Accavallo & Company, LLC

Mastering Construction-Based Bookkeeping and Project-Based Accounting

In the world of finance and accounting, the construction industry stands as a unique and challenging sector. Unlike traditional accounting, which deals with routine business transactions, construction accounting revolves around individual projects, demanding careful financial management from inception to completion.

  1. Accurate Job Costing: The Foundation of Success

For construction firms, ensuring the profitability of each project is paramount. This requires a meticulous approach to job costing. Every project incurs both direct and indirect costs, making it crucial to have a precise method for tracking income and expenses. Accurate job costing provides the foundation for informed decision-making and helps companies stay on track with their budgets.

  1. Recording Day-to-Day Financial Transactions

The construction industry is marked by a constant flow of financial transactions. Recording these transactions accurately and in real-time is essential for maintaining financial transparency and ensuring that projects are financially viable. An organized and detailed record of daily financial activities simplifies the tracking of expenses and income.

  1. Selecting the Right Revenue Recognition Method

In construction accounting, there are various methods for recognizing revenue. These methods include the cash basis, accrual basis, the completed contract method, and the percentage of completion method. Large contractors often utilize the percentage of completion method, a type of accrual accounting. This method involves estimating the contract’s finish date and recognizing income based on the work completed. Choosing the appropriate revenue recognition method can significantly impact a project’s financial outlook.

  1. Embracing Construction Accounting Software

As technology continues to advance, the construction industry has not been left behind. The use of construction-specific accounting software will streamline processes, improve data accuracy, and enhance project management capabilities. Modern accounting software allows for real-time updates, making it easier to monitor project progress and financial health.

  1. Tracking Job Expenses

Construction projects are prone to cost fluctuations, change orders, and unexpected expenses. Effective expense tracking is vital for managing project budgets and ensuring profitability. By closely monitoring job expenses, construction companies can mitigate financial risks and identify areas for cost-saving opportunities.

  1. Reconciling Bank and Supplier Statements

Reconciliation is a crucial step in maintaining financial accuracy. For construction businesses, reconciling bank and supplier statements ensures that all financial transactions are accounted for and discrepancies are promptly addressed. This process helps prevent errors and maintains a clear financial trail for auditing purposes.

  1. Navigating Industry-Specific Challenges

Construction projects are often multi-year endeavors characterized by seasonality and unpredictability. Fluctuating costs, change orders, and the mobility of workers and machinery further complicate financial management. Successful construction companies must navigate these challenges by staying adaptable, making data-driven decisions, and continuously monitoring project progress.

Construction-based bookkeeping and project-based accounting demand a specialized approach to financial management. By adopting these practices and embracing technology, construction companies can enhance their financial health, mitigate risks, and ultimately thrive in a dynamic and ever-evolving industry.


If you need additional information, please contact us at Accavallo & Company for further consulting: office at (203) 925-9600 or [email protected].


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Sherri Fisher is a Tax Manager at Accavallo & Company, LLC.  Sherri has longstanding expertise in Trust and Estate Taxation, Eldercare, and Estate planning. Sherri appreciates the relationships she has built with estate planning attorneys and advisors, to provide a team approach to assisting her clients. Sherri also has seasoned experience in business and individual taxation and is partial to assisting start-ups in developing overall accounting and operating plans.

Prior to joining Accavallo & Company, LLC, Sherri was a manager in a large firm, servicing high net worth trust clients, business, and personal clients. She was also a Partner in a large bookkeeping firm, which specialized in cloud accounting systems for regional and national companies. Sherri led a team in assisting clients to organize their accounting systems.  She is a graduate of Florida Atlantic University with a B.S. degree in Accounting.    

Sherri’s experience includes working with companies and organizations in a variety of industries including:

  • Investment Trusts

  • DAPT and Family Investment Partnerships

  • Estate and Probate Administration

  • E-Commerce

  • Manufacturing

  • Construction

  • Real Estate Investment

  • Marketing and Service-based industries

In addition to her professional accomplishments, Sherri is an Intuit Advanced Pro Advisor, Intuit Future Firm Advisory Board member, member of the Valley WIN Network, and proudly served as past Connecticut Public School liaison for the Yale Tommy Fund for Childhood Cancer. Sherri enjoys time with her family, Cleveland sports, thrifting and gardening.