Homebuilding Assets Are Like Your Good Looks - You Want To See These!

In the first of my homebuilding accounting series (where I'm breaking down the 5 main accounting sections of your financial reports), I'm going to focus on Assets.

Assets are anything that has value in your business. Primarily, it's anything that IS - or - COULD BE Cash if you needed it to be.

Here are just a few things that could be Assets in your Homebuilding Company:

• Cash (kind of obvious, huh?)
• Positive Balances in your Checking Accounts
• Amounts Due TO You from others (also known as "Accounts Receivable")
• Investments Owned by Your Company
• Inventory On-Hand - While you may not typically have "inventory" on shelves, the homes you are building for your customers (or as SPECs) are often your inventory (since you'll be turning these into cash when they settle).
  • You'll likely see "Inventory" listed as Work In Process (WIP)
• Owned Land and Buildings
• Vehicles
• Construction Equipment
• Furniture and Computers

Where do you typically see these things listed in your financial reports? They'll be on your Balance Sheet that is presented to you by your Accounting Professional.

Like the Subject Line of this email, Assets are "like your good looks." It's always good to see these on your financials.

What Assets did I forget to list? It's ok. You can REPLY to this email and tell me. I promise I'll read your reply.

Next week, we'll dive into LIABILITIES. Until then - Happy Building!

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-Brad

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