Construction & Trades
Accounting for Construction & Trades
Construction accounting is its own discipline: percentage-of-completion vs. completed-contract method, job costing per project, prevailing wage compliance, lien tracking, equipment depreciation. Rubric Financial supports general contractors, specialty trades (electrical, plumbing, HVAC, roofing, concrete), and small construction firms across the U.S.
What We See Most
Common challenges in this category
The accounting and tax issues we run into repeatedly with construction & trades clients.
- Choosing between percentage-of-completion and completed-contract revenue recognition — affects taxable income timing and lender reporting
- Job costing per project: direct labor, materials, subcontractors, equipment, allocated overhead — without this, gross margin per job is unknowable
- Mechanics' liens and bond requirements that vary by state and project size
- Prevailing wage compliance on public-works contracts (Davis-Bacon federal, state equivalents) — payroll filings are different and audited
- Heavy equipment purchases that need Section 179 / bonus depreciation planning — equipment is often the biggest line on the balance sheet
- Multi-state operations as crews travel across state lines — payroll and sales tax nexus on materials
How We Help
Services that matter most for construction & trades
Accounting
Job costing setup, percentage-of-completion accounting, WIP schedules required by bonding companies and lenders.
Learn morePayroll
Multi-state payroll with prevailing wage handling, union reporting, certified payroll filings (WH-347), and workers' comp class code accuracy.
Learn moreBusiness Tax & CPA
Section 179 and bonus depreciation strategies for equipment purchases, multi-state filings, look-back interest on percentage-of-completion contracts.
Learn moreFP&A
Job-level profitability dashboards, backlog analysis, equipment utilization, and cash flow forecasting around lumpy progress billings.
Learn moreFractional CFO
Bonding capacity analysis, lender package preparation, owner compensation modeling, and succession planning for trade contractors.
Learn moreFAQ
Common questions
- Percentage-of-completion or completed-contract — which method should I use?
- Percentage-of-completion is required for long-term contracts under most tax rules above the small-contractor threshold. Below the threshold (~$30M average gross receipts), you can use completed-contract for tax purposes — recognizing income only when the job finishes. For book purposes, lenders and bonding companies typically expect percentage-of-completion.
- How do I track job costs without complicated software?
- QuickBooks Online with class tracking enabled by job works for small contractors. Allocate direct costs (labor, materials, subs) to each job; allocate overhead via a burden rate (typically 15–30% of direct labor). Generate a job profitability report monthly. At larger scale, dedicated construction software (Sage 100 Contractor, BuilderTREND) earns its cost.
- Should I buy equipment in December or January?
- Section 179 and bonus depreciation let you deduct equipment immediately in the year placed in service. December purchases mean deductions in the current year (potentially huge if you're in a profitable year); January means waiting a full year. But 'placed in service' is what counts — not 'ordered.' Plan around delivery timing.
- What's the right way to handle prevailing wage on public projects?
- Federal Davis-Bacon and state equivalents require contractor wages on public works to meet local prevailing rates. Certified payroll (WH-347) must be filed weekly. Mistakes here trigger DOL audits and debarment from future public work. A payroll provider experienced in certified payroll is essential.
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