David Bagwell, of Bagwell Construction Services, in Moorpark, Calif., works with a certified management accountant (CMA) to help him analyze and manage his company.

His CMA consultant, Randall Wheeler with Pathfinder Metrics, downloads Bagwell Construction Services’ financial information from QuickBooks and uses the data to create reports that he and Bagwell review monthly. “We analyze the business, set objectives, and track trends,” Bagwell says. They review the effectiveness of advertising spending and look at profits by project type and by carpenter.

Wheeler says that small businesses are not good at forecasting cash flow, especially when a company is growing. “This is particularly true in the construction industry,” Wheeler says. “Subs have to pay employees, but they do not get paid until they turn in an invoice to the general contractor, and a GC does not pay the invoice until they get money from the owner. The best-case scenario revenue-wise is the worst-case scenario cash-flow–wise. For every month of revenue you add, you have to carry one to three months of additional cash.”

Wheeler’s corporate performance management report helps owners to measure key performances and track indicators. “I will help owners identify a trend or anomaly before they become big problems,” he says.

“Working with [Wheeler] has helped us survive,” Bagwell says. “We had layoffs last year before the holidays, which helped us save on overhead before things got worse. He helped us decide where to cut staff and where I should concentrate my time.” Bagwell says that most owners are caught up in the day-to-day work and need this type of honest feedback to help them steer the company.

Wheeler says that most of the nation’s 30,000 CMAs work for large companies, but that is slowly changing. Pathfinder Metrics was the first CMA firm in the country. Wheeler charges a flat fee for his monthly management reports and financial plans, and an hourly rate for special projects. To find a CMA, visit the Institute of Management Accountants at www.imanet.org.

—Nina Patel, senior editor, REMODELING.