Construction Accounting Templates in Microsoft Word (DOC)

General FAQs

• What Is Construction Accounting?

  Construction accounting is a formulation of financial reports, particularly for a construction project. Unlike regular accounting, construction accounting is highly specialized due to its industry movement, where assets, liabilities, equities, and others are always in mobilized. 

• What are Job Costings?

  Job costings can vary a lot, depending on the scale of your construction project. Nonetheless, some general points you can have for your job costings can be the costs spent (with your state currency), labor used (measured through hours), and physical project completion (measured through units).

• What Are the Differences between Accrual and Cash Accounting?

  In a basic sense, the cash accounting method mainly recognizes revenue only when cash is received while the expenditures have also been paid out. On the contrary, the accrual accounting method promptly records revenue after product or service has already been brought out to the customer even yet with the cash paid. The payment is, however, expected to be delivered eventually. Cash comes in first for cash accounting, while revenue should be earned first for accrual accounting. 

• What to Choose between Completed Contract Method and Percentage Method Completion?

  First, consider knowing the project length, specify the dates. Next, identify the long-term contracts that it pertains, assess how the workloads can comfortably match with the labor it demands. Then, evaluate your construction company size, particularly through annual gross. If you see it goes beyond $10 million, you're a large contractor. Percentage Method Completion or PMC is more common to use when with large contracts, while the latter is commonly observed on small contractors. Nonetheless, you may collaborate with specialists still.

• What Is the Significance of Construction Accounting?

  With construction accounting documentation, transactions are enforced with transparency and integrity to the maximum profitability of the construction company.