Completed Contract Method · Revenue Recognition · Construction Accounting · Tax
Completed Contract Method · Revenue Recognition · Construction Accounting · Tax Planning
Completed Contract
Method.
The completed contract method recognizes all revenue and expense on a project when it reaches substantial completion — not as work progresses. For most commercial subcontractors doing multi-month projects, percentage of completion is the required GAAP method. But completed contract still applies in specific situations and has significant tax implications worth understanding.
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SPM vs. Other CFO Firms
Most CFO Firms Serving This Trade
- High revenue minimums — most won't serve under $5M
- Advisory only — no bookkeeping, no implementation
- No job costing setup or ControlQore management
- No monthly WIP as standard deliverable
- No pricing published — discovery call required
- No vetted partner network for bonding, lending, or liens
- No prevailing wage specialty
The Construction CFO — SPM
- Serves $1M–$12M — starts at $1,900/month
- Full implementation — bookkeeping, job costing, CFO advisory
- ControlQore setup and managed for you every month
- Monthly WIP standard in Executive tier
- Full pricing published — no discovery call to find out costs
- Vetted partners for bonding, lending, lien services, payroll
- Prevailing wage and Davis-Bacon specialty
What We See in This Business
01
You're Using Completed Contract When You Should Be on Percentage of Completion
Many small subcontractors default to completed contract because it's simpler — no WIP schedule, no percent complete calculations, no earned revenue tracking. But for commercial subcontractors doing projects longer than a few weeks, completed contract produces financial statements that don't reflect actual business performance and may not be GAAP-compliant for your contract size.
02
Your P&L Is Lumpy and Doesn't Reflect Work in Progress
Under completed contract, your P&L shows nothing on active projects — all revenue and expense recognition waits until completion. This makes monthly financial statements meaningless for management purposes. A business with $3M of active work in progress shows no revenue on those projects until they close. Bankers and sureties see a distorted picture.
03
You Don't Know the Tax Difference Between the Two Methods
For tax purposes, small contractors — generally under $30M average annual gross receipts — have more flexibility in revenue recognition method than large contractors. The completed contract method can be advantageous for tax purposes in certain situations — but requires coordination with your CPA and consistent application. The tax method and the GAAP method can legally differ.
How SPM Fixes It
When Completed Contract Is Appropriate
Completed contract is appropriate when: projects are short-duration (under 12 months), the outcome cannot be reliably estimated, or you qualify as a small contractor under IRS rules and have elected the method for tax purposes. For most commercial subcontractors with projects over 30–60 days, percentage of completion is the required GAAP method. Completed contract on a 9-month commercial project produces financial statements that misrepresent your financial position.
The Tax vs. GAAP Distinction
Your tax return and your GAAP financial statements can use different revenue recognition methods — this is legal and common in construction. Many subcontractors use percentage of completion for GAAP statements (required for banking, bonding, and surety review) and completed contract or cash basis for tax purposes (advantageous for tax timing in certain situations). Your CPA determines the optimal tax method. SPM ensures the GAAP financial statements use the correct method for your project profile.
Correct Revenue Recognition in ControlQore
SPM configures ControlQore and your chart of accounts to use the correct revenue recognition method for your business — percentage of completion for multi-month commercial projects — with the WIP accounts that make the balance sheet and WIP schedule reconcile correctly. Your tax return method is your CPA's decision. Your GAAP financial statements are SPM's responsibility.
Service Tiers
Tier 01
Core Financial
Starts at $1,900 / month
- ControlQore setup and management
- Job costing aligned to your estimate structure
- Cost-to-complete tracking — updated monthly
- Full-service bookkeeping — minimum 30 min/week
- Vendor payments via ACH (you approve, we initiate)
- Accounts receivable management
- Bank reconciliations and transaction matching
- Controllership
- 1 monthly CFO meeting
- 60-day onboarding — books migrated to last taxable year
Most Popular
Tier 02
Executive Financial
Starts at $2,900 / month
- Everything in Core Financial
- Monthly WIP schedule — delivered every month, standard
- 13-week cash flow forecasting
- CEO Report — monthly financial dashboard
- 3 CFO advisory meetings per month
- Strategic accountability and actionable to-dos
- Direct access to Josh Luebker
Pricing by Revenue
Revenue Range
(Last 12 Months) |
Core Financial
Monthly |
Executive Financial
Monthly |
| Under $1M | $1,900 | $2,900 |
| $1M – $3M | $2,600 | $3,600 |
| $4M – $6M | $3,800 | $5,500 |
| $7M – $9M | $5,100 | $6,900 |
| $10M – $12M | $6,100 | $8,500 |
| $13M+ | Quoted | Quoted |
Vetted Partner Network
National Lien Services
When AR gets too long, we connect you directly to our lien services partner to protect what you've earned.
Additional cost — not included in monthly fee
Payroll Integration Partners
Prevailing wage and regular payroll software partners integrated directly with ControlQore job costing.
Additional cost — not included in monthly fee
Bonding Partners
Surety relationships and bonding capacity support. We prepare the financials — our partners get you bonded.
Additional cost — not included in monthly fee
Lending Partners
Working capital lines and equipment financing through vetted lenders who understand construction.
Additional cost — not included in monthly fee
Reviewed Financials
CPA-level financial statement reviews for banking, bonding, and large contract requirements.
Additional cost — not included in monthly fee
CPA Coordination
We work alongside your existing CPA — not replacing them. Clean books and job costing make tax time easier.
Included — no extra cost
Common Questions
Straight answers.
Does the completed contract method affect bonding?
Yes — significantly. Sureties expect construction financial statements to be prepared on a percentage of completion basis with an accompanying WIP schedule. Completed contract financial statements for a contractor with active multi-month projects show no WIP, no earned revenue on active jobs, and an incomplete balance sheet picture. Sureties may question financial statements that don't reflect work in progress — which is a red flag regardless of whether the accounting is technically defensible.
Can I switch from completed contract to percentage of completion?
Yes — but the switch is a change in accounting method that requires IRS approval for tax purposes (Form 3115) and a disclosure in your financial statements. The year of the switch typically requires a catch-up adjustment that can create a significant taxable income spike. Coordinate the switch with your CPA well in advance — ideally at the start of a new tax year — to manage the transition properly.
What's included in Core Financial?
ControlQore setup, job costing aligned to your estimates, cost-to-complete tracking, full bookkeeping (minimum 30 min/week), ACH vendor payments (you approve, we initiate), AR management, bank reconciliations, transaction matching, controllership, and 1 monthly CFO meeting. Starts at $1,900/month.
What does Executive Financial add?
Everything in Core plus monthly WIP schedule, 13-week cash flow forecasting, CEO Report, and 3 CFO advisory meetings per month. Starts at $2,900/month. WIP, cash flow forecasting, and the CEO Report are Executive tier only.
Do you handle payroll?
No. We have vetted payroll software partners — including prevailing wage integrations — that connect directly with ControlQore. Those are separate engagements at additional cost.
How long does onboarding take?
60 days. We migrate your books to the start of your last taxable year, set up ControlQore, and build your job costing structure. Fully operational in two months.
What software do clients use?
ControlQore. All SPM clients run on ControlQore for job costing and WIP. We set it up and manage it — you don't have to learn it. Clients switching from QuickBooks, Sage, or other platforms migrate during onboarding.
Do you work alongside our CPA?
Yes. We work alongside your existing CPA — not replacing them. Clean books and accurate job costing make their job easier at tax time.
What happens when we grow past $12M?
We have a clear graduation path. We prepare your financials, systems, and team for the transition and connect you with the right firm for your next stage of growth.