top of page
  • Writer's pictureJennifer Smith

018 | Construction Accounting Challenges and Solutions

Construction accounting has many moving parts, just like the job site. Monitoring multiple items accurately at one time can be a challenge. When all of these components are recorded, the financial statements will reflect a multitude of indirect costs. This makes it even more critical that construction firms implement cost-accounting methods that enable accurate tracking of their expenses to accurately project profit and loss.

Three key challenges are:

  1. Cost of Goods Sold vs. Overhead Expense

  2. Vendor billings against PO's

  3. Invoicing errors

Three key solutions are:

  1. Assign a G/L code in your accounting software to each vendor that is to be assigned Cost of Goods Sold expense to ensure costs are automatically entered to COGS and not into Overhead Expense by accident

  2. Include a report of all active PO's monthly with your financial statements and review

  3. Utilize a specific construction management app that only allows posting of invoices as a direct match to PO's/contracts

And as always, we are here to help! Reach out for assistance anytime.

#bigrose #bookkeeping #construction #costaccounting

12 views0 comments

Recent Posts

See All
bottom of page