Construction Accounting Services for Contractors Job Costs, WIP and Cash on Every Project
Construction accounting services for general contractors, subcontractors and specialty trades. We track costs by job and phase, prepare work in progress schedules, manage retainage and progress billing and show which jobs actually make money.
- Job costingBy job, phase and cost code
- WIP scheduleOver and under billing
- Retainage trackedReceivable and payable
Big Accountants provides construction accounting services to US general contractors, subcontractors and specialty trades. We set up job costing by phase and cost code, produce a monthly work in progress schedule, track retainage and change orders and keep subcontractor compliance in order.
Construction companies can be busy and still lose money, because profit is decided job by job. Without accurate job costs and a WIP schedule, you only find out a project lost money after it is finished. Our team gives you that picture every month, while there is still time to act.
- Costs by job, phase and cost code
- Estimated versus actual cost
- Over and under billing on every job
- Retainage receivable and payable
- Change orders, approved and pending
What Our Construction Accounting Services Include
Our construction accounting services are built around how contractors bid, bill and get paid.
Job costing
Labor, materials, equipment and subcontract costs by job and cost code.
WIP schedules
Percent complete, earned revenue and over or under billing every month.
Progress billing
Pay applications and schedules of values prepared from job records.
Retainage tracking
Retainage receivable and payable tracked until released.
Change orders
Approved and pending change orders tracked against budgets.
Subcontractor compliance
W-9s, certificates of insurance and lien waivers collected and tracked.
Payroll job costing
Labor costs posted to jobs, with certified payroll support where required.
Bonding and lender reports
Financial statements and WIP reports for sureties and banks.
Construction Accounting Rules We Get Right
Long term contracts follow special tax rules. Many contractors must use the percentage of completion method under 26 U.S.C. 460, while smaller contractors that meet the gross receipts test may use simpler methods for certain contracts. We keep job records that support whichever method your tax preparer applies.
Federally funded work often requires weekly certified payroll under the Davis Bacon and Related Acts, reported on forms such as the Department of Labor WH-347. We prepare the job cost and payroll records behind it.
- Percentage of completionSupported by job cost records
- RetainageTracked on both sides
- Lien waiversCollected with each payment
- Certificates of insuranceExpiry dates monitored
- 1099 reportingSubcontractor payments tracked
Overbilling vs Underbilling Explained
Your WIP schedule compares what you have billed with what you have earned. Both positions matter.
| Position | What it means | What to watch |
|---|---|---|
| Overbilled | Billed more than the work completed so far | A liability; cash looks better than profit |
| Underbilled | Completed more work than you have billed | An asset; cash is tied up in unbilled work |
| On target | Billing matches earned revenue | Healthy cash and accurate profit |
| Fade | Projected profit shrinking as the job progresses | Estimating or cost control problems |
Construction Accounting Problems We Fix
If any of these sound familiar, you may not know which jobs make money.
- Job profit only known after the project ends
- No WIP schedule, or one built once a year
- Retainage missing from receivables
- Change orders done but never billed
- Expired subcontractor insurance certificates
- Bonding company asking for reports you cannot produce
Construction KPIs We Report Every Month
The measures contractors, sureties and banks look at first.
Gross profit by job
What each project earns after direct costs.
Contract revenue - Job costs
Percent complete
How far along each job is, by cost.
Costs to date / Estimated total costs
Over or under billing
Gap between billed and earned revenue.
Billings to date - Earned revenue
Profit fade
Change in projected job margin over time.
Current projected margin - Bid margin
Backlog
Contract value not yet earned.
Total contract value - Earned revenue
Working capital
Cash available to fund jobs.
Current assets - Current liabilities
How We Set Up Construction Accounting
We set up the job cost structure first, then run it every month.
- Weeks 1 to 2
Structure
Jobs, phases and cost codes set up to match how you estimate.
- Weeks 2 to 4
Load
Contract values, budgets, billings and retainage for active jobs.
- Weeks 4 to 6
First WIP
A complete work in progress schedule reviewed with you.
- Every month
Close and report
Job costs posted, WIP updated and job profit reported.
Construction Accounting Pricing
Price depends on the number of active jobs, cost code detail, payroll volume and reporting for sureties or lenders. Every quote is fixed in writing after a free call, and our pricing is competitive. See how our pricing models work.
Fixed monthly fee
Ongoing job cost accounting
Job costing, WIP and reporting for an agreed fee.
Per task
Setup and cleanup
Job cost setup or a WIP rebuild at a set price.
Hourly
Advice on demand
Bid, bonding and cash flow questions.
More Services for Contractors
Accounts payable
Bills coded, approved and paid on time.
Accounts receivable
Invoicing, collections and DSO.
Tax preparation and filing
Business returns prepared and e-filed.
Controller services
Month end close and internal controls.
See all our accounting and bookkeeping services for US businesses.
Construction Accounting FAQs
What are construction accounting services?
Construction accounting services track revenue and costs by job, prepare work in progress schedules, manage progress billing, retainage and change orders, and keep subcontractor compliance records, so contractors know the profit on every project.
What is a WIP schedule?
A work in progress schedule lists each active job with its contract value, estimated costs, costs to date, percent complete, earned revenue and billings. It shows whether each job is over or under billed and what profit it is projected to make.
What is the difference between overbilling and underbilling?
Overbilling means you have billed more than the work completed, which is recorded as a liability. Underbilling means you have done more work than you have billed, which is recorded as an asset and often signals a cash flow problem.
How do you track retainage?
We record retainage withheld by customers as a receivable and retainage you withhold from subcontractors as a payable, then release each one when the conditions in the contract are met.
Do contractors have to use percentage of completion for taxes?
Many long term contracts must use the percentage of completion method, while smaller contractors meeting the gross receipts test may use other methods for certain contracts. Your tax preparer, or our tax team, confirms the right method.
Do you prepare certified payroll?
We prepare the payroll and job cost records that support certified payroll reports on prevailing wage projects. Submission is handled by you or your payroll provider unless added to our scope.
Which software do you use for contractors?
We work in QuickBooks Online, QuickBooks Desktop, Xero and Zoho Books, using jobs, classes and items to build job costing, alongside your estimating and project tools.
How much does construction accounting cost?
Cost depends on active jobs, cost code detail, payroll volume and surety or lender reporting. We offer a competitive fixed monthly fee, hourly billing or per task pricing, quoted in writing after a free call.
Know the Profit on Every Job
Tell us about your jobs, crews and software. We will recommend a job cost setup and send a clear written quote.