187 - Mastering Profitability in Business with Ruth King
In the heat of day-to-day operations, it's common for contractors to put financial management on the back burner. However, neglecting the books can have far-reaching consequences beyond dollars and cents.
In this episode, Ruth King, well known as the “Profit and Wealth Guru”, joins Khalil and Martin to discuss profitability and the role of accurate and timely bookkeeping in making informed business decisions.
Time Stamps
01:38 - Luca Pacioli & Bookkeeping
04:26 - The Role of Bookkeeping to Contractors
07:44 - Ruth's Entrepreneurial Journey and Business Ventures
10:21 - The Role of Bookkeeping in Detecting Fraud
15:12 - Revenue Generation
15:38 - The Importance of Billable Hours in Construction
18:08 - Calculating Billable Hours
25:14 - Warning Signs of a Cash Flow Crunch
27:45 - Challenges in Managing Inventory & Deposits
31:21 - Understanding Deposits and Inventory Management
35:23 - The Importance of Hiring Qualified Bookkeepers
37:12 - How to Get Out of a Cash Flow Crunch
39:37 - The Financially Fit Business
40:40 - Signs of Financial Statement Inaccuracies
42:03 - Using Software in Financial Management
46:41 - The Foundational Role of Books
50:28 - More from Ruth King
52:17 - Outro
Quotable Moments from the Show
"In our industry, in construction, we generate revenue through billable hours. If you do not have a billable hour, you don't have revenue." - Ruth King
"Decreasing current ratio should be the greatest warning sign to you that there is a problem with productivity. There's a problem with profitability. Figure it out or get help. One of the two." - Ruth King
"It's [Bookkeeping] actually easier to do than all the technical stuff you learned. Period. It's just we weren't trained in it. We weren't taught it. We didn't take it in school." - Ruth King
"I've been in business for 50 years now and I have never seen a business thrive without books. Ever." - Martin Holland
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Resources
AIPB Bookkeeping Hiring Test
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