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.
Project numbering is a tool used by contractors whereby the street address or the lot number is the project’s code number . I suggest using the contract date for the project. It is important to use a dating system that allows for easy access and reporting format. I suggest using the year first, the month and day format. As an example, if the contract was signed on February 16, 2013, then use 130216 as your numbering system. This allows for a chronological ordering system for the future.
Taking a small construction company to the next level of financial success requires implementation of cost accounting. This article is one in a series designed to illustrate how you implement cost accounting in a small construction business. The first step in this process is design a file structure.