5 Common Financial Mistakes Building Contractors in the DMV Make
The DMV is one of the most competitive and expensive regions for construction. Many contractors don’t lose money from a lack of work—but from preventable financial mistakes.
Here are the five most common errors we see, and how to avoid them.
1. Underbidding Projects
Cutting bids to win contracts without accounting for permits, taxes, or delays erodes profit margins. Projects in DC often carry higher compliance costs compared to Virginia or Maryland.
2. Poor Labor Cost Tracking
Union rates, subcontractor fees, and overtime vary widely across jurisdictions. Without detailed tracking, labor overruns quickly add up and shrink profits.
3. Ignoring Compliance Costs
Local compliance impacts the bottom line:
- Virginia: BPOL taxes
- Maryland: Business licenses
- DC: Franchise taxes
Contractors who overlook these costs face fines and reduced profitability.
4. Mixing Business & Personal Finances
Blending personal and business accounts clouds financial records and raises IRS audit risk. Keeping accounts separate is essential for both compliance and clarity.
5. Skipping Regular Financial Reviews
Contractors who don’t review job cost reports or P&Ls consistently miss warning signs until it’s too late. Regular reviews prevent surprises and protect cash flow.
How a CPA Prevents Mistakes
At Shahbaz & Associates, CPAs, we help contractors avoid costly errors by:
- Building accurate bidding systems.
- Tracking costs across multiple DMV jurisdictions.
- Providing reports that highlight problems early.
Contact Shahbaz & Associates, CPAs today to strengthen your financial foundation and keep your construction business profitable.