Percentage-of-completion (PCM) is a technique of revenue recognition which occurs when a contractor records money based on how much of the project they've completed. Because PCM is an accrual approach, earnings are recognized when the contractor invoices, not when they are paid. Contractors can seek advice from construction CPAs on a variety of PCM approaches for determining how much of a project "count" as completed. Cost-to-cost approaches, physical completion methods, and labor methods are among them. For tax purposes, the IRS mandates contractors with revenue exceeding a specific yearly average or contracts of a certain length to employ this method.
Confused about hiring a CFO or controller for your construction business? This article explains the key differences, helping you decide which role fits your needs. Learn when to hire each, and explore flexible options like fractional CFO or outsourced controller services to manage your finances effectively.
Read MoreHiring the right construction accountant is crucial for your company’s financial success. Look for industry-specific experience, job costing expertise, and familiarity with construction software. Consider outsourcing for cost savings and access to specialized knowledge.
Read MoreThis is RedHammer's guide to Construction Accounting 101. It covers essential topics like job costing, billing methods, compliance, and software integration, helping you navigate the unique challenges of construction finance to ensure profitability, compliance, and financial stability in your projects.
Read MoreThis is RedHammer's comprehensive guide to successful construction software implementation. It covers best practices, common pitfalls, and software recommendations tailored to companies of all sizes. With expert insights, this guide helps construction businesses optimize processes, ensure smooth transitions, and achieve long-term success.
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