Why Your Jobs Look More Profitable Than They Are: Indirect Allocations and Overhead in Construction

If your indirect costs aren't tracked—they're hiding. And what they're hiding is your true profit margin.   In this episode of Construction Genius, Eric sits down with Kathe Barrington, CPA and fractional Controller/CFO with 20 years of construction experience, to break down one of the most misunderstood areas of construction accounting: indirect cost allocations, equipment costing, and overhead structure.   Kathe explains the difference between indirect costs and G&A, how to think about owned equipment usage rates, what a clean chart of accounts should look like, and why your bank and bonding company will notice if you're burying job costs in overhead. She also shares her favorite phrase that every construction leader should internalize: every dollar needs a home and a purpose.   In this episode, you'll learn: The difference between indirect costs, overhead, and G&A—and why it matters How to cost and track owned equipment using market usage rates Why inaccurate chart of accounts structure distorts job profitability How misallocated costs affect banking, bonding, and strategic decisions Why your estimators and accounting team need to speak the same language The two biggest areas of indirect cost leakage to look for first Why you should review indirect allocations monthly, not annually   This is Part 4 of the Construction Accounting Series with Kathe Barrington. Previous Episodes in This Series Ep. 357 - WIP Reports Made Simple: The Key to Stopping Hidden Job Losses Ep. 359 - How to Use Your WIP to Protect Cash and Grow Profitability Ep. 364 - Why the Field and Accounting Are Both Right  

Most construction companies treat pre-construction as an estimating department. That mindset is costing them projects. In this episode, Eric sits down with Sam Potts, Director of Pre-Construction at JP Cullen—a $900M family-owned, self-performing GC out of Wisconsin. Sam explains why pre-con managers should be treated like project managers, how to align budgets around what actually matters to the owner, the power of a "yes-if" mentality when clients make unexpected requests, and what separates a good estimator from a great pre-construction leader. In this episode, you'll learn: •       Why pre-con's real purpose is setting your project teams up to win •       How discovery meetings and the right questions unlock owner priorities •       The Risk Opportunity Log: a tool to eliminate budget surprises •       Why cost transparency is the fastest way to build trust •       How AI is starting to impact takeoffs—and the risk to junior estimator development •       The leadership shift from directing to coaching that changed Sam's career If you want pre-construction to become a true competitive advantage for your company, this episode is a must-listen.  

Only 2.5% of contractors finish on time and on budget. Here's what they do before the job starts. In this episode, Eric Anderton breaks down Part 1 of FMI's 2025 Project Management Study — 243 executives, 84 PMs, real contractors, real numbers. What they found isn't revolutionary. It's the same truth Vince Lombardi was teaching in 1959. Preparation before the work starts. Accountability to a consistent standard. Everyone owning their role before the first crew hits the job site. The three things separating high performers from everyone else: PM involvement in estimating, structured pre-execution planning, and field buy-in before mobilization. The one role responsible for making all three happen — or failing to — is your project executive. Three Numbers Every Owner Should Know PM involvement in estimating → margin attainment jumps from 55% to 78% Thorough pre-execution planning → profit margins hit 81% vs. 50% of the time Strong field alignment → on-time/early completion 76% vs. 58% of the time   Hosted by Eric Anderton — leadership coach, executive coach, and 20+ year veteran of the construction industry.   FMI 2025 Study: https://fmicorp.com/insights/thought-leadership/2025-project-management-study-part-1 Executive coaching for your PX — book a call: https://10minuteswitheric.youcanbook.me/ Construction Genius book: https://www.amazon.com/Construction-Genius-Effective-Hands-Leadership/dp/B0BHTRDY1T/ The Shift leadership course: https://theshift.constructiongenius.com/  

Construction companies don't go out of business because they lack work. They go out of business because they take on too much work and lose discipline. In this episode, Eric Anderton talks with DPR Construction leaders Camilo Garcia and Mike Humphrey about how DPR built the discipline that carried the company through multiple boom-bust cycles—from early hypergrowth to market volatility in the 2000s, the 2009 downturn, and today's AI-driven data center surge. They explain how DPR protects its culture through disciplined hiring, empowers teams with freedom within a framework, stays selective with customers and markets, and scales using operating ranges based on people—not just revenue. If you're leading a construction company in a high-demand market, this episode shows how DPR stays disciplined while growing.   Resources: DPR Construction: https://www.dpr.com/Connect with Camilo on LinkedIn: https://www.linkedin.com/in/camilo-garcia-pineros-79172ba/ Connect with Mike on LinkedIn: https://www.linkedin.com/in/mike-humphrey-b589695/

The Inflation Reduction Act is driving massive investment into construction—but the registered apprenticeship requirements tied to those tax credits are creating confusion and risk for many contractors. In this episode, Eric Anderton talks with Andy Seth, founder of Apprentix, about a smarter approach to complying with Inflation Reduction Act apprenticeship requirements—one that reduces risk, protects margins, and supports business growth. They break down how IRA apprenticeship compliance really works, why sponsorship matters, and how contractors can get compliant quickly without disrupting operations. If Inflation Reduction Act projects are affecting your bids or backlog, this episode will give you clarity and confidence.   Connect with Andy Apprentix: https://www.apprentix.ioApprenticeship Launch System (Book): https://a.co/d/1Lxl0rXLinkedIn: https://www.linkedin.com/in/andyseth/ X: https://x.com/mrasethEmail: [email protected] Phone: +1 (303) 900-2215 Restaurant Mentioned: https://www.altenorestaurant.com/  

Doug Ransom began his construction career at 18 as a union carpenter apprentice. Thirty years later, he serves as General Superintendent at JP Cullen & Sons, a fifth-generation commercial construction company. Learn more: https://jpcullen.com/ In this episode, we discuss: Transitioning from foreman to superintendent Managing construction field teams Leadership development in commercial construction Field vs. office conflict Multi-generational construction company succession   Related episodes on construction succession planning: Episode 170 https://www.constructiongenius.com/podcast/how-to-run-a-successful-family-business-with-george-cullen-ep-170/ Episode 186 https://www.constructiongenius.com/podcast/secrets-of-a-successful-multi-generational-company-with-the-cullen-clan-ep-186 Connect with Doug: https://www.linkedin.com/in/doug-ransom-a58018285/ Restaurant recommendation: https://www.fairchildrestaurant.com/

What does it really take to become a high-performing construction leader? In this episode of Construction Genius, Eric Anderton talks with Katharine Hamer, Project Manager at DPR Construction (San Diego), about leadership development, accountability, and culture in the field. From her background as a Division I lacrosse athlete to managing complex projects across higher education, healthcare, data centers, parking structures, and life science / biotech, Katharine explains how DPR develops leaders through discipline, humility, and real field experience. You'll hear how accountability works without blame, why psychological safety matters on tough projects, and how young professionals can grow fast without skipping critical steps. Links: DPR Construction: https://www.dpr.com/Restaurant Recommendation (San Diego, CA): Dirty Birds Bar & Grill Restaurant Link: https://www.dirtybirdsbarandgrill.com/

Estimating isn't just math—it's how contractors decide which risks they're willing to own. In this episode of the Construction Genius Podcast, Eric Anderton talks with Chris Clausing, Director of Program and Curriculum Innovation for Construction at Colibri Group, about why estimating is still more art than science—and why contractors consistently miss the risk margin that protects profit. Drawing on 25 years as a commercial general contractor, Chris explains how regional differences, niche discipline, poor handoffs, and earned value blind spots quietly erode margins. They also discuss how AI can help identify estimating risks—if it's adopted thoughtfully. If you've ever won work that you later wished you hadn't, this episode will change how you think about estimating.  

Can you really deliver speed, quality, and cost in construction—without tradeoffs? In this episode of Construction Genius, Eric Anderton sits down with Ryan Teicher, CEO of REDCOM Design & Construction, to unpack how a fully integrated design-build model eliminates silos, accelerates delivery, and aligns teams around client outcomes. Ryan explains how bringing architecture, engineering, estimating, and construction under one roof leads to faster decisions, fewer conflicts, and better cost control. The conversation dives into early design consulting as a risk filter, sales as true client advocacy, maintaining client intent from concept through construction, and why strong leaders must be willing to walk away from the wrong projects. This is a practical, no-BS conversation about design-build done right, along with CEO-level insights on leadership, culture, and scaling a construction company.   🔑 Topics Covered Why integrated design-build can deliver speed, quality, and cost Early design consulting as risk management Turning sales meetings into working design sessions Maintaining client intent throughout construction Red flags that signal when to walk away from a project Breaking silos through culture, space, and leadership The CEO shift from operations to growth   Ryan Teicher is the CEO of REDCOM Design & Construction, a fully integrated commercial design-build firm. He brings over 25 years of leadership experience across residential, commercial, and industrial construction, including managing complex projects for Merck, Citi, Siemens, Santander, and Quest. Since joining REDCOM in 2023, Ryan has focused on driving speed to market, operational efficiency, and cross-discipline collaboration by bringing architecture, engineering, and construction under one roof. He lives in New Jersey and serves on his town's planning board, environmental commission, and as president of his synagogue.   🔗 Links & Resources REDCOM – About Us https://www.redcomllc.com/about-us/ REDCOM – Project Portfolio https://www.redcomllc.com/portfolio/ REDCOM on LinkedIn https://www.linkedin.com/company/redcom-design-&-construction-llc/ Ryan Teicher on LinkedIn https://www.linkedin.com/in/ryan-teicher/ Construction Genius https://www.constructiongenius.com  

Kathe Barrington is a CPA specializing in construction. Before finding her true passion in cost accounting and then the construction industry, Kathe worked in different industries, including software, hardware, real estate, retail, and non-profits. Working directly with owners, banks, bonding agents, and CPA firms, Kathe helps bringing the entire team together so that they can make the best management decisions for the organization's sustainability and future growth. Some of the services she provides include budgeting, forecasting, cost segregation, basic bookkeeping, and software implementations.  Key Takeaways - Understanding over-billings and under-billings. - Why under-billing is always a warning sign.  - The impact of billing patterns on bonding and banking relationships. - Owner responsibility and accountability. - Over-billing and customer relationships.  - Treating over-billed cash with discipline and clarity.   Connect with Kathe Barrington LinkedIn - linkedin.com/in/kathe-barrington-a6346337/  Website - kbcpa.biz/  FaceBook - web.facebook.com/people/Kathe-Barrington-CPA/100072271041746/   Previous episodes with with Kathe Barrington WIP Reports Made Simple: The Key to Stopping Hidden Job Losses How to Use Your WIP to Protect Cash and Grow Profitability Physical Progress vs. Financial Reporting in Construction Projects