Construction-Specific Accounting & Bookkeeping Tasks...

For all new construction prospects and clients, we first conduct a thorough vetting and discovery call that typically lasts ~45-minute (to 1+ hour), which is lead by our Head of Sales or our CEO & Founder. This introductory discovery call helps us learn and understand all of the internal processes and systems. 

Once a new construction business officially comes on board, we start them in onboarding for 30-90 days (where we may do any/all of our clean up or restructuring accounting work first, as well as build out our own workpapers internally). 

Some common accounting & bookkeeping tasks that are specific to the nature of our construction business clientele may include, but are not limited to, the following:

1. Tracking Project Costs: Construction projects involve various costs, from materials to labor to equipment rentals and permits, etc. Accurate and up-to-date accounting for this industry involves keeping a very close eye on these costs, recording expenses, and allocating them to the right projects in a timely fashion. These tasks can prove quite cumbersome and timely for both the client’s team and the accounting team. We’ve employed various change management tactics on the client's end to help with the expense documentation process in real time so that their on-the-ground teams can easily and quickly track receipts and expenses for the various projects they’re working on. For construction clients that use Quickbooks Online or Xero, we like to use UNCAT to help track any uncategorized/unknown transactions at the end of each week or month. This little third-party app/plug-in has helped expedite the workflow with our construction clients, and it’s an example of how we utilize the newest tips & technology tricks to work SMARTER for our clientele, regardless of industry or niche. 

2. Managing Progress (WIIP) Billing: In construction, projects are often billed based on progress made. Also, work in progress (WIP) is an essential part of construction accounting, as it calculates the progress of all ongoing work, allowing you to see what’s been done and what’s left to do, to manage budgets properly. 

3. Handling Retention Payments: Sometimes contracts include retention payments, which are a percentage of the total project cost withheld until the project is finished. Our team of accountants needs to keep track of these amounts to make sure they’re released appropriately once the project meets the criteria. 

4. Job Costing: This is a crucial part of construction accounting, as it requires allocating costs to specific construction projects, determining the profitability of each project, and assessing its financial performance. We’re tasked to create dimensionality around all expenses (labor, materials, overhead, etc.) to determine the true cost and profitability of the jobs, and we can even deliver “by-project profit & loss statements” to help see this more clearly.

These are just a few examples of construction-specific accounting tasks that we do for our construction clientele. As evidenced by this list, construction bookkeeping, accounting, finance, and reporting requires much attention to detail and an understanding of the operational workflows, systems & AP/AR processes that are unique to this industry. 

When construction prospects initially reach out to SMART as a potential partner, we make sure to thoroughly vet the business and tailor our services & deliverables around their unique needs. This oftentimes includes one or two discovery calls, guest access to their accounting system, and a custom proposal/scope of work built around their specific goals, needs, and wants. We love construction projects and partners, and we know they’re quite happy working with us in return.