Tag: Accounts Receivable Management
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Collection Tips for Construction Industry Managers and Business Owners
Many, if not most, of the construction payment issues and delays that arise can be directly attributed to the circumstances created by the project payment chain. Read on to learn a little bit about why customers don’t pay and to learn some collections tips specific to the construction industry.
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Construction Accounting: What Is a Work in Progress Schedule?
The Work In Progress (WIP) schedule is an accounting schedule that’s a component of a company’s balance sheet. It’s calculated for each accounting period, and required (according to GaaP principles) on projects where the Percentage of Completion (POC) accounting method is used (link to POC article is below). Though the format of the WIP will…
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What Is Underbilling? | Construction Accounting
Underbilling occurs when a contractor does not bill for all the labor and materials delivered in a billing cycle. It can lead to serious cash flow problems.
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Construction Accounting: What is Overbilling?
Overbilling occurs when a contractor bills for contracted labor and materials prior to that work actually being completed. For example, during a billing cycle, a contractor completes 20% of a project but bills their customer for 30%. That extra 10% is the overbilled amount.
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Late Payments in the Construction Industry – Who’s to Blame?
Dr. Schleifer continues his examination of the effect that late payments have on upper-tier parties, presenting a compelling argument: “the root of the problem begins with construction billing procedures” in which payees cede too much control to the payers by agreeing to contracts with “one-sided terms providing designers and owners unreasonable control over the payment…