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Several different types of capital — working capital , debt capital , and equity capital — are common in the construction industry. That’s because other forms of capital — like labor or equipment — can’t generate value if you don’t have enough cash to take on new jobs, acquire materials, or cover overhead.
In the construction industry, WIPs cover the raw materials, plus labor and overhead, used as part of a project. They also serve as a way to check up on the financial health of your organization and ensure that you’re budgeting and forecasting accurately. Which then throws everything off from revenue forecasting to budgeting.
Let’s take a look at the basics of cash flow and how architects can budget their expenses and forecast their income to stay in good financial standing. Forecasting your revenue. Where direct labor is the percentage of salaries that are spent on billable work (rather than overhead time). From forecast to pricing.
In the construction industry, WIPs cover the raw materials, plus labor and overhead, used as part of a project. They also serve as a way to check up on the financial health of your organization and ensure that you’re budgeting and forecasting accurately. Which then throws everything off from revenue forecasting to budgeting.
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