Bookkeeping services for Contractors / Home Builders / Construction Companies
At Meritorious Consultants, we specialize in comprehensive bookkeeping services for contractors / home builders construction companies tailored to meet their unique financial management needs. Our expert team understands the complexities of the construction industry and provides accurate, reliable accounting solutions that help you maintain control over your finances, improve profitability, and keep your projects on track.
Understanding Construction Industry Bookkeeping Fundamentals
The construction industry has its own financial rules. To get it, you need to know about cost centers, project accounting, and how revenue is recognized.
The Role of Cost Centers in Construction: Cost centers are crucial in construction. They help track and manage project costs. By breaking down costs into categories like labor and materials, contractors can see where money goes. This helps with budgeting and making decisions on construction projects.
Project-Based Accounting Principles: Project-based accounting looks at each project's finances separately. This way, each project's income and expenses are tracked. It gives insights into each project's success or challenges.
Revenue Recognition Methods: The revenue recognition in construction is tricky. Payments are based on project milestones. Contractors must keep track of work done and adjust for changes. This ensures accurate construction financials.
Knowing these accounting basics helps construction pros. They can make better decisions for their projects' success and profit.
Core Bookkeeping Services of Construction Works
Construction bookkeeping requires specialized accounts designed to capture the unique aspects of construction operations. Here are the key features of our construction accounting services.
Contract-Based Accounting
Each construction project is treated as a separate contract or job to track income and expenses on a per-contract basis to ensure precise profitability analysis, helping you understand the financial performance of each project.
Work-in-Progress (WIP) Accounting
Our bookkeeping accurately reflects partially completed work at the end of each accounting period. This helps match revenues and expenses correctly over time using percentage-of-completion or completed-contract methods, ensuring your financial records are always up to date.
Retention Money Accounting
We manage retention money held back by clients until project completion, recording it separately as a receivable until released. This ensures accurate tracking and reporting of your cash flow.
Progress Billing
Meritorious Consultants properly accounts for progress billing in the financial record to avoid over or under billing.
Cost Classification
We classify costs into direct costs—such as labor, materials, and subcontractor payments—and indirect costs like site management, equipment, and overhead. Accurate cost classification is essential for effective cost control and pricing strategies.
Plant and Equipment Accounting
Our services include separate tracking of construction equipment used across projects, covering depreciation, maintenance, and allocation to jobs, helping you manage your assets efficiently.
Claims Against Modification
We account for claims made or received for contract modifications separately, ensuring your financial data reflects all contract changes.
Mobilization and Demobilization Costs
Costs related to setting up and dismantling site operations are recorded accurately at the start and end of projects, helping you maintain clear financial oversight.
Subcontractor Management
We track payments, advances, and retention for subcontractors distinctly, including withholding taxes or performance guarantees, to keep your subcontractor accounts organized and compliant.
Accounting Software Solutions We Use
To deliver precise and efficient bookkeeping, we utilize the latest accounting software as per need tailored for construction businesses, including QuickBooks Online, Expensify, BILL.com, Peachtree/Sage 50 Accounting, Xero, Buildertrend, Housecall Pro, and Hostaway, etc.
Our expertise in these platforms ensures your accounting system is robust, accurate, and integrates smoothly with your project management tools.
Key Financial Statements
The business relies on key financial statements to monitor performance and ensure compliance. The Income Statement (Profit & Loss) tracks income and expenses, showing net profitability. The Balance Sheet provides a snapshot of assets (property value), liabilities (loans), and owner’s equity. The Cash Flow Statement details inflows and outflows, helping owners manage liquidity. These financial reports are essential for tax filing, loan applications, and making informed investment decisions.
Understanding these statements helps businesses make better choices. It helps spot areas to improve and keeps finances strong. This supports growth and success in the industry.
Financial Compliance of International Accounting Standards
Our bookkeeping includes attention to compliance of International Accounting Standards, helping your business stay compliant with industry standard
Contact Meritorious Consultants Today
We are ready to take control of your finances? Contact Meritorious Consultants for professional bookkeeping and accounting services designed specifically for the industry. Let us help you streamline your financial processes, improve cash flow, and maximize your project profitability.
Meritorious Consultants — your trusted bookkeeping partner