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Construction Finance Knowledge Hub
Deep-dive guides on the financial concepts every contractor needs to understand—written in plain language, not accounting jargon.
Latest Articles
Surety Bond vs. General Liability Insurance in Construction
Surety bonds guarantee a contractor's contractual obligations and protect project owners, often required for public works under acts like the Miller Act. Commercial general liability insurance safeguards the contractor against third-party claims for bodily injury or property damage, mandated by state licensing boards for operational compliance. Both are critical yet distinct financial instruments for compliance and risk management in construction.
Optimizing WIP Reporting: Who Offers Expert Consulting?
A Work-in-Progress (WIP) report is the heartbeat of construction accounting. Learn where to find expert consulting to optimize your reporting and ensure compliance with ASC 606.
Training Project Managers for Accurate WIP Reporting
Inconsistent data from the field can ruin your financial statements. Learn how to train your PMs to bridge the gap between operations and accounting through accurate WIP reporting.
Ideal WIP Report Frequency for Construction CFOs
Discover why the monthly WIP cycle is the industry standard for compliance, and how bi-weekly 'flash' reviews can prevent profit fade in high-volume construction projects.
Accounting Software for WIP and Over/Under Billing
A deep dive into how construction accounting software handles Work-in-Progress (WIP) reports and over/under billing reconciliation to ensure compliance and cash flow visibility.
QuickBooks Desktop vs. Sage 300 CRE: Construction Guide
Choosing between QuickBooks Desktop and Sage 300 CRE is a pivotal decision for growing contractors. This guide breaks down the compliance, job costing, and reporting capabilities of both systems.
Top Financial KPIs for Construction Companies: 2024 Guide
This guide explores the most crucial financial KPIs for construction companies, covering liquidity, profitability, and cash flow management, with actionable insights and compliance considerations for 2024.
How to Create an Accurate Commercial Construction Budget
An accurate commercial construction budget is a detailed financial blueprint that encompasses all project expenses, from direct materials and labor to indirect overhead and critical contingencies. Mastering its creation is essential for financial viability, risk mitigation, and compliance with intricate tax and accounting standards.
Underbilled WIP: Risks, Causes, and Solutions for Contractors
Consistent underbilling in construction isn't just a paperwork error—it's a hidden cash flow drain. Learn how to identify the root causes and fix your WIP schedule.
Subcontractor WIP Report Template: A Financial Guide
A robust Subcontractor Work-in-Progress (WIP) report is essential for financial accuracy, compliance, and sustained profitability. This guide provides a detailed template, explains regulatory requirements, and offers practical insights for implementation.
How WIP Reporting Impacts Construction Bonding Capacity
Unlock larger construction projects by understanding how Work-in-Progress (WIP) reporting critically impacts your bonding capacity, influencing your ability to secure essential project financing and grow your business.
Optimizing QuickBooks Customer and Job Setup for Construction
Mastering QuickBooks customer and job setup is crucial for construction companies to ensure accurate job costing, maintain compliance with federal and state regulations, and optimize financial reporting for profitability and growth. This guide outlines the optimal hierarchy and best practices to transform your bookkeeping.
What is a WIP Schedule in Construction?
A Work-in-Progress (WIP) schedule is the heartbeat of construction accounting. Learn how to calculate percentage of completion and use WIP reports to ensure project profitability.
Essential Construction Financial Statements Guide
A deep dive into the four essential financial statements every contractor needs to track profitability, manage cash flow, and secure bonding. Learn how to interpret WIP reports, P&L statements, and Balance Sheets specifically for the construction industry.
Employee vs. Contractor: Construction Worker Classification
Misclassifying construction workers can lead to devastating back taxes and penalties. This guide explores the IRS and DOL tests for classification and how to protect your firm’s financial health.
QuickBooks for Contractors Setup: A Comprehensive Guide
Setting up QuickBooks for construction requires more than standard settings. This guide covers the specialized configuration needed for job costing, WIP tracking, and construction-specific reporting to ensure financial accuracy.
ASC 605 vs. ASC 606: Key Differences for Contractors
Transitioning from ASC 605 to ASC 606 fundamentally changed how construction firms recognize revenue. This guide breaks down the five-step model and what it means for your bonding capacity and WIP reporting.
Construction Lien Waiver Requirements: A Complete Guide
Navigating lien waiver requirements is critical for managing project risk and ensuring timely payments. This guide breaks down the essential compliance steps, document types, and financial controls every contractor needs.
Construction Company Bookkeeping Checklist: A Pro Guide
Efficiency in construction starts with organized books. This comprehensive checklist provides daily, weekly, monthly, and annual tasks to ensure job cost accuracy and healthy cash flow.
Essential Construction Company Tax Deductions Guide
Discover the most impactful tax deductions for construction companies and contractors. This guide covers everything from heavy equipment depreciation to specialized job costing strategies that reduce your tax burden.
Over/Under Billing in Construction: A Guide to WIP
Over and under billing can make or break a contractor's cash flow. This guide explains how to master Work-in-Progress (WIP) reporting to maintain accurate financials and bonding capacity.
Getting a Performance Bond for Public Works
Securing a performance bond is a critical gateway for contractors entering the public works sector. This guide outlines the financial requirements, underwriting process, and how professional bookkeeping ensures approval.
ASC 606: Revenue for Multiple Performance Obligations
Navigating ASC 606 revenue recognition is critical for complex construction contracts. This guide explains how to identify and account for multiple performance obligations to ensure financial compliance and accurate WIP reporting.
ASC 606 for Construction: Expert Implementation Guide
Transitioning to ASC 606 requires a deep understanding of performance obligations and variable consideration in construction contracts. Learn how Scaffold Bookkeeping helps contractors ensure compliance and financial accuracy.
Washington State B&O Tax Guide for Contractors
Navigating the Washington State Business and Occupation (B&O) tax is critical for construction profitability. This guide breaks down tax rates, classifications, and deductions specifically for WA contractors.
Financial Analytics for Construction CFOs
Modern construction CFOs are moving beyond static reports to dynamic financial analytics. Discover how data-driven insights into WIP, labor productivity, and cash flow can transform project margins.
Red Flags: Catching Fraud & Errors in HVAC/Plumbing Books
Mechanical contractors face unique financial risks from field service fraud to inventory leakage. Learn the specific red flags that indicate errors or embezzlement in your HVAC or plumbing business.
Sage 300 CRE vs. Procore: Comparing Project Accounting
A deep-dive comparison between Sage 300 CRE and Procore's project accounting capabilities. Discover which platform offers the best job costing, WIP reporting, and integration features for scaling contractors.
ASC 606 Revenue Recognition for Construction Contracts
ASC 606 revolutionized how contractors recognize revenue. This guide explains the five-step framework and how it affects your financial reporting and bonding capacity.
HVAC and Plumbing Combined Overhead Guide: 10-15 Techs
Scaling an HVAC and plumbing business to 10-15 technicians requires a shift in financial management. This guide explores industry overhead benchmarks and how to optimize your indirect costs for maximum profitability.
Applying Lien Waivers to AIA Billing: A Finance Guide
Syncing lien waivers with G702/G703 billing cycles is critical for construction payment security. This guide outlines the exact workflow for General Contractors and Subcontractors.
Cash vs. Accrual: Best Accounting for HVAC & MEP Companies
Choosing between cash and accrual accounting is a pivotal decision for combined MEP (Mechanical, Electrical, and Plumbing) firms. This guide breaks down the tax implications, WIP reporting, and which method drives better financial control.
Construction Industry GAAP Requirements: A Guide
Understanding GAAP in construction is critical for bonding, lending, and long-term scaling. This guide covers revenue recognition, WIP schedules, and job costing compliance for contractors.
Best Accounting Software for ASC 606 Construction Compliance
Navigating ASC 606 revenue recognition is a major challenge for contractors. This guide identifies the top accounting software solutions and explains how Scaffold Bookkeeping bridges the gap between software and compliance.
Profitability Metrics for Electrical Subcontractors
When an electrical division struggles with profitability, the root cause is often buried in the data. This guide breaks down the critical financial metrics—from labor burden to WIP reports—that electrical contractors must monitor to turn their margins around.
Resolving AIA Pay Application Disputes: A Guide
AIA payment application disputes can halt project momentum and strain cash flow. This guide explores common causes for rejection and provides actionable steps for contractors to resolve disputes efficiently.
Surety Bonding Financial Requirements: A Contractor Guide
Securing a bond requires more than just a good reputation; it requires a balance sheet that speaks the language of a surety underwriter. Discover the specific financial benchmarks and reporting standards needed to increase your bonding capacity.
Configuring QuickBooks for Multi-Project Construction Management
Effectively manage multiple construction projects in QuickBooks by correctly configuring the "Projects" feature, customizing your Chart of Accounts, and enabling robust expense tracking for superior job costing and profitability.
QuickBooks Setup for Construction Progress Payments
Unlock profitability and compliance for your construction business. This guide helps subcontractors master QuickBooks for accurate progress payments, retainage, and job costing, ensuring precise financial management.
Using AI for WIP Reporting and Cash Flow Management
Artificial Intelligence is transforming construction finance by offering predictive insights for Work-in-Progress (WIP) reporting and cash flow management. It empowers contractors to proactively identify financial discrepancies, ensure compliance, and optimize profitability with real-time data analysis.
QuickBooks Desktop Setup for Remodelers: A Compliance Guide
Optimize your QuickBooks Desktop for detailed job costing and compliance. This guide provides remodeling contractors with the essential steps for configuring their system to ensure accurate financial reporting and adherence to IRS regulations and GAAP, leading to improved project profitability.
QuickBooks Chart of Accounts Structure for Construction
A specialized QuickBooks Chart of Accounts (COA) is essential for construction firms to achieve financial precision. It enables accurate job costing, compliance with GAAP like ASC 606, and optimized project profitability through strategic categorization of income, COGS, and overhead.
Setting Up QuickBooks Online for General Contractors
Unlock the full potential of QuickBooks Online for your general contracting business with this in-depth guide. Learn how to configure your QBO to optimize job costing, streamline financial reporting, and maintain compliance with critical construction industry regulations.
Improving Job Costing Accuracy: Training Options for Teams
Accurate job costing is crucial for construction profitability and compliance. This article explores essential training options, from professional certifications to practical workshops, designed to enhance financial management for construction teams and foster a culture of cost-conscious decision-making.
Managing Over/Under Billing in Commercial Construction
Understanding and meticulously managing over/under billing is crucial for commercial contractors. It directly impacts financial health, cash flow, and surety bonding capacity, requiring diligent reconciliation and strategic adjustments.
How to Justify Price Increases with Job Costing Data
Successfully justifying construction price increases requires precise, data-driven evidence that market volatility has genuinely impacted project solvency, not just profit margins. This guide provides contractors with the strategies and tools to leverage job costing data, regulatory understanding, and transparent communication to navigate price adjustments confidently.
Best WIP Accounting Software for Construction Businesses
Choosing the right WIP accounting software is critical for construction businesses to ensure GAAP and IRS compliance, optimize job costing, and maintain strong bonding capacity. This guide explores integrated solutions like Sage and Foundation, alongside QuickBooks integrations, to help contractors select the best system for accurate financial reporting and sustainable growth.
Weekly Job Cost Review Agenda Template for Project Managers
A weekly job cost review is a critical meeting for construction project managers to evaluate actual costs against budget, ensuring profitability, compliance, and accurate financial reporting. This guide provides a comprehensive template.
Top Job Costing Mistakes for Contractors & How to Avoid Them
Job costing mistakes in construction can significantly erode profit margins and lead to poor financial decisions. This article details common pitfalls, from inadequate indirect cost tracking to improper labor burden allocation, and provides actionable strategies for contractors to achieve accurate project profitability and sustainable growth.
Predicting Construction Cost Overruns with AI & Job Costing
Artificial Intelligence, meticulously integrated with robust job costing, offers construction contractors an unprecedented ability to predict, identify, and mitigate potential cost overruns, transitioning from reactive problem-solving to proactive financial management and regulatory compliance to secure project profitability and business sustainability.
When to Switch from Manual Job Costing to Construction Software
As construction firms grow, manual job costing quickly becomes inefficient and risky. Learn the decisive indicators, from exceeding $1 million in revenue to navigating complex prevailing wage regulations, that signal a necessary transition to dedicated construction accounting software for improved accuracy and compliance.
Finding a Midwest Job Costing Consultant for Construction
For Midwest construction firms, a specialized job costing consultant is essential for navigating complex regulations like ASC 606 and IRS Section 460, optimizing project profitability, and improving cash flow. This expertise ensures compliance, drives strategic decision-making, and fosters sustainable growth in a competitive market.
Job Costing vs. Project Accounting: Construction ROI Guide
Job costing and project accounting are distinct yet interdependent financial disciplines critical for construction contractors. Job costing focuses on individual project profitability, while project accounting provides a strategic, company-wide financial framework for compliance, cash flow, and sustainable growth.
Mastering the WIP Schedule for General Contractors
Unlock the power of the Work-in-Progress (WIP) schedule for your construction business. This guide explains its critical role in financial accuracy, tax compliance, and strategic decision-making for general contractors.
Job Costing for Siding Contractors: A Financial Guide
Job costing is critical for siding contractors to understand true project profitability, optimize bidding, and control costs effectively. This guide covers essential cost categories, implementation steps, and the technological tools that drive financial precision and sustainable growth for your siding business.
Job Costing for the Window Industry: A Compliance Guide
Job costing for the window industry is a specialized accounting method that tracks direct material, labor, and overhead costs against specific installation contracts to determine real-time profitability and ensure compliance with critical IRS and GAAP revenue recognition standards.
Job Costing for the Flooring Industry: A Financial Guide
Job costing is critical for flooring contractors to understand true project profitability and ensure compliance. This guide details how to accurately track all direct and indirect costs, manage subcontractors, and allocate overhead for optimal financial health and competitive bidding.
Job Costing for the Foundation Industry: A Guide
Job costing is vital for foundation contractors to meticulously track project expenses, from concrete to labor. This guide outlines how to implement effective job costing to ensure profitability and compliance with industry standards and IRS regulations.
Job Costing for the Foundation Industry: A Financial Guide
Job costing for foundation contractors is the meticulous tracking of all project-specific expenditures against the budget to accurately determine profitability, ensure financial compliance, and empower informed decision-making. It provides the financial bedrock for every successful foundation project.
Mastering Job Costing for the Concrete Industry
Unlock greater profitability and ensure regulatory compliance in your concrete business with advanced job costing. This guide covers how to track critical expenses, manage labor burden, and adhere to accounting standards for maximum financial clarity.
Job Costing for Electrical Contractors: A Financial Guide
Job costing is critical for electrical contractors to achieve sustainable profitability, navigate volatile material costs, and ensure compliance. This guide provides a detailed roadmap for managing direct and indirect costs, labor burden, material tracking, and overhead allocation specific to the electrical industry.
Job Costing for Carpentry: A Guide for Frame and Finish Pros
Unlock profitability and compliance in your carpentry business with expert job costing. This guide provides framing and finish contractors with strategies for tracking every dollar, refining bids, and achieving financial stability through accurate data and regulatory adherence.
Job Costing for the Roofing Industry: A Financial Guide
Job costing for roofing contractors is a meticulous accounting method that tracks all project-specific expenses to determine real-time profitability and inform critical business decisions. Understanding and implementing a robust job costing system is paramount for optimizing bids, controlling costs, and ensuring sustainable growth in the competitive roofing industry.
Essential KPIs for Residential Remodeling Job Costing
Unlock true profitability and ensure regulatory compliance in your residential remodeling business by mastering essential Key Performance Indicators (KPIs) for job costing. This guide covers vital metrics and implementation strategies for sustainable growth.
Washington L&I Contractor Requirements: A Financial Guide
Navigate Washington State L&I requirements with this comprehensive financial guide for contractors. Learn about mandatory registration, surety bonds, insurance, workers' compensation, and crucial record-keeping to ensure compliance and avoid costly penalties.
ASC 606 Disclosure Requirements for Construction Revenue
ASC 606 mandates comprehensive financial disclosures for construction entities, vital for transparency, financial health assessment, and audit readiness. This guide clarifies the five-step model, essential disclosure categories, and the impact of critical judgments on revenue recognition.
Job Costing Methods: Actual vs. Estimated for Construction
Choosing the right job costing method—actual or estimated—is crucial for construction contractors to ensure profitability, maintain compliance, and make informed financial decisions. Understanding the differences and implications for revenue recognition and tax obligations is key to a robust financial foundation.
Tracking Labor Costs on Multiple Jobsites via Spreadsheets
Accurate construction labor cost tracking across multiple jobsites is critical for profitability and compliance. This guide details how to structure spreadsheets to account for wages, labor burden, and federal/state regulations like FLSA and Washington State prevailing wage laws, helping contractors avoid common pitfalls and optimize project financials.
Best Job Costing Software for Electrical Subcontractors
This guide explores the top job costing software solutions tailored for electrical subcontractors, helping them navigate unique financial complexities, ensure compliance, and boost project profitability through enhanced financial tracking and management.
Workers' Compensation Accounting for WA Contractors
Washington State's monopolistic workers' compensation system presents unique accounting challenges for construction contractors. This guide covers L&I risk classifications, GAAP compliance for accruals and job costing, and essential reporting requirements to ensure your construction business remains compliant and financially sound.
W-2 vs 1099: Construction Payroll Compliance Guide
For construction firms, correctly classifying workers as W-2 employees or 1099 independent contractors is a complex yet critical compliance issue. Misclassification can lead to severe IRS and state penalties, back taxes, and denied benefits, making adherence to federal and Washington State laws essential for financial stability and legal protection.
Optimizing Your Balance Sheet for Bonding and Growth
A strong, optimized balance sheet is critical for construction companies seeking to enhance bonding capacity, secure favorable financing, and achieve sustainable growth. It demonstrates financial health, meticulous management, and a reduced risk profile to sureties and lenders.
QuickBooks vs Sage vs Procore: Construction Accounting Guide
Choosing the right construction accounting software is crucial for managing project costs, payroll, invoicing, and compliance. This guide compares QuickBooks, Sage, and Procore to help contractors of all sizes find the perfect fit for their unique operational and financial demands.
State Sales Tax Filing for Construction Businesses
Navigating state sales tax for construction businesses is complex and critical. This guide provides an in-depth look at nexus, contract classification, and specific state regulations, particularly for Washington, to ensure compliance and avoid costly errors.
Choosing a Bookkeeper for AIA Billing and Lien Waivers
For construction contractors, choosing a bookkeeper with expertise in AIA billing and lien waivers is essential for financial accuracy, compliance, and cash flow management. This guide explores the critical aspects of specialized construction bookkeeping and why it's beneficial for your business.
How to Set Up Job Costing in ServiceTitan for Mechanical Contractors
Mastering job costing in ServiceTitan is crucial for mechanical contractors to ensure every project is profitable. This guide details setup from Pricebook accuracy and labor burden calculation to QuickBooks integration and performance analysis.
How to Set Up Payroll Burden Rates in Gusto for Construction Companies
Accurately setting up payroll burden rates in Gusto is crucial for construction companies to ensure precise job costing, competitive bidding, and overall project profitability. This guide explains how to calculate and manage these indirect labor costs effectively.
QuickBooks + Gusto Payroll Integration for Construction Contractors
For construction contractors, integrating Gusto Payroll with QuickBooks is crucial for precise job costing, compliance, and overall financial health. This guide details how to optimize this setup, covering vital IRS, GAAP, and Washington State requirements for accurate labor cost allocation.
How to Set Up Job Costing in QuickBooks for Construction Contractors
Job costing in QuickBooks for construction contractors is paramount for financial success, enabling precise tracking of project-specific income and expenses. This guide details setup, transaction allocation, and reporting to optimize profitability and strategic decision-making.
How to Create WIP Reports in QuickBooks for Construction Companies
Unlock financial clarity for your construction projects by mastering Work-in-Progress (WIP) report creation in QuickBooks. This guide provides step-by-step instructions for data extraction, calculation, and best practices, vital for bonding, banking, and strategic decision-making.
Construction Accounts Receivable Collections: Getting Paid Faster
Effective construction accounts receivable (AR) management is crucial for maintaining healthy cash flow. This guide provides actionable strategies, from proactive invoicing to leveraging legal remedies, to help contractors get paid faster and improve financial stability.
10 Bookkeeping Mistakes That Cost Contractors Thousands
Mastering construction bookkeeping is crucial for profitability. This guide reveals the top 10 common mistakes that can lead to significant financial losses for contractors and provides actionable strategies to avoid them, ensuring compliance and maximizing your bottom line.
Construction Financial KPIs: 12 Metrics Every Contractor Should Track
Unlock the power of data-driven decisions in your construction business by mastering essential financial KPIs. This comprehensive guide details 12 critical metrics, from project profitability to cash flow, equipping you to improve bids, control costs, and ensure compliance for sustained growth.
Contractor Year-End Closing Checklist: 15 Steps Before December 31
As December 31st approaches, construction contractors need a thorough year-end closing checklist to ensure financial accuracy, optimize tax positions, and maintain compliance with IRS and GAAP regulations. This guide provides 15 essential steps to prepare your construction business for a prosperous new year.
LLC vs S-Corp vs C-Corp for Contractors: Choosing the Right Entity
For construction contractors, selecting the right legal entity—whether a Sole Proprietorship, LLC, S-Corp, or C-Corp—is a foundational decision impacting liability, taxation, and growth. This guide helps you navigate these choices to optimize your construction business for financial efficiency and asset protection.
Construction Payroll Setup: A Complete Guide for Contractors
Setting up accurate and compliant construction payroll is fundamental for contractors, involving precise worker classification, securing federal and state IDs, and mastering complex tax and labor laws like prevailing wage. This guide provides an in-depth roadmap to navigate these intricacies.
Construction Audit Preparation: How to Get Your Books Audit-Ready
This guide provides construction contractors with a comprehensive overview of how to prepare for financial audits, detailing the documentation required and key areas of auditor scrutiny. Learn to maintain audit-ready books to satisfy requirements from surety companies, lenders, and regulatory bodies.
Construction Budgeting and Estimating: How to Build Accurate Project Budgets
Accurate construction budgeting and estimating are vital for project success and profitability. This guide explains how to build robust financial roadmaps, differentiate between estimating and budgeting, and implement best practices for managing project costs effectively. Learn expert strategies to improve your financial planning and secure your construction company's future.
Job Costing in the Construction Industry: Why Every Contractor Needs It
Job costing is a critical accounting method for construction firms, enabling precise tracking of all project-related expenses and revenues to determine individual job profitability. This detailed financial insight is vital for accurate bidding, proactive cost control, and strategic business growth.
Job Costing in Construction: The Complete Guide to Tracking Project Profitability
Job costing is the backbone of construction financial management. Learn how to allocate costs, track profitability per project, and avoid the most common mistakes contractors make.
Construction Accounts Payable: Best Practices & Aging Report Mastery
Master construction accounts payable aging reports and best practices. Learn how to comply with Washington State prompt payment laws (RCW 39.04) and federal Miller Act requirements while optimizing project cash flow.
Subcontractor Prequalification: The Financial Vetting Checklist for GCs
Learn how to protect your construction projects through rigorous subcontractor financial prequalification. This guide covers GAAP ratios, ASC 606 WIP analysis, and Washington State RCW requirements.
The Comprehensive Guide to Construction Company Startup Costs and Financial Planning
Starting a construction company requires navigating a maze of regulatory requirements, bonding laws, and complex tax elections. This guide breaks down the financial essentials for new contractors, from Washington State bonding limits to federal tax deductions for startup costs.
Contractor Profit Margins: Industry Benchmarks by Trade
Understand the industry benchmarks for contractor profit margins by trade, from GCs to specialty subs, and learn the regulatory factors that influence your bottom line.
How to Read a Construction P&L Statement: A Contractor’s Guide
Learn how to decode a construction Profit and Loss (P&L) statement. Understand revenue recognition under ASC 606, direct vs. indirect costs per IRS 263A, and how to spot job-costing errors.
Residential vs Commercial Construction Accounting: Key Structural Differences
Confused by the shift from residential to commercial project finances? Learn the critical legal and accounting differences, from ASC 606 compliance to Washington State retainage laws.
Construction Draw Schedule Management for Builders: A Compliance Guide
Master construction draw schedule management with our guide on compliance, Washington State lien laws (RCW 60.04), IRS PCM rules, and AIA documentation.
Multi-State Construction Tax Compliance: A Definitive Guide for Contractors
Navigating multi-state tax compliance in construction is a high-stakes challenge. Learn how Nexus, Apportionment, and Sales/Use Tax impact your out-of-state projects and how to avoid costly penalties.
Construction Equipment Depreciation: Tax Rules and Methods for Contractors
Learn the essential tax rules for construction equipment depreciation, including MACRS, Section 179, and Bonus Depreciation. Stay compliant with IRS and Washington State regulations.
Contractor Insurance Costs: How to Account for GL, WC and Builder's Risk
Learn the GAAP compliant methods for accounting for General Liability, Workers' Comp, and Builder's Risk insurance in construction to ensure accurate job costing and successful audits.
Frequently Asked Questions
The AIA G702 serves as the Application and Certificate for Payment, summarizing the contract sum, changes, and amount due, while the G703 serves as the Continuation Sheet, providing a detailed breakdown of costs based on the Schedule of Values. Together, they provide a standardized format for architects and owners to verify progress against the contract. (Source: AIA Document G702-1992 Instructions, Summary of Application and Certificate for Payment)
The AIA G702 serves as a summary document where the contractor certifies that the work described in the accompanying G703 is complete. It includes the original contract sum, net change orders, total completed and stored to date, retainage amounts, and the remaining balance to finish. (Source: AIA Document G702-1992, Instructions)
The Schedule of Values must be broken down into specific line items that represent the entire contract sum, typically using CSI MasterFormat divisions, to allow the architect to determine the percentage of completion for each work item. This breakdown must be submitted and approved by the architect prior to the first application for payment. (Source: FASB ASC 606 / AIA A201 General Conditions, Section 9.2)
The Schedule of Values must break down the entire contract sum into specific line items or portions of work, such as labor and materials for specific trades. This breakdown is used as the basis for reviewing the contractor's periodic applications for payment. (Source: FASB ASC 606, Revenue from Contracts with Customers)
For public improvement contracts, public bodies must reserve a contract retainage not to exceed five percent of the moneys earned by the contractor. This sum is held as a trust fund for the protection and payment of laborers, subcontractors, and state taxes. (Source: Revised Code of Washington, RCW 60.28.011(1)(a))
For public improvement contracts, public bodies must reserve a contract retainage not to exceed five percent of the moneys earned by the contractor, which is held as a trust fund for the protection of laborers and the state. (Source: Revised Code of Washington, RCW 60.28.011(1)(a))
Yes, Washington law recognizes electronic records and signatures as having the same legal effect as physical signatures, provided they meet the standards for authenticity and intent under the Uniform Electronic Transactions Act. (Source: Revised Code of Washington, RCW 1.80.060)
Yes, Washington law stipulates that a record or signature may not be denied legal effect or enforceability solely because it is in electronic form. This applies to construction contracts and payment applications provided they meet security and attribution standards. (Source: Revised Code of Washington, RCW 1.80.060)
On public works projects exceeding $20,000, the contractor may request that the retained funds be placed in an interest-bearing account, with all interest earned belonging to the contractor. (Source: Revised Code of Washington, RCW 60.28.011(4)(b))
General contractors must pay their subcontractors for satisfactory performance within ten days of receipt of each progress payment from the state or any county, city, or town. (Source: Revised Code of Washington, RCW 39.04.250)
Yes, if payment is not made within thirty days of a proper pay request, the unpaid amount shall bear interest at the rate of one percent per month or fraction thereof until paid. (Source: Revised Code of Washington, RCW 39.76.011)
If a prime contractor receives payment from an owner, they must pay their subcontractors for satisfactory performance no later than ten days after receiving the payment. Failures may result in interest penalties. (Source: Revised Code of Washington, RCW 39.04.250)
The 'Materials Presently Stored' column typically includes the value of materials and equipment suitably stored on-site or at an agreed-upon off-site location for which payment is sought, though they are not yet incorporated into the work. (Source: AIA Document G703-1992 Instructions, Column F)
Column F is used to account for the value of materials and equipment that have been purchased and are stored on-site or at an approved off-site location, but have not yet been incorporated into the work. (Source: AIA Document G703-1992, Instructions)
Retainage must be released within 60 days of final acceptance of the project, provided that all necessary releases from the Department of Revenue, Employment Security Department, and Department of Labor and Industries are obtained. (Source: Revised Code of Washington, RCW 60.28.011)
Construction Finance Glossary
WIP Reporting
Track project financials with Work-in-Progress schedules.
Read guideAIA Billing
Master G702/G703 progress billing forms.
Read guideJob Costing
Know your true margins on every project.
Read guideLien Waiver Management
Protect your payment rights on every project.
Read guideOver/Under Billings
Understand billing vs. earned revenue.
Read guideHave questions about your construction finances?
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