Tag: Cash Management
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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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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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Spring Will Bring More Construction Projects – Your Credit Department Ready?
Combine the warmer weather with an overall construction business climate that seems to be heating up, and you’ve got the perfect recipe for construction business owners to take on more business and grow their companies. But as business picks up, we must caution you: are you financially prepared to grow?