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Contractors and construction
Bookkeeping for contractors, built around the job.
Job costing that ties to the ledger, retainage tracked where you can see it, progress billing that matches the schedule of values, and change orders recorded when they happen instead of at year end.
What goes wrong
Construction accounting fails in predictable places.
Job costing exists in the estimating or project software and never reaches the accounting file, so the ledger cannot tell you which job made money.
Retainage is buried inside receivables, which overstates what is collectable and hides how much cash is being held back across active jobs.
Progress billing does not match the schedule of values, so revenue timing drifts from the work actually performed.
Change orders get done in the field, then billed weeks later or never, and the cost lands against the original job margin.
Labor burden gets ignored. Wages hit the job, but payroll taxes, workers compensation, and benefits sit in overhead, which makes every job look better than it is.
Work in progress is not reported at all, so over billing and under billing only show up when a lender or bonding agent asks.
Industry evidence
Thin margins, held back cash, and payments that arrive late.
12% to 16%
gross margin for general contractors, 15% to 25% for specialty trades, with 5% to 8% net for well run companies
63%
of construction firms had a project postponed, scaled back, or canceled in the past six months
10%
retainage required on private Texas projects, with 5% to 10% typical elsewhere
49%
of construction payments were not made on time under the original contract
Levelset and TSheets National Construction Payments Report (2019)
What our team handles
What the engagement covers.
01
Job cost that ties out
Revenue and cost coded to jobs in the ledger, reconciled to the project software, so job margin is a report and not a rebuild.
02
Retainage tracked separately
Retainage receivable and retainage payable carried on their own lines so collectable cash is not overstated.
03
Progress billing and the schedule of values
Billing recorded against the schedule of values, with the billing and revenue relationship documented.
04
Change orders in the books
Approved change orders captured when they are approved, so cost and revenue land in the same job and the same period.
05
Full labor burden allocated
Taxes, workers compensation, and benefits allocated to jobs, so margin reflects the true cost of putting a crew on site.
06
Work in progress reporting
Over and under billing reported monthly, in the format a lender or bonding agent expects.
Averages hide the job that lost money.
A profitable year can contain a job that quietly gave back a quarter of it. Consistent cost coding is the only thing that surfaces it while there is still time to change how you bid.
What you should be able to see
After a few months, this should all be answerable in minutes.
- Margin by job, by job type, and by crew
- Total retainage outstanding and the jobs holding it
- Over and under billed position by job
- Committed cost against remaining budget on active work
- Change orders approved, billed, and unbilled
- Cash outlook that reflects retainage release and payment terms
- A statement package your lender and bonding agent accept without edits
Questions
What owners in this trade ask.
Do you work in construction specific software?
Our team works with the common construction and project platforms and reconciles them to the accounting file. Where an integration does not exist, we build a reliable import path and document it.
Can you produce work in progress schedules for our bonding agent?
Yes. Over and under billing reporting is standard in our construction engagements, and we prepare the package before the deadline.
Do you handle certified payroll?
We reconcile payroll and can coordinate with your payroll provider on prevailing wage reporting. The filing itself stays with the provider or your specialist.
We are cash basis for tax. Does that change anything?
No. Our team maintains the accrual detail you need to manage jobs and gives your tax professional what they need for the return.
Related industries
Nearby work our team knows well.
Next step
See job level margin instead of a year end surprise.
Take the assessment for an immediate score and a short list of priorities, or book a call and talk it through with our team. No contact details needed to see your score.
Free. About 6 minutes. 25 questions. No contact details required.