16th September 2013
It only takes one bad job: problematic contract drags construction company into the red
It would seem that it was one problematic contract at North Midland Construction’s building division that dragged the group into debt, despite its rising turnover. What can you learn from their mistakes?
It’s no secret that North Midland, a construction company based in Nottinghamshire, has had a tough start to the year since declaring it was pulling out of the major building market. It has only recently been revealed just how challenging their first quarter was, and how much it lost.
It would seem that it was one problematic contract at North Midland Construction’s building division that dragged the group into debt, despite its rising turnover. Chairman Robert Moyle said, ‘Major problems have been experienced within the building and civil engineering division during the period, with the division recording a loss of £1.58m on revenue of £16.8m.’
The problematic contract has yet to be completed, and, as a result, North Midland delivered a group loss of £0.48m in the first half of the year on revenues up 20% to £90m.
While it is naturally unfortunate that North Midland has found themselves in this position, it serves as a reminder of the importance of clear CVR visibility of all jobs at all times. North Midland has exemplified the fact that it need only take one bad job to bring a company into difficulty, which is why it is so essential to have accounting software specifically designed for construction that is able to track individual project costs. Particularly where large contracts are concerned, businesses need intelligence beyond overall numbers to highlight the profits and losses of each project being undertaken.
The Evolution range of accounting systems from Integrity Software can provide you with the tools you need to not only manage your accounts, but your job costing and all other unique requirements of that of anyone in the construction industry. For further information on how your business could benefit from Integrity Software, contact a member of the team today.
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