Accounting & Bookkeeping for Construction Companies

The construction industry often faces delayed payments from clients or contractors, creating cash flow issues. Managing progress payments, retainage, and balancing accounts payable and receivable is crucial. A business may have completed work but not receive payment for several months, leading to cash shortages that can delay operations.

Simplify your construction accounting software

• It involves tracking hours worked, calculating wages, managing benefits, and ensuring proper tax withholding and reporting.
• The Complete plan builds on the first two plans by centralizing complex processes and allowing businesses to have complete control of projects from beginning to end.
• However, note that the FASB updated this principle to clarify how contractors should report information from their customer contracts.
• We take the time to get to know you and your business to make sure we’re a good fit for each other.
• See if you’re on track with the report designer that allows you to customize construction reports and financial statements.
• This allows them to accurately estimate job cost and compare it to the actual cost, helping them determine profitability.

This approach protects clients but can negatively affect cash flow for contractors. Properly accounting for retainage is essential for accurate financial reporting and effective cash flow management. Rooks Bookkeeping offers specialized services to manage the complex financial needs of construction businesses, delivering accurate and efficient financial management for project success.

• Whether you need help with job costing, payroll, or tax compliance, we provide services that are designed to fit your company’s unique requirements.
• The percentage of completion method offers ongoing insight into project performance and stability, while the completed contract method provides simplicity and potential tax benefits.
• Despite these differences, construction accounting still adheres to general accounting principles and requires accurate record-keeping, financial statements, and tax compliance.
• Most systems require confusing workarounds with third-party integrations just to be able to use them.
• Income recognition is an important part of the construction project cycle and a feature of accrual accounting.

The Importance of Specialized Bookkeeping for Construction Companies

Levelset is an excellent choice for construction businesses that need detailed payment management and want to avoid payment delays or disputes. Managing payroll for employees and subcontractors with varying pay schedules can be daunting. Construction bookkeeping services handle this seamlessly, ensuring accurate payroll processing, compliance with labor laws, and timely issuance of payments, reducing the risk of errors or disputes. Construction projects involve multiple costs, including materials, labor, equipment, and overhead.

MYOB Construction Software Pricing

• We help you manage your cash flow by tracking accounts payable and receivable, ensuring that you have enough funds to cover ongoing expenses and future projects.
• Retainage is a common practice in the construction industry where a percentage of the contract amount is withheld until the project is completed.
• The Advanced plan also has task automation, reducing the amount of time you spend on data entry.
• Expert bookkeepers ensure that all project-related expenses are accounted for correctly and allocated to specific jobs.
• With construction-specific accounting tools like these, you can take control of your cash flow, make better plans, and build more confidently.

Cash flow management is vital in the construction industry, especially as you take on larger projects or multiple jobs. Expert bookkeepers help ensure your business has a steady cash flow by optimizing invoicing and payment schedules. They ensure that progress billing is done accurately, and invoices are sent promptly as work progresses, reducing the chances of delayed payments. Managing subcontractors is a significant part of construction projects and ensuring timely and accurate payments is critical.

Create tag reports

A key aspect of construction bookkeeping is ensuring timely billing for completed work through progress invoicing. By keeping track of project milestones and invoicing promptly, contractors can avoid cash flow disruptions. Consistent cash flow is vital to cover payroll, materials, and other ongoing expenses, enabling smooth operations and reducing the need for costly short-term financing. The tax landscape for construction businesses is complex, involving deductions for equipment depreciation, subcontractor payments, and travel expenses. Professional bookkeepers ensure compliance with tax regulations, minimizing the risk of penalties or audits.

Thinking if PABS is the right fit for your business?

Construction bookkeeping construction bookkeeping services improve cash flow by ensuring timely invoicing, tracking progress billing, and managing expenses. They help avoid payment delays, ensure bills are paid promptly, and prevent cash shortages, ensuring your business has the funds needed to cover ongoing costs, pay workers, and fund new projects. One of the key advantages of expert bookkeeping services is the ability to streamline your financial processes. As your business expands, managing multiple projects, invoices, payroll, and tax filings can become overwhelming.

• All the workflows are developed by project managers and quantity surveyors who want to simplify work life.
• For these reasons, construction companies may need to generate separate profit and loss (P&L) statements for each project.
• For long-term projects, consider using the percentage-of-completion method for revenue recognition.
• This is common in construction contracts to ensure that the contractor completes the work satisfactorily.
• For a complete bookkeeping solution for your construction business, contact us today for a free quote.
• With better cash flow visibility, businesses can plan expenditures, negotiate supplier terms, and ensure smooth project operations without financial disruptions.