Tag: Construction Accounting
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Percentage of Completion Method for Accounting in Construction
In construction accounting, the percentage of completion method is the preferred tool to account for revenues and direct costs of construction. If you are an owner of a contracting business, this is the best method of accounting.
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Capitalizing a New Home Builder Business
Bankrolling any startup business is difficult enough. Capitalizing a new home builder operation is a leap forward in required funds.
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What is a ‘Spec’ House?
When a builder constructs a house without a contract, it is known as a spec house or a speculation home. There are several advantages to the builder to build a spec house including timing, financial gains and workforce retention.
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Construction Draw Schedule
A construction draw schedule is a financial tool used by contractors in identifying percentage of completion points in the project for the bank to advance proceeds to the contractor. The construction draw schedule is instrumental in keeping the project moving along.
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Use Phase Accounting in Construction – Part II (Trades)
This section covers the three traditional trades that require a license from their respective state. This is your HVAC installer, the electrician and the plumber. In some contractor may wish to include the septic tank and water well installer. However, I prefer these two be included in the site development phase as they do impact…
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Use Phase Accounting in Construction – Part I
The most effective form of a financial feedback loop in residential construction is phase accounting. Phase accounting is a subset of cost accounting and generates accurate information in the world of new home and residential additions for small contractors building up to 20 houses per year.