--- title: "Month-end close for construction companies & contractors" description: "Month-end close for construction companies & contractors: outsourced month-end close: checklist-driven accruals, prepaids, depreciation, reconciliations." url: https://ledgerbpo.com/industries/construction/month-end-close/ updated: 2026-09-11 publisher: LedgerBPO (SS Support Network LLC) language: en-US --- # Month-end close for construction companies & contractors Month end close for construction companies & contractors is only finished when the work-in-progress schedule agrees with the ledger. Your accountant runs the close through our CloseTrack checklist: job costs cut off at the period end, pay apps and retainage reconciled, subcontractor accruals booked for work done but not yet invoiced, and over and under billings posted from the WIP schedule. - Since 2020 - US · UK · CA · AU - Named accountant plus backup - Your software, no lock-in [Get a custom quote](https://ledgerbpo.com/get-a-quote/) [Book a 20-minute call](https://ledgerbpo.com/book-a-call/) Updated September 2026 ## How it runs for construction companies and contractors Equipment depreciation, payroll accruals and workers' compensation are allocated to jobs. A second accountant reviews the package through Two-Tier Review before the job profitability report, P&L and balance sheet are released to you and your bonding agent. ## What is month-end close outsourcing? Month-end close outsourcing means an external accounting team performs the steps that turn a month of transactions into finished financial statements: reconciling every account, posting accruals, prepaids and depreciation, checking cut-off, reviewing and locking the period. You keep your software and your accountant. The provider runs the checklist on an agreed calendar and hands you reviewed statements. ## What we handle for construction companies and contractors - Job cost cut-off with accruals for unbilled subcontractor work - WIP schedule updated and over and under billings booked - Retainage receivable and payable reconciled to contract schedules - Payroll, burden and equipment depreciation allocated to jobs - Close checklist signed off by a second reviewer before release ## The KPI that matters here Close package including the WIP schedule delivered by business day 10 each month. ## Construction compliance notes ### Sales tax on materials In most US states a contractor pays sales tax on materials at purchase and does not charge tax on the finished job. A few states, including Arizona and Washington, tax the contract itself, and many states have separate rules for repair work versus new construction. We set up tax codes per state and contract type and track exempt purchases with resale or project certificates on file. ### Retainage Retainage withheld by owners is recorded as retainage receivable, and retainage you withhold from subcontractors is recorded as retainage payable. Several states cap retainage on public work, commonly at 5%, and set release deadlines after completion. We track the release date per contract so closeout billing goes out on time. ### Job costing and WIP Bonding companies and lenders expect a work-in-progress schedule that ties to the general ledger, with contract value, costs to date, estimated cost to complete and billings to date. We maintain the schedule monthly and book over and under billing entries so the P&L reflects percentage of completion. ### CIS in the UK Under the Construction Industry Scheme, UK contractors deduct 20% from registered subcontractors and 30% from unregistered ones, and file a monthly CIS return with HMRC. We verify subcontractors, prepare the deduction statements and CIS return workings, and reconcile deductions suffered against your PAYE liability. Your accountant or the business submits the return. ## Construction software we work in - [QuickBooks Online](https://ledgerbpo.com/software/quickbooks-online/) - [QuickBooks Desktop](https://ledgerbpo.com/software/quickbooks-desktop/) - [Xero](https://ledgerbpo.com/software/xero/) - [Bill.com](https://ledgerbpo.com/software/bill-com/) - [Gusto](https://ledgerbpo.com/software/gusto/) - [Sage 50](https://ledgerbpo.com/software/sage-50/) - Buildertrend - Procore - [All 50 platforms](https://ledgerbpo.com/software/) ## More for construction companies and contractors Other services for construction - [Bookkeeping](https://ledgerbpo.com/industries/construction/bookkeeping/) - [Invoicing and billing](https://ledgerbpo.com/industries/construction/invoicing-and-billing/) - [Accounts receivable](https://ledgerbpo.com/industries/construction/accounts-receivable/) - [Accounts payable](https://ledgerbpo.com/industries/construction/accounts-payable/) - [Bank reconciliation](https://ledgerbpo.com/industries/construction/bank-reconciliation/) - [Financial reporting](https://ledgerbpo.com/industries/construction/financial-reporting/) - [All construction services](https://ledgerbpo.com/industries/construction/) Month-end close in other industries - [Marketing agencies & consultancies](https://ledgerbpo.com/industries/agencies/month-end-close/) - [Auto repair shops & dealerships](https://ledgerbpo.com/industries/auto/month-end-close/) - [Behavioral health practices](https://ledgerbpo.com/industries/behavioral-health/month-end-close/) - [Daycares, schools & education](https://ledgerbpo.com/industries/childcare-education/month-end-close/) - [The full month-end close page](https://ledgerbpo.com/services/month-end-close/) ## Frequently asked questions ### Why does the WIP schedule matter for the monthly close? Without a WIP schedule, revenue follows whenever pay apps happen to be issued, so a heavy billing month looks profitable and the next one looks weak. The schedule compares costs to date with estimated total costs to calculate earned revenue, and the difference from billings is booked as an asset or liability. Sureties and lenders expect this each month. ### How do you accrue subcontractor costs at month end? The accountant asks each project manager to confirm work performed but not yet invoiced by subcontractors, priced from the subcontract schedule of values. Those amounts are accrued into job cost and reversed when the actual draw request arrives. This keeps job margins from swinging when a subcontractor bills late. ### What does the close package include for a bonding company? The package includes the P&L, balance sheet, WIP schedule with over and under billings, backlog by job, aged receivables with retainage separated, and a cash and line-of-credit summary. Your CPA still prepares any reviewed or audited statements; our package gives them reconciled books and schedules to start from. Next step ## Books closed. Invoices paid. Every month. Tell us what is going on with your books or billing. You will hear from a named person within 1 business day, with a custom quote and a plan for the first close. - Reply from a named person within 1 business day - No setup fee, month-to-month - Your software, your data, no lock-in Start with a custom quote [Get a custom quote](https://ledgerbpo.com/get-a-quote/) [Book a 20-minute call](https://ledgerbpo.com/book-a-call/) Or call [+1-657-777-0006](tel:+16577770006) during US, UK or Australian business hours. --- Source: https://ledgerbpo.com/industries/construction/month-end-close/ · Contact: https://ledgerbpo.com/contact/ · Full site map for agents: https://ledgerbpo.com/llms.txt