Tag: Construction Accounting
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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
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…
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Construction Accounting – Balance Sheet Construction in Process Accounts
Construction accounting consists of three major groups of accounts. The first and most understood set are the cost of construction accounts found on the profit and loss statement.
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Project Accounting Principles for Residential Contractors
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.
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Contractor’s Profitability
It costs a lot more than you realize to build a home or perform residential repairs. This article looks at both the homeowner’s and contractor’s perspective of what one perceives and the other actually incurs.
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Use Phase Accounting in Construction – Part III (Walls & Flooring)
The primary goal of phase accounting is to break out the construction costs into distinct groups in order to assist management in identifying issues related to cost overruns or profitability.
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Allowances in New Home Construction Contracts – The Business Model
This article is designed to help the contractor address the proper procedures and documentation related to allowances in a new home contract.
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QuickBooks in Construction Accounting – Transfer Work in Process to Cost of Goods Sold
QuickBooks does not have a seamless subroutine to transfer costs from construction in process control account to the profit in loss statement’s cost of construction section. Therefore, the accountant has to export data to a spreadsheet and then sum the respective functional costs of materials, subcontractors, labor, land etc. and then make a general journal…
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Construction Draw Schedule – Ranch Model Home
This is a basic draw schedule explanation for an A-frame ranch model home. This article details the draw schedule format illustrated below. It details the approximate percentages for the respective phases of construction and explains how the draw schedule is laid out and works.
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How to Calculate the Best Markup for a Construction Project
Every construction project has costs beyond the direct costs and the contractor wants to earn a profit. To cover these costs he must have an appropriate markup. The contractor must give consideration to many variables and circumstances to calculate the best markup for a construction project. To determine the best markup percentage on costs, the contractor…