Class Accounting

Class accounting is a form of accounting whereby the revenues and direct costs are grouped into departments.   The term ‘classes’ is merely a substitute for departments in business. It is a very effective form of accounting in construction, engineering and with the service sector. Learning how to use class accounting in construction is easy and works extremely well with phase accounting.

Class Accounting With QuickBooks

Class Accounting

Class accounting is one of the options available with QuickBooks software.   Most accountants and bookkeepers misunderstand its purpose and how to properly implement this wonder tool of accounting.   If you are considering using class accounting and want to have a full comprehensive understanding, this is the article for you. 

Bookkeeping – Project (Job) Costing (Lesson 72)

Job Costing

Another tool used by accountants to evaluate financial performance is project costing.   It is also referred to as contract or job costing.   This lesson uses the term 'job' throughout.   Job costing focuses on a specific long-term project customarily associated with a contract signed with a customer.

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Bookkeeping – Departmental Accounting (Lesson 71)

Departmental Accounting

One of the goals of accounting is to report to management performance results, specifically financial performance.   Since most businesses sell more than one product or render more than one service, management is interested in understanding the performance of the respective products or service.   To successfully report this information, the accountant uses departmental accounting to divide the products or services into categories.

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P&L Statement – Best Format for Salons

P&L Statement - Best Format for Salons

An owner of a hair salon needs a well organized and properly formatted profit and loss statement (income statement) to properly evaluate performance.   There are multiple presentation formats used in the service industry, but after 25 years of accounting I advocate for the functional presentation arrangement.   This form of a profit and loss statement allows the owner to quickly and decisively determine performance throughout the entire operation.

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Construction Accounting Terminology

Construction Accounting Terminology

In construction accounting accountants and bookkeepers use certain terms and there are distinct meanings associated with these terms.  This article is designed to introduce beginner accountants and contractors to these terms from the perspective of financial reporting.

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Branching Out in Construction

Branching Out in Construction

To reduce risk and provide greater security to all parties the small construction company should consider branching out.  What I mean is adding an additional class or line of construction work to the company’s portfolio so that in hard times there are more opportunities for work.

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Progress Billings in Construction

Progress Billings

Just like a tip of an iceberg, a progress billing for a construction project is an invoice for a small part of the overall contract value.  It needs to be recorded correctly and presented to management in a way that is understandable and beneficial for making decisions.  This article will introduce the concept and cover how progress billings are presented on the balance sheet.

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Project Accounting Principles for Residential Contractors

Project Accounting Principles

Almost every residential contractor I had as a client had no clue of their financial position as it related to any one of their residential contracts.  None of them knew whether the project was fully funded, over funded or unfunded at any point in the construction process.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
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