Construction Business Issue Review

What Is a Construction Business Issue Review?

A Construction Business Issue Review gives you the time and experienced input to examine one business issue properly. We start by discussing the problems you are experiencing and identifying the issue that warrants detailed investigation. We then work through that issue with you rather than trying to cover every part of the business at a superficial level.

The scope depends entirely on the issue selected. If cash flow is the problem, we may need to examine Project margins, payment timing, working capital, forecasts, overheads and management accounts. If the issue is poor Project performance, we may need to look further back at estimating, Contract terms, procurement, Project Management, Variations and Contract Administration.

An issue can therefore take us into several parts of the business. The review remains focused on the selected issue, with each area examined because it helps us understand that issue and decide what should be done about it.

What Issues Can We Review in a Construction Business?

The Issue Review can be used for a financial, commercial, contractual, management or operational problem. The issue does not need to fit neatly within one of those categories.

For example, we can undertake an in-depth review of:

• cash flow problems;
• falling or inconsistent Project margins;
• unexpected Project losses;
• estimating and tendering problems;
• high-risk Construction Contracts affecting business or Project performance;
• poor Variation identification, pricing or recovery;
• Contract Administration problems;
• Project delivery systems that are not working consistently;
• unreliable or late management reporting;
• financial information that does not give owners a clear view of performance;
• increasing overheads or poor cost control;
• Project Management problems;
• management structures and responsibilities;
• business systems that have not kept up with growth;
• excessive reliance on an owner or key employee; or
• another defined problem affecting the performance of the Construction Business.

The issue you first raise with us gives us a starting point. We still investigate what is producing the result rather than assuming the first explanation is correct.

How Do We Review a Construction Business Issue?

We start with a detailed discussion with the owners or relevant decision-makers. We want to understand what has been happening, when you first noticed it, what information you already have and what has already been tried.

From there, we identify the information needed to investigate the selected issue. A cash flow problem requires different information from a Contract Administration problem. We do not ask for documents simply because they exist or run through a standard checklist that treats every Construction Business in the same way.

We Follow the Issue Through the Business

Construction business issues rarely respect job descriptions or accounting categories. A poor Project margin, for example, may require us to look at the original estimate, the Contract signed with the Principal, procurement decisions, labour performance, Variation recovery and the accuracy of Project reporting.

That does not turn the engagement into a whole-of-business review. Each part of the business is being examined for a specific reason: to understand the selected issue.

We Test What the Information Is Telling Us

What people believe is causing a problem and what the business records show are not necessarily the same. If management believes Project delivery is responsible for poor margins, we may find that the Project was already carrying an inadequate margin when it was tendered. Conversely, an adequately priced Project can lose margin through procurement, labour performance, unmanaged scope changes or poor Contract Administration.

We work through those differences with the people who understand the business and Projects. Financial reports, Contracts and Project data are useful, but they need to be considered alongside what was actually happening in the business when the decisions were made.

What Do We Look at During an Issue Review?

There is no standard document list because the information required depends on the issue. We agree the initial information with you and request other documents or data where the investigation shows they are relevant.

Depending on the issue, we may examine financial reports, management accounts, cash flow forecasts, budgets, Project margins, estimates, tender assumptions, Construction Contracts, Variation registers, Project reports, labour costs, subcontractor costs, procurement information, overheads, management structures and business processes.

We may also speak with the people responsible for the relevant part of the business. A Project Manager, estimator, Contracts Administrator, bookkeeper or manager can hold information that is not apparent from a spreadsheet or Contract.

What Happens When We Identify the Cause of the Issue?

Identifying what is happening is only part of the Issue Review. We then work through what you can do about it.

The appropriate response depends on the issue and how far it has developed. A Contract Administration problem could require changes to responsibilities, procedures, training, Project reporting or commercial oversight. A cash flow issue could require work on forecasting, Project margins, payment timing, overheads or working capital. Where several actions are available, we help you decide which are justified by the problem and the resources available to the business.

We also identify problems that should not be included in the immediate response. Owners dealing with a difficult period often have a long list of things they would like to improve. Trying to fix everything at once can consume management time without resolving the issue that prompted the review.

What Do You Receive From a Construction Business Issue Review?

You receive an in-depth review of the selected issue, our findings about what is happening and advice about the actions available to address it. We agree on the precise deliverable when we scope the review, because the appropriate output depends on the issue.

The value of the review is in being able to work through the issue with Rachelle and Shannon in detail. They can challenge assumptions, examine the available information from different commercial and financial perspectives and work through the practical consequences of the available options with you.

Where the review identifies another issue that warrants separate investigation, we will tell you. We do not expand the engagement into another review without discussing it with you first.

Who Carries Out the Construction Business Issue Review?

The Construction Business Issue Review is carried out by Rachelle Hare and Shannon Drew.

Rachelle is a Construction Lawyer, Commercial Lawyer, Commercial Manager and Business Adviser with more than 25 years of experience in the Construction Industry and related industries around Australia. Her background includes top-tier private practice, senior Australian Government legal roles, engagements as General Counsel and Senior Legal Counsel, and six years working full-time as a Commercial Manager on major ICT and Construction Projects.

Shannon is a Management Accountant and Business Adviser whose work includes management reporting, financial analysis, cash flow forecasting, budgeting and Virtual CFO services. Having both advisers involved allows a financial issue to be tested against what is happening commercially and operationally, while commercial and operational problems can be tested against the financial results they are producing.

What Happens After the Issue Review?

There is no obligation to engage Blaze Business & Legal to implement the actions identified during the review. You may decide that you and your management team can make the changes yourselves.

If you want our help, we can scope the implementation work separately. Depending on the issue, this could involve Business Advisory, Construction Business Improvement, Commercial Management, financial management or relevant Legal Services.

Legal advice and Legal Services are provided under a separate Legal Services engagement.

How Much Does a Construction Business Issue Review Cost?

Construction Business Issue Reviews are provided for a fixed price based on the issue being investigated and the work required to review it properly.

We first speak with you about the problem, identify the issue that will be the subject of the review and determine the likely information and analysis required. We then provide a fixed-price Quotation for the agreed scope before commencing the review.

Frequently Asked Questions

1. Does a Construction Business Issue Review examine my whole business?

A Construction Business Issue Review examines one selected issue in depth rather than conducting a general review of the whole Construction Business. We may need to examine several parts of the business where they are relevant to understanding that issue.

For example, reviewing poor Project margins could require us to examine estimating, Contracts, procurement, Project delivery, Variations and reporting. Those areas are examined because they contribute evidence about the selected issue.

2. What if I do not know which business issue needs to be reviewed?

If you do not know which business issue needs to be reviewed, we start by discussing the problems you are experiencing and identifying the issue that warrants deeper investigation.

You might be experiencing several problems at once, such as cash flow pressure, falling margins and increasing demands on management. We work through those problems with you and determine which issue should be the subject of the detailed review.

3. Can you review a problem with one Construction Project?

A Construction Business Issue Review can examine a problem with one Construction Project where that Project issue is the defined subject of the review or provides important information about a wider business problem.

The information required will depend on what has gone wrong. We may need to examine the estimate, Contract, procurement, Project costs, Variations, reporting or Contract Administration to understand the issue properly.

4. Can a Construction Business Issue Review cover cash flow problems?

A Construction Business Issue Review can examine cash flow problems in a Construction Business by investigating what is creating the pressure rather than looking only at the current bank balance.

Depending on the circumstances, the review could examine cash flow forecasts, Project margins, payment timing, working capital requirements, overheads, Variations and management accounts.

5. Is the Construction Business Issue Review a Legal Service?

The Construction Business Issue Review is a Business Advisory service and is not provided as a Legal Service.

Rachelle’s legal and commercial background allows relevant legal considerations to be identified as part of the Business Advisory work. If the issue requires legal advice or Legal Services, that work is separately scoped and undertaken through a Legal Services engagement.

6. Do I have to engage Blaze Business & Legal after the Issue Review?

You do not have to engage Blaze Business & Legal after the Construction Business Issue Review. The review is a standalone service.

You can implement the agreed actions yourself, allocate them to your management team or other advisers, or ask Rachelle and Shannon to help with implementation. Any further work is discussed and scoped separately.

Get an In-Depth Review of a Construction Business Issue

If there is a problem in your Construction Business that you have not been able to work out, or you want an experienced second opinion before deciding what to do about it, speak directly with Rachelle Hare and Shannon Drew.

We will discuss what is happening, identify the issue that should be examined in depth and provide a fixed-price Quotation for the Construction Business Issue Review.

Call Rachelle and Shannon direct on (07) 3063 3373.