Overbilling in Construction Bookkeeping
Overbilling happens when a contractor overstates the labor and/or material costs and bills their client more than what was originally agreed upon. Although this can occasionally be done inadvertently, some less respectable contractors will do this on purpose in the hopes that their client will fail to notice the inflated costs and fall victim to […]
Work In Progress (WIP): Guide for Construction Industry
Maintaining profits and keeping jobs on track is not easy in the construction industry. There are bills to pay, materials to order, teams to manage, and everything else in between. That’s why you need accurate, real-time Work in Progress (WIP) reports to keep projects running smoothly—and to grow your bottom-line profit. So, how does it […]
Chart of Accounts: Definition & Samples
Importance of a chart of accounts for construction companies Effective financial management is critical in the construction industry, because each project is unique and complex. This is when a chart of accounts comes in handy. Having a well-designed chart of accounts is critical for improving productivity and maintaining accurate financial records, whether you’re a small […]
Underbillings: What is it? How can it hurt your cash flow?
When you start a new project, you have a lot on your plate, from managing prices, timetables, and changing orders to staying on track. All of these are difficult challenges, and how you manage them directly affects your company’s profit and capacity to bid on larger contracts in the future. Underbilling is one of the […]
Cost of Goods Sold (COGS) Explained & Calculation
Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. This amount includes the cost of both labor and materials that were utilized directly to produce the good. Indirect costs like those associated with sales force and distribution are not included. Cost of goods sold is also […]
Mastering the Art of Construction Bookkeeping: A Comprehensive Guide
Welcome to the dynamic world of construction bookkeeping! Unlike traditional accounting, construction accounting is a specialized field designed to navigate the complexities of managing costs and profitability in large-scale, unique projects. Our goal here is to unfold the layers of construction bookkeeping, making it an accessible and manageable aspect of your business. Understanding Construction Bookkeeping: […]
