How Strategic Financial Overhauls Empowered S&J Miller for Sustainable Growth and Large…
From cash-basis chaos and inventory blindness to reviewed financials, bonding eligibility and profitable growth.
- Client Type
Commercial construction company specializing in finish carpentry (door installation, trims, bath fixtures and accessories)
- Industry
Construction (Multi-family apartments and hotels)
- Annual Turnover (pre-crisis)
~$40M in annual revenue
Primary Challenges Before Engagement
- Cash-basis accounting blocked ability to secure $5-9M bonding for major projects
- $4.5M in inventory unrecorded on balance sheet; no tracking or visibility
- No work-in-progress reporting; project profitability impossible to track accurately
- Overwhelmed accounting team; outdated ERP bypassed for ineffective ad-hoc systems
- No budgeting or forecasting tools; banking failed to optimize idle cash
The Challenge
Bonding Blocked by Cash-Basis Accounting
Cash-basis accounting prevented CPA-reviewed financials needed to secure $5–9M bond for large-scale construction projects.
Financial Blind Spots & Accounting Weakness
No inventory tracking, no WIP reporting, no budgeting or forecasting; zero visibility into true project profitability or costs.
Operational & System Chaos
Overwhelmed bookkeeper, bypassed ERP system, disjointed ad-hoc inventory program creating inaccuracy and inefficiency.
Inventory Invisibility & Cash Mismanagement
$4.5M in inventory unrecorded on balance sheet; banking relationship failed to optimize idle cash or streamline transfers.
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Nperspective’s Intervention
(a) Inventory Overhaul & Balance Sheet Correction
- Conducted comprehensive physical inventory count across two warehouses, identifying and recording $4.5M in inventory on the balance sheet.
- Established formal receiving, tracking, and reporting processes; integrated inventory management directly into QuickBooks, eliminating ineffective third-party software.
(b) Transition to Accrual Accounting & GAAP Compliance
- Converted accounting system from cash basis to accrual basis, ensuring costs and revenues properly matched under GAAP.
- Implemented monthly journal entries for prepaid expenses, accrued payroll/payables, and lease accounting under new regulations (right-of-use assets and liabilities).
(c) WIP Reporting & Project Profitability Visibility
- Created work-in-progress (WIP) reports to calculate over/under billings and match revenue recognition with project costs.
- Established processes for improved project margin visibility; transitioned toward automated WIP reporting as part of new ERP system rollout.
(d) Accounting Department Reorganization & System Modernization
- Hired new staff accountant to assist with AP, inventory, and monthly reporting; replaced underperforming personnel to improve team efficiency.
- Initiated migration from QuickBooks Desktop to Sage Intacct Construction (cloud-based ERP) to automate WIP reporting and enable real-time project and financial visibility.
(e) CPA-Reviewed Financials & Bonding Enablement
- Successfully delivered CPA-reviewed financial statements that adhered to accounting standards.
- Enabled client to qualify for and secure $5–9M bond needed for large-scale construction projects.
(f) Budgeting, Forecasting & Banking Optimization
- Implemented formal budgeting process to improve cost control; began training stakeholders to track actual vs. budgeted costs for materials.
- Transitioned banking relationship to Seacoast Bank with sweep accounts to optimize cash management, earn interest on idle funds, and streamline intercompany transfers.
Outcomes & Results
Inventory Accuracy & Balance Sheet Integrity
- $4.5M in inventory properly recorded on balance sheet, eliminating blind spots and providing accurate financial position.
- Formal inventory tracking and reporting processes reduced waste, over-purchasing, and improved operational visibility.
Bonding Eligibility & Growth Capacity
- CPA-reviewed financials delivered, enabling S&J Miller to secure $5–9M bonding for large-scale construction projects.
- Accrual accounting transition within 30 days positioned company for sustainable growth and major project opportunities.
Project Profitability & Financial Visibility
- WIP reporting established project costs and margins now tracked accurately throughout lifecycles.
- Leadership gained clear visibility into profitability, enabling informed decisions on project selection and resource allocation.
Operational Efficiency & Team Strength
- New staff accountant hired, accounting operations restructured, workload balanced, team efficiency improved.
- ERP migration to Sage Intacct Construction initiated, automating WIP reporting and real-time financial visibility for long-term scalability.
Cash Management & Planning Foundation
- Banking relationship optimized with Seacoast Bank, sweep accounts now earning interest on idle cash, streamlined intercompany transfers.
- Budgeting and forecasting foundation laid, stakeholders trained to monitor actual vs. budgeted costs, enabling better tax and cash flow planning.
Financial Stability & Strategic Positioning
- From cash-basis chaos to GAAP-compliant, reviewed financials. S&J Miller now positioned for profitable growth and large-scale project success.
- Process efficiency achieved through accrual accounting, lease standards compliance, and reorganized accounting operations.
Key Learnings
- Cash-basis accounting blocks growth opportunities. Accrual-based financials and CPA review are essential for securing bonding and accessing large-scale projects.
- Invisible inventory costs real money. Without formal tracking and balance sheet accuracy, companies over-purchase, waste resources, and lack financial clarity.
- WIP reporting isn't optional for construction firms. Project profitability and margin visibility require structured processes to match costs with revenue recognition.
- Modern ERP systems drive scalability. Outdated, bypassed systems create chaos; cloud-based platforms automate reporting and enable real-time decision-making.
- Financial discipline unlocks operational capacity. Budgeting, forecasting, optimized banking, and proper staffing transform overwhelmed teams into efficient operations.
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