<\/p>\n
The installment method is usually used when your client makes payments over time. In these cases, there\u2019s a risk that you won\u2019t collect the full payment, so it\u2019s wise to wait until you actually receive the payment to recognize it as income. By delaying revenue recognition until after you complete a project, you can also defer the recognition of related income tax. To ensure you aren\u2019t surprised by a customer withholding part of the fee you\u2019re owed, make sure you account for contract retainage properly when budgeting for a project and invoicing clients. You could have one account reserved for paying expenses, another one for managing payroll, and a third one for receiving payments for clients.<\/p>\n<\/p>\n
<\/p>\n
At NorthStar Bookkeeping, we help construction firms develop clear accounting processes that fit the industry\u2019s demands. With years of experience in construction bookkeeping, our team can provide the expertise to simplify financial management, allowing you to focus more on building projects and less on balancing books. Read on to discover the essentials of effective construction bookkeeping<\/a> construction accounting and how we can support you with our guide to construction accounting. From tracking project expenses to handling vendor payments, there\u2019s no shortage of detailed accounting tasks that require precise attention.<\/p>\n<\/p>\n