Hard Dollars
Candlefocus EditorA hard dollar is a way of tracking real costs on a unit or project basis in comparison to a soft dollar which tracks costs on a time-based basis. Hard dollar accounting provides a more accurate and detailed view of a project cost because it factors in a variety of cost components, such as the purchase and cost of raw materials, subcontractor payments, labor costs and overhead.
The most common way to reconcile hard dollars is there reconciliation of costs to a purchased project's budget line item. By looking at the receipts for the purchased project, line item and classing out each cost, the contractor can easily see if the budget line item is being kept within its budgeted amount. This can help contractors know where to make adjustments to their budget, as well as help them know when and how much to bill the client for. This ensures that projects are completed on time and within budget.
In the construction industry, contractors use hard dollars to gain better visibility into their costs and control over the budget. This approach helps reduce the risk of overrunning project costs and allows contractors to adjust their pricing to retain a competitive advantage. Contractors should also be aware of the taxes, labor costs, overhead, and other costs that go into each project.
The use of hard dollar accounting helps organizations have greater transparency and accountability over their spending and project performance. It also helps contractors spend smarter by keeping an eye on their budget and easily tracking changes in the costs associated with projects.
Overall, Hard Dollars is an invaluable tool for contractors and construction professionals, providing them with an efficient way to track and manage their financials for every project. It helps them know when and where to make adjustments to their budget and to ensure that their projects are completed on time and within budget. Hard dollar accounting can provide long-term benefits to contractors and construction professionals who strive to remain competitive and profitable.