Financial executives in the construction industry face growing challenges that impact profitability, cash flow, and financial stability. Rising material costs, labor shortages, and supply chain disruptions squeeze margins, while project delays and inconsistent payment cycles put cash flow at risk. Finance for contractors in this landscape is inherently complex compared to other industries – requiring precise job costing, multi-entity consolidation, milestone-based invoicing, and dynamic cash flow management to maintain project viability.
Despite these challenges, many firms continue to rely on outdated accounting systems and manual spreadsheets, making it difficult for CFOs and controllers to achieve real-time financial visibility, accurately forecast, and sustain profitability. This lack of financial control can lead to missed opportunities, cash flow shortfalls, and compliance risks that threaten long-term business growth.
To gain control over financial operations, reduce risk exposure, and enhance profitability, construction CFOs must first address the key financial pitfalls holding them back.
Top Financial Challenges Construction CFOs Face
1. Cash Flow Volatility Creates Uncertainty and Delays
Managing cash flow is one of the biggest challenges in construction finance. Unlike industries with predictable revenue cycles, construction firms operate on progress-based invoicing, where payments depend on project milestones, change orders, and retainage clauses. This leads to delayed or unpredictable payments, making it difficult to cover subcontractor costs, materials, and operational expenses promptly.
Common cash flow challenges include:
- Inconsistent cash inflows due to delayed client payments
- Long collection cycles that affect liquidity and working capital
- Retainage holdbacks that strain cash reserves
- Rising financing costs to bridge cash flow gaps
Without real-time cash flow forecasting and automated accounts receivable management, firms risk delayed projects, increased borrowing, and profitability erosion.
2. Inaccurate Job Costing Leads to Profit Erosion
Many construction firms struggle to accurately track job costs across multiple projects, leading to cost overruns, incorrect billing, and unprofitable projects. Without a real-time view of labor, materials, overhead, and indirect costs, firms often realize too late that a seemingly profitable project is actually operating at a loss.
Common job costing issues include:
- Underestimating material and labor costs
- Inconsistent tracking of overhead allocations
- Delayed reporting on change orders, impacting project profitability
- Lack of integration between field operations and financial systems
Construction CFOs need accurate, up-to-date financial data to ensure every project remains profitable and that cost overruns are detected early.
3. Manual Financial Reporting Delays Month-End Close
For construction firms operating across multiple business entities, financial consolidation is often a slow, error-prone process. Many CFOs still rely on Excel-based reporting, which requires manual adjustments, intercompany reconciliations, and complex journal entries. This results in:
- Delayed month-end and year-end close cycles
- Increased risk of financial reporting errors
- Limited visibility into entity-wide financial performance
- Compliance risks due to inconsistent record-keeping
A lack of automated financial consolidation prevents CFOs from accessing real-time insights and making data-driven financial decisions.
4. Budgeting and Forecasting Are Static and Reactive
Construction is one of the most unpredictable industries, requiring constant financial adjustments. However, many firms still rely on static spreadsheets for budgeting, leaving them vulnerable to:
- Underestimating project costs and misallocating resources
- Inability to model “what-if” scenarios when costs fluctuate
- Lack of real-time financial insights for proactive decision-making
Without dynamic forecasting capabilities, CFOs often find themselves reacting to financial issues rather than preventing them, increasing risk exposure, and reducing profitability.
Modernizing Financial Management for Construction CFOs
To navigate growing financial complexity, stricter compliance requirements, and shrinking margins, construction firms must move beyond outdated accounting tools. A cloud-based financial management system tailored to the construction industry provides:
- Real-time financial tracking across projects and entities
- Automated job costing to maintain profitability
- Advanced cash flow forecasting to prevent liquidity issues
- Multi-entity consolidation for seamless financial oversight
- Integration with project management tools for end-to-end visibility
Why Sage Intacct Construction?
Built specifically for construction CFOs, Sage Intacct Construction streamlines financial operations, improves cash flow predictability, and enhances decision-making through:
- Real-time job costing to track labor, materials, and overhead with precision
- Automated AP/AR & cash flow forecasting to maintain liquidity and avoid financial gaps
- Multi-entity financial management to simplify consolidation and compliance
- Dynamic budgeting and forecasting tools to adapt to changing project costs
- Seamless integration with Procore, Autodesk, and other industry-leading platforms
By eliminating manual processes, reducing financial bottlenecks, and providing real-time insights, Sage Intacct Construction empowers CFOs to drive profitability, mitigate risk, and strengthen financial stability.
Why Construction CFOs Need to Act Now
The construction industry is facing growing financial pressures, from higher interest rates and rising costs to new compliance regulations and tax complexities. CFOs who modernize their financial operations now will have a strategic advantage, allowing them to:
- Improve cash flow predictability and avoid costly financing gaps
- Reduce manual accounting work and accelerate financial close processes
- Improve profitability through real-time job cost tracking and financial insights
- Strengthen financial controls across multiple entities and projects
With a modern cloud-based accounting and finance system like Sage Intacct Construction, CFOs and controllers can future-proof their financial operations, ensuring long-term growth and resilience in a volatile market.
Next Steps: See How Sage Intacct Construction Can Strengthen Your Firm’s Financial Strategy
If you’re a CFO or controller looking to improve financial oversight, reduce risk, and optimize profitability, Sage Intacct Construction provides the real-time insights and automation tools needed for success.
Contact SWK Technologies today for a personalized demo and discover how Sage Intacct Construction can transform your financial operations.