In many industries, billing takes place at the time of sale or on a fixed monthly schedule — think of buying office supplies or subscribing to a streaming service. In construction, billing can be much more complex, largely because of the long-term and flexible nature of many projects. Thanks to Pacific Accounting & Business Services, I can breeze through Tax Season with a lot less anxiety and pressure. Knowing Nathan has my back during this crazy period as last minute requests and catch up work piles up makes my life a lot easier. Their team is professional and knows every aspect of accounting and bookkeeping that is required in the scope of services I provide for my small to large account. We are a small commercial general contractor seeking a full-time construction accounts specialist.
These are just a few examples of the complexity related to bookkeeping for construction companies. Flatworld Solutions is a leading provider of accounting for construction companies and has solutions designed to help construction companies and contractors achieve their maximum profit potential. We provide insightful financial support and high-quality accounting and tax services.
Project-Based Compared to Product-Based
However, since construction companies use a number of billing methods, specialized software might be required to track those billings. With the completed contract method, you recognize revenue only after completing a project. Construction companies often use this method for short-term contracts, especially those where contract costs can be hard to estimate.
If you operate across state lines, you may also need to account for additional tax payments. Assuming that no other activities are affected, the manager decides to increase the expected duration of activity C to 10 days. Since activity C is on the critical path, the project duration also increases by 2 days. Applying the critical path scheduling procedure would confirm this construction bookkeeping change and also give a new set of earliest and latest starting times for the various activities. You can unify organizational data, automate workflows, enhance job cost accounting, and draw rich insights from accurate reporting capabilities. With a single database supporting all areas of your operations, decision-makers always have a 360° view across the enterprise.
Purpose Built Accounting Software for Construction Firms
Sales staff will also be remunerated differently, and accounting needs to pay significant attention to the financial health of customers. Unlike companies in other industries, such as retail or manufacturing, construction accounting typically focuses on custom projects, each of which must be managed for profitability. In addition, construction accountants often need to manage revenue recognition and billing for multiyear projects that may undergo many changes over their lifetimes. At PABS, we understand the intricacies of construction accounting and what it takes to deliver high-quality accounting, reporting financials, cash flow projections and more to help develop your growth strategy. We have a team of highly trained accounting professionals capable of leveraging industry-best practices and relevant technology for you to focus on core aspects of your business and achieve growth.
Contrast this with a construction company and the differences become sharp. First, different jobs require different materials, the prices of which can vary wildly depending on what’s needed. After that, unforeseen and one-off fees like equipment repair or worker’s compensation can eat into profitability. Finally, the cost of shoddy bookkeeping itself can create issues if your business is audited.