Owners often know that something about the numbers is not working before they know what kind of help would address it. This checklist has seven questions. Each one points to a kind of conversation: the books, the monthly close, forward-looking cash and financing decisions, or tax planning.
It is not a score or a diagnosis, and it has no benchmarks. Nothing is submitted anywhere. It is general information about accounting work and not advice about a specific business.
How to use it
Read a question and answer it from what exists today, not from what should exist. If you can answer with a document or a person’s name, that topic may already be in hand. If the honest answer is “it depends who you ask” or “I would have to rebuild it,” note it. Unclear answers that cluster in the same group usually point to the same kind of conversation. Start with the topic that matters most to the decision in front of you.
1. Current and reconciled books
The question. Are the bank, credit card, loan, and payroll liability accounts reconciled through the end of last month, and can you say who did it and when?
If the answer is unclear. The records may have fallen behind, been inherited, or never been checked. Bringing them current usually comes before anything else can be relied on. This is typically a bookkeeping and outsourced accounting conversation.
Where to read more. Cleaning Up Contractor Books describes what a catch-up involves. The service is described at Outsourced Accounting.
2. Job-cost coding and job-margin visibility
The question. For one open job, can you see costs to date by type (labor, material, subcontract, equipment) and the margin the job is showing, and do you know which margin that is?
If the answer is unclear. Costs may be sitting in uncoded accounts, or the books may be organized by expense category instead of by job. That can be a job-costing setup question for the accounting records. If the setup exists and the numbers still change after they are used, it may be a question about how the close is run.
Where to read more. Job Costing for Contractors covers the structure. Fractional Controller for Contractors covers the monthly close.
3. WIP and cost-to-complete estimates
The question. Is there a work-in-progress schedule, is it reconciled to the books each month, and who updates the estimated cost to complete on each open job, and how often?
If the answer is unclear. The schedule may not be reconciled to the books each month, or the estimates may rarely be refreshed, so margin can move after a month is closed. A schedule kept in a spreadsheet is not a problem in itself; what matters is that it ties to the ledger and is kept current. This is typically a controller conversation about the close and the schedule. If the open question is what the margin trend means for the next decision, it can also be a CFO conversation.
Where to read more. The WIP Schedule for Contractors explains the schedule. Construction Profit Fade explains why estimates matter. The service is described at Fractional Controller.
4. Retainage and collection timing
The question. Do you know how much retainage customers hold and how much you hold from subcontractors, by job, and when each part is expected to be released or paid?
If the answer is unclear. Retainage may be recorded with ordinary receivables or payables, or release dates may not be tracked by anyone. That affects cash timing more than it affects profit. The record-keeping side is accounting and controller work. Turning the dates into a cash picture is CFO-level work.
Where to read more. Contractor Cash-Flow Forecasting shows how retainage and pay applications enter a weekly forecast.
5. Near-term cash commitments
The question. For the next 13 weeks, can you list the payrolls, loan payments, insurance, tax payments, and owner distributions, and say what cash is expected to cover them?
If the answer is unclear. Cash may be managed from the bank balance. That is common and it can work until a gap appears. Looking ahead week by week is forward-looking work, which is a fractional CFO conversation.
Where to read more. Contractor Cash-Flow Forecasting walks through a worked example. The service is described at Fractional CFO.
6. Lender and surety reporting needs
The question. If a lender or surety asked tomorrow for current financial statements and a WIP schedule, could you produce them without rebuilding anything?
If the answer is unclear. The reporting may not yet produce what outside parties ask for. Consistent statements and supporting schedules are controller work. Preparing the package and weighing the terms against the company’s cash is CFO-level work.
Where to read more. What Sureties Look At in Contractor Financial Statements describes what a surety reads. See also Fractional Controller and Fractional CFO.
7. Upcoming decisions with tax consequences
The question. Is an equipment purchase, a change in structure, a sale, or a year-end payment coming that you would want to understand before it is made, rather than after the return is prepared?
If the answer is unclear. Planning is the work of understanding the tax consequences of a decision while the facts can still change. This is a business tax strategy conversation.
Where to read more. The service is described at Tax Strategy.
Which conversation a topic usually points to
| Topic | Usually points to |
|---|---|
| 1. Current and reconciled books | Bookkeeping and outsourced accounting |
| 2. Job-cost coding and job-margin visibility | Outsourced accounting; controller if the close is the issue |
| 3. WIP and cost-to-complete estimates | Controller; CFO if the margin trend drives a decision |
| 4. Retainage and collection timing | Accounting and controller for records; CFO for cash timing |
| 5. Near-term cash commitments | Fractional CFO |
| 6. Lender and surety reporting needs | Controller for reporting; CFO for the package and terms |
| 7. Upcoming decisions with tax consequences | Business tax strategy |
The table describes where a topic usually leads. It does not count, rank, or grade anything, and a business may need more than one kind of conversation. For the wider picture of contractor accounting, see Construction & Contractor Accounting.
Where to go next
If one or two of these are unclear and a decision is coming, a useful first step is a conversation about that decision. Start a conversation. Please describe the decision or situation in the contact form. Do not include financial records or login credentials. We can identify which records and access are needed when defining the scope.
Corey Roder, CPA is the founder of Corey Roder, CPA PLLC. He is a licensed CPA who founded a construction company and served as its COO and CFO, managing the financial and operational decisions of that business. Earlier in his career he worked as an auditor at Grant Thornton. More about the firm: Company & People.
Corey Roder, CPA PLLC does not itself perform audits, reviews, or other assurance engagements. Need an audit, review, or other assurance engagement? We can help coordinate it. Corey Roder, CPA PLLC maintains referral relationships with independent CPA firms that provide these services. The assurance engagement is separately contracted with and performed by the independent CPA firm.