In the complex world of construction projects, managing finances efficiently is crucial for the success and timely completion of any endeavor. One significant aspect of financial management in construction is billing, and AIA Contract Documents has developed a standardized billing process known as AIA billing. This article delves into what AIA billing is, its key components, and why it’s essential for the construction industry. What is AIA Billing? AIA billing,… Read More
Accounting Workflow For Contractors
Construction businesses have lots of moving parts- creating bids, estimating, invoicing change orders, purchase orders, payroll, managing field work, managing employees, managing customers, back office, paperwork, insurance, bonding and the list is endless. But all being said finances and what you are left with in your bank account after taking so much risk and doing so much of hard-work matters the most. Construction businesses unlike other businesses do not have… Read More
Knowify VS Buildertrend- Project Management Software For Construction Business Owners
Choosing between Knowify and Buildertrend depends on whether you are managing in-house labor teams or subcontracting most of your work. Here’s a comparison to help you decide which tool best suits your needs: Knowify:Best for Managing In-House Teams Strengths: Buildertrend:Best for Managing Subcontractors Strengths: Knowify vs Buildertrend from Project Work Flow perspective can be downloaded here Need help with bookkeeping using knowify or buildertrend schedule a call
Accrual VS Cash Basis Accounting For Contractors
Understanding your financial health is a critical component to any construction business. In construction accounting, there are two primary methods of tracking income and expenses: Accrual method and cash basis method. In this article, we’ll look at the pros and cons of these two accounting methods, and when to use each one. The cash basis method of accounting is simple and straightforward, meaning that you will track cash out and… Read More
Revenue Recognition In Construction Contracts
Construction accounting is truly distinctive, requiring a detailed comprehension of diverse specialized accounting principles and methods. Below is an overview of the four most prevalent methods in construction accounting: 1. Revenue Recognition In Construction Contracts Using Cash Basis Accounting Overview: Cash basis accounting records transactions when money is exchanged. Revenue and expenses are recognized only when cash is received or paid. Example: A contractor buys materials for $1,000 and completes… Read More
Construction Work In Progress (WIP)
Construction work in progress (WIP), is a necessary accounting process that details the status of a partially completed job and its associated costs. Working in tandem with the percentage of completion method for revenue recognition, WIP reports play a vital role in keeping jobs on budget and invoiced correctly. For this reason, they’re essential for predicting financial outcomes. This can enable a proactive, rather than reactive, outlook concerning construction project management. This precise… Read More