Automated progress billing and implemented strict job-costing controls.
BuildRight Construction
The Challenge
BuildRight Construction is a custom residential homebuilder operating across the Greater Toronto Area, completing 8-12 projects per year with an average contract value of $600,000 to $1.2M. When they engaged APX, the company was doing approximately $6M in annual revenue with 18 full-time employees.
Their accounting was handled by an external bookkeeper who visited the office once a month to "do the books," which consisted of categorizing bank transactions into broad expense categories. There was no job-level cost tracking — all material purchases, subcontractor payments, and labour costs were recorded against generic GL accounts. The owner knew his overall margins but had no idea which specific projects were profitable and which were money-losers.
Progress billing was managed through a spreadsheet. Change orders — a massive source of profit leakage in residential construction — were tracked verbally. The site supervisor would agree to scope changes with the homeowner, the work would get done, and more often than not, the additional costs would be absorbed into the original contract price because nobody issued a formal change order.
The most dangerous blind spot was WIP (Work-in-Progress). BuildRight had no WIP schedule. They didn't know which projects they had billed ahead of costs (over-billed) or which projects they had incurred costs beyond what they'd billed (under-billed). Ontario's Construction Act holdback requirements added another layer of complexity — with 8-10 projects running simultaneously, the total holdback receivable could exceed $300,000 at any given time.
The APX Approach
The Solution
We deployed a combined Fractional Controller and Bookkeeping engagement with a heavy emphasis on construction-specific workflows.
Job Costing Infrastructure: We rebuilt BuildRight's chart of accounts in Xero using tracking categories for each active project. Every purchase order, subcontractor invoice, and payroll allocation now flows to a specific job code. For labour allocation, we implemented Busybusy (a construction-specific time tracking app). Each crew member clocks in and out against the specific job site they're working on. At the end of each pay period, the timesheet data feeds into Xero, allocating wages, employer CPP/EI, WSIB premiums, and union benefit contributions to the correct project.
WIP Schedule: We now produce a monthly WIP reconciliation on the 10th of each month. For each active project, we compare total costs incurred to date against total progress billings issued. Projects that are under-billed by more than 5% of contract value trigger an automatic alert.
Change Order Workflow: We implemented a simple digital change order process. The site supervisor submits a change order through a mobile form. The controller reviews and approves the cost estimate within 24 hours. A revised progress draw is issued to the client within 48 hours.
Holdback Tracking: We built a holdback aging schedule in Xero that tracks every holdback receivable by project, records the substantial completion date, calculates the 60-day release date per the Construction Act, and feeds the expected cash inflow into the 13-week rolling forecast.
The Outcome
Within 90 days of engagement, BuildRight had real-time visibility into the profitability of every active project. The first monthly job cost report revealed that two projects they believed were profitable were actually running at negative margins due to untracked change orders and material cost overruns.
DSO dropped by 45% — from an average of 48 days to 26 days — primarily because progress draws are now issued promptly and holdback releases are tracked and invoiced immediately upon the 60-day eligibility date.
The owner now uses historical job cost data to inform future bids. Instead of estimating based on intuition, he can pull actual cost-per-square-foot data from completed projects of similar scope, broken down by trade. His bid accuracy has improved dramatically — estimated margins on completed projects now come within ±2% of actual, compared to ±10-15% previously. "For the first time in 15 years of building houses," he told us, "I actually know exactly where my money goes."
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