Accounting for construction & contracting
Progress billing, retentions, advances and subcontractor certifications make contracting the hardest sector to account for honestly. We keep every project's true position visible monthly.
Contracting issues we handle
- Project-level cost tracking against budget and certified value
- Retention receivable and payable tracked to release dates
- Advance payments and their recovery through payment certificates
- VAT tax points on progress claims — not just the final invoice
- Subcontractor reconciliations, back-charges and contra accounts
- One overrunning project hiding inside company-level profit
Every project is its own P&L
Company-level profit means little when one job's overrun hides inside another's margin. We run project ledgers — costs committed and incurred against contract value, certifications billed, retentions held, advances recovered — so each job's real position appears in your monthly report, not at final account.
VAT on construction follows certifications and payments, creating rolling tax points through the contract. Booking VAT only at final invoice understates earlier returns — a common and expensive finding we prevent.
FAQs
When is VAT due on a construction contract?
Generally at the earliest of certification milestone, invoice date or payment receipt for each supply — so progress billing creates VAT liabilities period by period, not once at handover.
How should retention be treated in the books?
Certified retention is a receivable with its own release schedule; its VAT treatment can differ from its commercial timing, so we track both separately rather than assuming they align.
Can you reconcile subcontractor accounts?
Yes — subcontractor certifications, back-charges and advances are reconciled monthly, which is where contracting disputes are either prevented or born.
Do project ledgers replace statutory books?
No — they reconcile into the statutory trial balance every month, so management reporting and compliance never tell different stories.
Run the numbers with people who know your industry
Free consultation. Bring your latest P&L — or your shoebox of invoices. Both are fine.