You get paid when the job is done.
Construction, trades, field services, and contractors. Costs land for months before the revenue does, so the monthly P&L tells you almost nothing until the work is closed out.
You will recognise this if…
- A great month on paper was really a month you billed a deposit
- You find out a job lost money after it is finished
- Materials and labour are recorded, but not against the job that consumed them
- Retainage is somewhere in receivables and nobody is tracking it
- Change orders were done, and possibly never billed
Why the close is hard here
These are the four things that most often make the monthly close wrong here — and what has to be true for it to be right.
Revenue and cost land in different months
Work spans periods. Without a work-in-progress schedule, every month is either overstated or understated and you cannot tell which.
Over- and under-billing hides in cash
Billing ahead of completed work looks like profit. Billing behind it looks like a loss. Both are timing, and both are invisible unless WIP is calculated each month.
Job costing has to be built in, not bolted on
Allocating labour, materials, subs, and equipment to the job that consumed them is a structural decision in the chart of accounts.
Retainage is not normal AR
It is receivable, but not collectable on the usual terms, and it ages differently. Held in the same bucket, it quietly distorts your aging.
What we do about it
- Monthly WIP schedule with over- and under-billing calculated
- Job-level cost tracking for labour, materials, subs, and equipment
- Margin by job, closed and in progress
- Retainage tracked separately from trade receivables
- Change orders reconciled against what was actually billed
Covered here: Construction & trades → · Field services → · Government contractors →
Questions we get asked
What is a WIP schedule and do we need one?
It compares the cost incurred on each open job against the revenue recognised, showing whether you have billed ahead of or behind the work. Any business with jobs spanning month-end needs one to know its real position.
Can you work with our job-costing software?
We reconcile to it. The estimating or field system stays your operational source of truth; the accounting close ties back to it.
Do you handle DCAA-compliant cost accounting?
Government contract work has its own requirements around segregating direct and indirect costs and supporting indirect rates. That is covered on the government contractors page.
How is retainage handled?
Tracked as its own receivable with its own aging, so your standard AR aging stays meaningful.
Not sure this is you?
Most owners sit across two of these. A short conversation sorts out which parts actually apply.
Talk to a finance pro →