In this episode of Verify Infield, host Jacob Edmond sits down with returning guest John VanErem, Executive VP at Adams Group, to break down the financial fundamentals every millwork company should understand, but many overlook.
This isn’t just another chat about spreadsheets. John brings real-world clarity to the concepts of revenue recognition, cost tracking, and contribution margin, using real data from the AWI Cost of Doing Business Survey. If you’re a project manager, estimator, engineer—or just trying to understand how the money actually flows—this is the episode for you.
About Our Guest
John Van Erem is the Executive Vice President at Adams Group and an AWI instructor, known for his practical approach to millwork finance. With years of experience managing complex projects and leading financial analysis, John is passionate about helping millwork teams—from the shop floor to the C-suite—understand the numbers behind the work.
What You’ll Learn in This Episode
- Revenue vs. Billings – What’s the Difference?
Understand why billing clients doesn’t always reflect earned revenue, and how that disconnect can skew your understanding of financial health. - Three Ways to Track Revenue
- Cost-to-cost (percent complete)
- Point-in-time (product price)
Learn how each method works, and which one best aligns with internal project performance tracking.
- Why Earned Revenue Matters
Every hour of direct labor contributes to earned revenue—but only if you’re tracking it correctly. John and Jacob explain how to relate daily work to financial impact. - How Over/Under Billing Affects Financial Reports
Discover how accounting teams adjust billing based on work completed, and why project managers often feel out of sync with what “the numbers” say. - AWI Cost of Doing Business Survey
Learn how AWI’s anonymized financial data provides a powerful benchmark for your company’s performance, including how to compare against “high-profit” firms. - Direct vs. Indirect Costs – Know the Line
Get clarity on what truly counts as direct cost, what falls under overhead, and how your accounting structure impacts reported margins. - Understanding Contribution Margin
Find out why contribution margin—not net profit—is the number PMs and operations teams should focus on. - How to Set Revenue Targets That Actually Work
John walks through a simple but powerful formula to calculate the revenue your company needs to break even—or hit a target profit goal. - Visualizing the Profit Bucket
A powerful analogy: your overhead is a bucket. Contribution margin fills it. Profit doesn’t exist until the bucket overflows. - The Real Math Behind High-Profit Firms
See how small differences in direct cost and overhead stack up to major increases in net profit—sometimes more than double the industry average.
Where to Learn More
- Get the full PowerPoint presentation here: https://drive.google.com/file/d/1cvF34bmYwQ9qYi8Wq8Mq0Wgram-H-kKt/view?usp=sharing
- Find out more about the AWI Cost of Doing Business Survey: https://awinet.org/codbs/
- Learn more about Adams Group: https://discoveradams.com/
- Follow John on social media
- LinkedIn: https://www.linkedin.com/in/johnvanerem/
Final Thoughts
If the math ain’t mathing at your shop, this episode will help you decode why and what you can do about it. Whether you’re tracking hours, chasing change orders, or trying to justify a raise, understanding revenue and margin is critical to your success and your company’s future.
📌 Listen to Part 2: High-Profit Habits: https://duckworksmw.com/podcasts/if-the-math-aint-mathing-part-2-high-profit-habits/