Financial & Technology Advisory for Growing Companies

Building on a Solid Foundation: How Kyler Advisory Rescued McDermott Construction's Financials

The Challenge

For a construction company, cash flow is the lifeblood of the business. But for McDermott Construction, rapid growth had created a tangled web of financial data. The team was exceptional at building and remodeling, but their bookkeeping had become an afterthought.

• 12 Months of Backlog: Bank feeds were disconnected, and an entire year of transactions sat completely unreconciled.
• No Job Costing: Materials and labor weren't allocated to specific projects, so they had no idea which jobs were profitable.
• Subcontractor Chaos: Payments were disjointed, causing massive 1099 compliance risks and vendor strain.
• Lost Revenue: Without clear tracking, out-of-scope work and material price hikes were never billed back to clients.

The Approach

Kyler Advisory initiated a comprehensive "Clean Up" protocol, treating McDermott's books like a distressed property requiring a full structural overhaul. We prioritized triage—stopping the immediate cash bleed and ensuring tax compliance before year-end. From there, we rebuilt their Chart of Accounts from the ground up to reflect a modern construction business.

Key Interventions

• 45-Day Sprint Reconciliation: Imported, categorized, and reconciled over 10,000 backlogged transactions from the past year.
• Project-Based Accounting: Redesigned Chart of Accounts to support true Work-In-Progress (WIP) and job costing.
• Revenue Leakage Audit: Identified over $150K in change orders and materials that had never been billed to clients.
• Subcontractor Clean-Up: Audited vendor list, collected missing W-9s, and reconciled payouts to eliminate tax liability surprises.

Results & Impact

By bringing the financials current, McDermott Construction avoided major tax penalties. The historical cleanup revealed that three specific types of remodeling jobs were consistently unprofitable due to misestimated labor costs. By recovering $150,000+ in missed billings, the clean-up practically paid for itself immediately. Today, cash flow visibility has improved by 85%, and McDermott can bid on $1M+ projects with complete confidence in their margins.

Key Takeaway

You can't scale a business on a broken foundation. For construction companies, messy books don't just cause tax headaches—they hide profit leaks. A professional financial clean-up is the prerequisite to operational optimization and scaling.