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Welcome To:

The Contractor Checklist

Money Saving Tips Master Class

The Project Bank Account System

(A Five-Part Homeowner Education Series)

Objective:


To teach both homeowners and contractors how to manage project funds transparently through a dedicated construction bank account — reducing financial risk, protecting deposits, and ensuring all costs are documented and traceable.

Tip of the Day: Start a Dedicated Project Bank Account

Summary:


One of the smartest ways to protect both the homeowner and the contractor is to open a joint project bank account specifically for your build or renovation.


Instead of large deposits disappearing into general business accounts, funds are safely stored, monitored, and distributed only as work is completed.

How It Works:

  • The homeowner and contractor agree to open a separate account solely for the project.

  • The homeowner funds the account in phases — not one large lump sum.

  • The contractor bills monthly from the account for labor, fees, and approved material costs.

  • The homeowner has view-only access, ensuring transparency at all times.

  • Subcontractors and suppliers are paid directly from this account, simplifying record keeping.

Why It Saves Money

  • Prevents overpayment or misuse of funds before work is completed.

  • Reduces disputes by documenting every dollar spent.

  • Helps control cash flow and budget pacing for both parties.

  • Builds trust — the owner sees clear progress tied to each withdrawal.

Action Items:

✅ Discuss the idea with your contractor before signing the main construction contract.

✅ Open a new account titled “Project Construction Account — [Your Project Name].”

✅ Agree on who will have viewing access and how billing will occur (e.g., monthly or by milestone).

Setting Up the Account Properly

  • Choose a bank with strong digital access and no monthly fees.

  • Both parties should have secure logins — the homeowner for viewing, the contractor for managing payments.

  • Label all transactions clearly (Labor, Materials, Subcontractors, Fees).

  • Keep this account separate from personal or business finances to simplify taxes and audits.

Action Items:

✅ Create three categories in your online banking system: Labor, Materials, Subcontractors.

✅ Use a shared Google Sheet or budgeting tool linked to this account for transparency.

Contractor Billing from the Account

  • The contractor submits a monthly invoice detailing hours, materials purchased, and subcontractor payouts.

  • Once approved, funds are drawn from the project account to cover that month’s verified expenses.

  • This structure encourages accuracy in billing and discourages inflated markups.

Action Items:

✅ Require a monthly Statement of Account summarizing all withdrawals.

✅ Review each statement alongside your construction progress reports before replenishing funds.


Subcontractors & Materials Management

  • Paying subs and suppliers directly through the project account ensures no one is left unpaid.

  • This reduces lien risks and promotes smoother scheduling.

  • Receipts and invoices stay centralized for accountability and tax deductions.

Action Items:

✅ Ask all subcontractors to submit invoices referencing the project account.

✅ Keep digital copies of all supplier receipts in your Project Documentation Folder.

Owner Oversight & Long-Term Benefits

  • Owners gain confidence knowing where funds are going — reducing anxiety about large upfront payments.

  • Contractors benefit by maintaining organized, professional financial systems that improve credibility and referrals.

  • The account can remain open for warranty or maintenance funds after completion.

Action Items:

  • ✅ At project closeout, reconcile the account with your contractor — any unused funds can remain for future repairs or upgrades.

  • ✅ Add your final “Project Bank Account Summary” to your Digital Home Manual for records and tax reporting.

Thank you for completing this Session!

Due Diligence is the difference between designing with confidence and building on guesswork.

What is in the Master Class?

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