that Project Managers in these fields learn all about construction management finances. Browse our articles related to construction contracts, cost estimating, change management (i.e. change orders), schedule of values (SOV), billing cycles, cost forecasting (i.e. cost-to-complete) and more.