Governor Gavin Newsom signed California Senate Bill 61 (SB 61) into law, placing a statewide cap on retention payments in private construction contracts. This new legislation aligns private-sector retainage rules with the 5% standard already in place for public works—providing a more equitable, cash flow–friendly environment for contractors, subcontractors, and small businesses across the state.

For middle-market businesses with active credit facilities or commercial term loans, bank covenant compliance is non-negotiable. Waiting for quarter-end historical statements to calculate Debt Service Coverage Ratio (DSCR) or Senior Funded Debt-to-EBITDA creates severe default risks. Recent commercial lending data indicates that over 40% of technical covenant breaches occur due to unmodeled working capital fluctuations rather than true operational failure. Implementing a rolling 12-month dynamic financial model gives executive teams forward-looking visibility, allowing proactive discussions with lenders before a breach occurs and preserving critical capital relationships.

In the world of construction accounting, Work in Progress (WIP) refers to the value of work that has been completed but has not yet been billed. Accurate WIP tracking is vital for financial reporting, effective project management, and ensuring that revenue recognition aligns with actual project progress. WIP reporting is a critical foundational building block when optimizing product and service mix for profitability.

For middle-market manufacturers and industrial operators, standard financial statements often obscure true product profitability. Relying on top-level gross margin metrics without granular job costing, burden rate allocations, and labor variance tracking masks severe product-line margin fade. Implementing an operational cost accounting framework enables leadership to identify low-margin SKUs, optimize machine overhead rates, and protect working capital against inflationary pressure.

In commercial construction and industrial manufacturing, chasing top-line volume over gross profit margin is a primary driver of operational distress. High fixed overhead, material price volatility, unmanaged change orders, and labor shortages can rapidly convert large backlogs into phantom profitability. Achieving sustainable growth requires shifting leadership focus from top-line revenue to precise job costing, fully burdened estimating, strict role separation between sales and project management, and disciplined Work in Progress (WIP) margin controls.

Leadership Development and Execution: Building Relationships and High-Performing Teams

Leadership lessons can often be found in nature, where teamwork, trust, and adaptability are key to survival. Jeff Ruley’s article, Leadership in Nature: The Wolf Pack, highlights how wolves exemplify strong leadership by maintaining structure, collaboration, and accountability within their pack. Just like in a wolf pack, effective leadership in organizations requires clear vision, trust, and the ability to foster high-performing teams.

We have a passion for cycling (both mountain bikes and road bikes) centered on work/life balance. We believe it’s one of the keys to providing best-in-class service.

We are often asked about the places we ride, the equipment we use, and our clothing preferences. Why? Who knows but it’s a great topic & nice icebreaker when getting to know people.

Below are some resources for you.