Tag: Accounts Receivable
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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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What is Percentage of Completion Project Accounting?
The Percentage of Completion (POC) accounting method is often used by construction companies to keep track of their projects. Many construction industry accounting professionals prefer the POC method over the Completed Contract Method because it provides a more realistic view of the company’s true financial status, especially on projects with extended timelines. This is accomplished…
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Why Credit Management in the Construction Industry Is Unique
The construction industry brings unique challenges to contractors and subcontractors when it comes to credit management. Extending credit on large-scale construction projects can be risky, as projects require a large upfront investment of both labor and materials, and because projects can span years with payments made in installments. Of course, extending credit and exposing oneself…
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How and Why to Secure Payment with Lien Rights
We started this course by analyzing standard credit management practices and policies, and then we explored the construction industry-specific legal issues you’ll confront as a credit professional. This all built up to the financial risk paradigm in the industry, which puts your company’s neck on the line. There are real reasons why payments to you…
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How & Why to Convince Your Boss to Adopt New Construction Technology
Office managers in the construction field know the industry isn’t exactly made up of early adopters when it comes to innovative software and construction technology. But this tendency shouldn’t prevent office managers from exploring the value that construction technology can add. Many construction softwares, particularly those that help manage financial processes, empower office managers to do their jobs…