Industries
How should construction companies do bookkeeping?
Short answer
Construction firms need job costing, retention tracking, progress billing and subcontractor compliance (such as CIS in the UK or 1099s in the US) so they can see profit per project.
Detailed answer
Track each project's economics
Construction work often spans periods and includes deposits, progress claims, retentions and subcontractor costs. Revenue recognition and work-in-progress treatment depend on the accounting rules and contracts, not just cash receipts. Without job-level coding, an apparently profitable month can hide a loss-making project.
Connect contracts with the ledger
Use project codes for labour, materials and subcontractors and review budgets against actual costs. Maintain retention and receivable schedules and separate client advances where appropriate. Check local contractor reporting and payroll rules with your adviser. Review revenue and completion estimates regularly rather than relying solely on invoices issued.
Country differences: rules, thresholds and terminology differ between the US, UK, Australia and Canada. Check the official source for your country below.
Official sources
Published by Expert Bookkeeping Services · Last updated 2026-11-01. General information only — confirm specifics for your situation with a qualified adviser.
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