In short

Accounting for contractors focuses on project-level profit and cash: comparing job costs with estimates, preparing work-in-progress schedules that show over- and under-billing, reviewing equipment ownership against rental, forecasting cash across overlapping projects with uneven billing cycles, and assembling financial statements that bonding companies, lenders and tax preparers ask for. We also review overhead allocation so bids recover indirect costs such as insurance, vehicles and office staff.

For a growing contractor, the question is rarely "did we make money this year?" and much more often "which jobs are making money, and do we have the cash to start the next one?" Accounting for construction answers those questions using job-level data from the books.

Work-in-progress schedule

A work-in-progress (WIP) schedule compares, for each open job, the contract value, estimated total cost, cost to date, percentage complete and amount billed. From that you can see where you have billed ahead of the work (over-billing) or fallen behind (under-billing). We prepare a WIP schedule monthly or quarterly, and review it with you job by job.

Estimates against actuals

Closed jobs are the best data you have for future bids. We compare final cost by cost code with the original estimate and summarise where estimates are consistently light, whether in labour hours, materials or subcontract costs.

Equipment decisions

Owning equipment brings depreciation, financing, insurance and repair costs; renting brings a predictable charge per job. We put both options side by side using your actual utilisation. The IRS explains how business assets are depreciated in Publication 946, and your tax preparer can advise on the tax side of the choice.

Cash across overlapping projects

Contractors often pay for labour and materials weeks before a progress payment arrives, and retainage may not be released for months. We build a cash forecast that lines up billing schedules, retainage release, payroll and supplier terms for all active jobs.

Statements for lenders and sureties

Banks and bonding companies usually want financial statements prepared on a consistent basis, sometimes with a WIP schedule attached. We prepare those packages from the closed books.

Typical deliverables

  • Monthly or quarterly WIP schedule
  • Job profitability against estimate
  • Equipment own-versus-rent analysis
  • Rolling cash forecast across projects
  • Year-end statements for lenders and your preparer

This depends on accurate construction bookkeeping. See all accounting services or book a consultation.