Project Accounting for Construction Firms

Account by project, not just by company

Every project needs its own budget, cost ledger and margin report. Without it, a profitable company can be quietly funding loss-making sites.

Essential disciplines

• Budget by cost element: materials, labour, subcontract, plant, preliminaries
• Record committed costs at order date, not payment date
• Value work in progress and certified work monthly
• Reconcile retentions and variations formally

Watch cash on certificates

Payment certificates lag cost. Model the gap and secure working capital before mobilisation, not during.

Close projects properly

A closeout report comparing tendered margin to actual margin makes the next tender sharper.