Saturday, April 6, 2013

The 5 Numbers Every Modular Home Builder Needs

Your accounts receivable coming due:
One of the most important numbers, at least for a modular home builder, is the amount of money you expect to come in during the next month. At the very least, you need to know if you’ve got enough coming in to cover your bills.

Your accounts receivable past due: 
There will always be clients and lenders who fail to get payments to you on time. But the actual amount is where problems can creep in. If this number gets too high, you need to sit down and start making some noise with the people who owe you money. The speed that modular construction can give you might also make a bank slow in processing your draws.

Your accounts payable for the next month: 
Just as you need to know how much you’ve got coming in, you also need to be aware of how much will be going out. Your accounts payable is probably a lot lower than a company that needs to maintain inventory, but you need to keep it in balance with everything else.

Your average monthly expenses: 
While you might have a good idea of the expenses immediately coming up by taking a look at your accounts payable, you need to know what that number is supposed to be every month, so that you can tell if you’re having a lot of unexpected expenses. Every home you build should have an updated cost sheet at least once a week. If you have a bookkeeper running you’re A/P and A/R, you might want to consider requiring two signatures on every check. Review your online bank balances daily for any unauthorized funds transfer.

Your yearly income to date: 
With your yearly income to date close to hand, you can calculate a lot of other numbers. While it’s not the nicest example to think about, you can estimate how much you’ll owe in taxes and ensure you’re saving enough.

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