#construction
Accounting practices for construction businesses including job costing, WIP schedules, and retainage
New York's Prompt Payment Act amendment voids private construction contract clauses that retain more than 5%, requires retainage release within 30 days of final approval, and adds 1% monthly interest on late amounts — here is how contractors should fix their contracts, book retainage as a contract asset under ASC 606, and run a 30-day closeout.
Land surveying firms typically run overhead rates of 100-150% of direct labor and need a break-even multiplier of 2.75-3.25x to stay profitable, but most price off gut feel and burdened-labor guesses instead of job-level cost tracking.
A work-in-progress (WIP) schedule ties revenue to actual completion using the cost-to-cost percentage-of-completion method, exposing overbilling and underbilling before hidden losses reach year-end financials. Includes worked examples, a four-project sample schedule, and the signals bonding companies underwrite.
California's SB 61 caps private-project retention at 5% for contracts signed on or after January 1, 2026, and New York's S5655 voids any retainage clause above 5% on covered private contracts of $150,000+ as of December 19, 2025. Here's what changed, the carve-outs, and how contractors should track retainage receivable in their books.
A monthly work-in-progress (WIP) schedule turns four numbers per job — contract price, estimated cost, costs to date, and billings to date — into an early warning for overbilling and underbilling, the cash-flow gaps that sink profitable builders. Spec builders also differ from contract builders on revenue recognition, since homes held as inventory typically use the completed contract method under the IRC Section 460 home construction exemption.
How environmental remediation contractors should structure job costing when a state UST cleanup fund — not the property owner — is the real payer. Covers the five remediation phases as cost codes, ASC 606 collectibility with fund caps and deductibles, tracking 6-to-8-week reimbursement aging separately from ordinary AR, and the documentation that survives a fund audit.
Retainage withholds 5-10% of every construction progress payment until project completion, and contractors who book it into regular AR/AP instead of separate Retainage Receivable and Retainage Payable accounts lose visibility into which "earned" revenue is actually collectible now versus locked up for months.
Percentage-of-completion accounting recognizes contractor revenue in proportion to costs incurred using the cost-to-cost method, and a monthly WIP schedule tracks the resulting overbilling and underbilling under ASC 606.
A working contractor's guide to Davis-Bacon compliance in 2026, covering the redesigned WH-347 certified payroll form, fringe benefit annualization, apprenticeship ratios measured daily, the 2023 final rule and 2024 truck-driver injunction, and how the Inflation Reduction Act's five-times tax credit multiplier ties prevailing wage compliance to clean-energy projects.
OSHA's proposed federal heat rule sets 80°F and 90°F triggers requiring water, shade, paid breaks, acclimatization, and a written HIIPP. Five state plans — California (Cal/OSHA 3395 and 3396), Washington, Oregon, Nevada, and Maryland — already enforce binding heat illness standards. Here's the compliance playbook construction, restaurant, warehouse, and delivery employers can build today under the General Duty Clause.
How residential roofers and storm restoration contractors should handle ASC 606 variable consideration, Section 460 elections, supplemental claim revenue, customer deductibles under state law, OSHA fall protection costs, and the KPIs (squares per crew-day, gross margin by channel) that separate profitable shops from busy ones.
How independent residential GCs and custom home builders should structure their books — Section 460 method election, phase-level job cost categories, deposit and retainage handling, mechanics lien waiver discipline, warranty reserves, and the NAHB KPIs that matter.
