Construction Accounting Services: What Every Contractor Needs to Know

Most General Accountants Get Construction Wrong — And It Costs Contractors Dearly

I've reviewed the books for a significant number of contractors over the years. One of the most common things I see is a perfectly competent general accountant who simply doesn't understand construction. They're not bad at their job. Construction is just a different animal. Long-term contracts, project-based revenue, retainage, AIA billing, WIP schedules — none of that exists in a typical small business accounting setup. And when it's handled wrong, the financial statements are misleading at best and dangerous at worst.

A situation I encounter more than once a year: a commercial contractor switches to us after their previous accountant had been booking all retainage as earned revenue the moment it was billed. The income statement looked fantastic. But when a bonding agent reviewed the WIP schedule, the numbers didn't hold up. The result is a multi-month restatement process — and a shaken relationship with the surety. That's the kind of damage a well-meaning but underqualified accountant can cause in construction specifically.

What Real Construction Accounting Covers

Job Costing Done Right

Job costing is tracking every dollar — labor, materials, subcontractors, equipment, allocated overhead — against each individual project in real time. Not at the end of the job. In real time, while you can still act on it. Most of the contractors I work with were only getting a job cost summary after the job was closed. By then, it's just a post-mortem.

WIP Schedule Preparation

The WIP schedule is the single most important financial report in construction. It shows earned revenue versus billed revenue on every active job, calculating overbillings and underbillings accurately. Your surety requires it. Your bank wants it for your line of credit. If you can't produce one on demand, you're not financially credible in this industry. Period.

AIA G702/G703 Billing

Commercial owners and GCs expect AIA-formatted payment applications. A properly prepared G702/G703 with an accurate schedule of values, correct percentage completion figures, and clean retainage tracking gets you paid faster and with fewer disputes. Sloppy billing is one of the easiest ways to create payment conflicts on a job.

Retainage Tracking

Untracked retainage is one of the biggest cash flow leaks I see in construction. I've worked with contractors who had $400,000 or more in collectible retainage sitting on old closed jobs that nobody had followed up on. That's not a small number. Retainage needs to be tracked by project, by contract, and by due date.

Lien Waiver Management

Missing or incorrect lien waivers are a top reason payments get delayed. Conditional and unconditional lien waivers need to be prepared, tracked, and exchanged properly for every payment application. It's administrative, but it protects you legally and keeps cash moving.

GAAP Revenue Recognition

Percentage of Completion versus Completed Contract — getting this right matters enormously for your financial statements. Lenders, bonding agents, and potential buyers evaluate your business based on GAAP-compliant financials. Using the wrong method doesn't just skew your numbers; it can violate loan covenants or trigger bonding issues.

The Software We Use

In my experience, most residential and commercial contractors are running QuickBooks Online, QuickBooks Enterprise, Buildertrend, JobTread, or Procore. We work fluently in all of them. We'll meet you where you are — no forced migrations, no unnecessary switching costs.