What's different about bookkeeping for construction companies?

Construction bookkeeping requires job costing (tracking every transaction to a specific project), work-in-progress (WIP) reporting that reconciles billings to percent complete, burdened labor rates that load in payroll taxes/workers' comp/benefits, and proper handling of retainage receivable and payable. Standard small-business bookkeeping treats every contractor like a service company and systematically under-reports job profitability.

Why do contractors need WIP reporting?

WIP reporting reveals which jobs are actually profitable mid-project, before closeout surprises hit the P&L. It shows over-billings (cash received ahead of work performed — a liability) and under-billings (work performed ahead of billing — an asset), keeps the company P&L tied to job-level reality, and is increasingly required by sureties, lenders, and CPAs for bonding capacity and year-end reporting.

Case Study• 5 min read

Construction Company Fixes Foundation Before Growth

A $3M construction company was growing but couldn't trust their financials. We rebuilt their chart of accounts, established monthly closes, and created job costing visibility.

By Ally Hormell, Founder & Fractional CFO

Business GrowthFoundation Stage

Illustration for Construction Company Fixes Foundation Before Growth — The Aligned Ledger insights article on Business Growth

A $3M construction company was growing but couldn't trust their financials. We rebuilt their chart of accounts, established monthly closes, and created job costing visibility.

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