Construction owners, contractors, and subcontractors face unique bookkeeping challenges that can hinder profitability. When you have the right financial team tracking, reviewing, and communicating what you need to know about your numbers, you can focus on the construction activity you’re passionate about.
We start by listening to you to understand your goals. Then we’ll build a customized plan together to help you reach them and stay on course.
We work exclusively with the construction industry. We have experience helping companies like yours improve cash flow, reduce workload, apply best practices, and streamline processes.
Proper accounting for Job Costs (or Cost of Goods Sold) allows owners and project managers to properly evaluate actual costs against budgeted costs during and at the conclusion of the job.
Too often, expenses such as General Liability or Worker Compensation insurance are posted to Overhead, when they should be posted as Direct Expenses or Job Costs.
There are many direct benefits to accurate construction job cost bookkeeping, including:
- Cash Flow Analysis during the job. This ensures you won’t run out of money before the job is over.
- Accurate Gross Profit. Gross profit is income less Job Costs. Construction company owners need to know what their gross margin should be in order to cover all overhead expenses.
- Future Estimates. How should future jobs be estimated to cover expenses as well as produce desired gross profit?
Over / Under Billing and Work In Progress / Percent Complete
This is one of the most important concepts in construction cost bookkeeping. Some construction projects are long-term in nature, with invoicing and costs spread out over a lengthy period of time.
Matching income and expenses to the same period of time will produce an accurate Income Statement (Profit & Loss) as well as reduce the risk of “profit fade,” or cash flow shortfalls (the recognition of profit too early, or late, in the job cycle).
In addition to wreaking havoc on your finances, these problems can also be a major red flag for sureties and lenders. Correct construction work in progress accounting opens the door to reliable profit and better future estimates.
Cost to Complete
Estimating the total cost to complete a project is an important tool for construction companies. We can help company owners and project managers estimate the total costs to complete the project.
We have the knowledge, capacity, and team to handle large and small projects. Large projects requiring paperwork such as Conditional and Unconditional Lien Waivers and Releases can be overwhelming.
We can smoothly and efficiently take care of all of the paperwork required for your jobs from start to finish, including:
- Change Orders
- Purchase Orders
- Progress Billings
- Conditional and Unconditional Lien Waivers and Releases
Bookkeeping for construction contracts and subcontracts can get complicated. Because Juanita Bookkeeping Group specializes in project administration, we can efficiently track subcontractor costs during the job (ensuring you do not overpay), insurance certificates (ensuring you are in compliance and covered by your General Liability Insurance, Worker’s Compensation, and other Insurances), and producing / organizing all of the necessary paperwork so you get paid on time by your customer.
Call us today at 972-464-6379 or request a consultation online and we’ll contact you.