What's the main difference between job costing and regular accounting?

Job costing tracks all expenses and revenues by individual project rather than looking at your overall business operations. This lets you see which projects make money and which ones lose money, helping you make better bidding and business decisions.

When do I need to use the Percentage-of-Completion Method?

The IRS requires PCM when your average gross receipts over three years exceed $27 million. Smaller contractors can choose between PCM and the Completed Contract Method based on what works better for their business.

What reports are most important for construction companies?

Work-in-Progress (WIP) reports are the most critical because they show your current project status and expected profitability. Job cost reports, cash flow projections, and project-specific profit and loss statements are also essential for good financial management.

How can I improve my construction company's cash flow?

Focus on optimizing your progress billing schedules, actively managing retainage collections, coordinating your expense timing with payment receipts, and maintaining appropriate credit facilities to bridge timing gaps between projects.

What construction accounting software works best for smaller contractors?

QuickBooks Enterprise with construction features works well for basic needs and familiar interfaces. FOUNDATION Software offers more sophisticated construction-specific capabilities. Your choice should depend on your business size, project complexity, and growth plans.

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