Accounting and bookkeeping for construction companies

What construction companies need from accounting and bookkeeping

• Job costing that allocates labour, materials, plant and subcontractor costs to each project
• Tracking of progress claims, certified amounts and retention receivable and payable
• Recording of variation orders and their effect on contract value and margin
• Work-in-progress schedules so profit is recognised in line with project progress
• Payables management for many subcontractors and suppliers with differing payment terms
• Cash flow forecasting around claim certification and payment cycles

Questions to ask a provider

1. How do you recognise revenue on contracts that span more than one financial year?
2. Can you produce a monthly project-by-project margin report?
3. How do you track retention sums and their release dates?
4. Have you worked with construction accounting or project management software we already use?

Pitfalls to avoid

• Booking progress claims as revenue when issued rather than when certified can overstate profit
• Retention sums that are not tracked are easily forgotten and never collected
• Mixing costs across projects hides loss-making jobs until it is too late to act

More on accounting and bookkeeping

Our guide to finding a accounting and bookkeeping provider in Singapore covers typical costs, rules and how matching works.