Contractor accounting is not standard corporate accounting. Revenue is earned job by job over months, cash is held back as retainage, and one missed lien waiver can stop a payment. Here is how the accounting team is built and what each seat handles.
Owns finance strategy, banking, bonding and the relationship with the surety, auditors and lenders. Reads the WIP schedule as a forecast of company health.
Runs the monthly close, the WIP schedule, financial statements and the accounting staff. Makes sure job cost, billing and the general ledger agree.
Works beside project managers on job setup, budgets, cost codes, change orders and monthly pay applications. The link between the field and finance.
Handles journal entries, reconciliations, accruals, fixed assets and equipment costs, and supports the close and audit.
Pays suppliers and subcontractors against purchase orders and subcontracts, matched to job and cost code.
Bills construction progress, T&M and service work. Construction billing follows the schedule of values; service billing runs off work orders and maintenance agreements.
Follows up on past-due pay apps and service invoices, tracks retainage owed and protects lien rights with notices and deadlines.
Pays union and merit-shop crews across many jobs and pay scales.
The work-in-progress report shows each job's contract, cost to date, estimated cost to complete, earned revenue and over/under billing. Sureties and banks read it closely.
Labor, material, equipment and subcontract costs coded to every job and phase so PMs can see fade or gain early.
Monthly progress billing on a schedule of values, usually on AIA G702/G703 forms or a GC's portal.
Commonly 5% to 10% held back from each pay app until completion, which makes cash flow planning critical.
Waivers trade lien rights for payment. Preliminary notices protect those rights. Rules vary by state.
Pending and approved change orders must be tracked so revenue and cost stay accurate.
Bonding capacity depends on clean, timely financials and a reliable WIP.
Maintenance agreements, recurring billing, T&M work orders and parts inventory for the service division.
Common for CFOs and controllers.
Certified Construction Industry Financial Professional, from the Institute of Certified Construction Industry Financial Professionals.
Hands-on use of a construction accounting system with job cost, AP, AR and payroll modules carries a lot of weight.
Experience with certified payroll and fringe reporting is hard to find.
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