- CFMA Benchmark Report 2024 shows contractors using a construction-specialist CPA average 2% higher gross profit thanks to tighter job-cost tracking.
- Five high-ROI services: job-cost coding, WIP & over/under billing, 263A/UNICAP compliance, surety-bond ratio prep, and multi-state sales-/use-tax filings.
Need expert help? Compareconstruction CPAs on Sam’s List!
Why Construction Accounting Is a Different Beast
- Percentage-of-completion vs. completed-contract methods affect tax timing (IRC 460).
- Work-in-progress (WIP) schedules drive bonding capacity.
- Multi-state contract sites trigger nexus and use-tax obligations.
- Equipment costs require 263A capitalization, not expense.
- Change orders and retainage create cash-flow gaps.
Five Key Services a Construction CPA Provides
1. Job-Cost Coding & Cost-to-Complete Forecasts
CPA sets cost codes (labor, materials, subs, equipment) and updates ETC weekly.
Example:Commercial GC flagged a $112K overrun on steel before 50% completion—margin saved.
2. WIP Schedule & Over/Under-Billing Analysis
WIP ties contract value, cost-to-date, and billings to calculate true profit.
CPA’s monthly WIP caught $700K under-billing, freeing cash for payroll.
3. 263A Capitalization & Section 179 Planning
Heavy equipment additions require UNICAP; CPA optimizes 179 vs. bonus depreciation.
Bulldozer expensed under 179 up to $1.22M limit—tax savings $240K.
4. Bonding & Surety Ratio Preparation
CPAproduces GAAP statements with <1.5 debt-to-equity ratio, boosting bonding line.
Increased bonding capacity by $4M for highway contract bid.
5. Multi-State Sales-/Use-Tax & Payroll Nexus
Tool rentals and cross-state labor trigger filings; CPA registers and remits to avoid 10% penalties.
Arizona-based sub avoided $18K use-tax audit in Nevada.
How much does an accountant cost for a construction company?
$1,000–$3,000 per month for <$10M revenue; scales with contract volume.
Year-end corp + WIP tax package runs $5K–$10K for multi-state GCs.
What is a WIP schedule in construction accounting?
A spreadsheet that tracks contract value, cost to date, percent complete, and over/under billings.
Banks and sureties rely on WIP to assess profitability and bonding limits.
Frequently Asked Questions
Completed-contract vs. percentage-of-completion—when can I use completed?
Contracts under $25M average gross receipts may elect completed-contract (IRC 460(e)).
Can I expense small tools immediately?
De minimis safe harbor: tools < $2,500 per item can be expensed (IRS Reg. 1.263(a)-1(f)).
Are retainage amounts taxable when billed or when collected?
Taxable under percentage-of-completion as earned, even if retainage held.
Red-Flag Answers When Interviewing CPAs
- No WIP schedule template—“We’ll pull one together later.”
- Treats every state the same for sales-/use-tax.
- Ignores bonding-capacity impact of financial statements.
Construction-Company Readiness Checklist
☐ Job-cost codes mapped in QuickBooks Desktop/Online + T-Sheets
☐ Current WIP schedule exported
☐ Equipment purchase list with in-service dates
☐ Multi-state payroll reports organized
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Author: Kimi, Co-founder of Sam’s List
Kimi writes about what she's learning while building Sam’s List and shares honest takeaways from her conversations with accountants and financial advisors across the country. None of this is financial advice—just the stuff most business owners wish someone told them sooner.
