COMPLETED CONTRACT METHOD.
For most commercial subcontractors running multi-month projects, percentage of completion is the required GAAP method. Completed contract still applies in specific situations, and it carries tax consequences worth understanding before you default into it. It fits short-duration work, jobs where the outcome can't be reliably estimated, and contractors who qualify as small under IRS rules and have elected the method for tax purposes.
The trap is defaulting into it because it's easier. No WIP schedule, no percent complete math, and no earned revenue tracking is a genuine saving on the bookkeeping side, which is why small subs pick it. The cost turns up in your own reporting. A business with active work under way reports nothing on those jobs until they close, so the monthly statements can't tell you whether the company is making money. Bankers and sureties reading those statements see a contractor with no visible work in progress, which raises a question the accounting itself can't answer.
WHAT IT MEANS.
The completed contract method is a revenue recognition approach that records all revenue and expense on a project when it reaches substantial completion rather than as the work progresses.
Your tax return and your GAAP financial statements are allowed to use two different revenue recognition methods, and in construction that's both legal and common. Owners hear that and assume somebody made a mistake. It's a deliberate split: the statements are built for the bank and the surety, and the return is built for the tax code, and the two audiences want different things.
WHERE THE EASY METHOD COSTS YOU.
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, and no earned revenue tracking. But for a commercial subcontractor running projects longer than a few weeks, completed contract produces financial statements that don't reflect how the business is performing, and it may not be GAAP-compliant for your contract size. The saving on the bookkeeping side costs you the ability to read your own month.
Your P&L is lumpy and doesn't reflect work in progress
Under completed contract your P&L shows nothing on active projects, because all revenue and expense recognition waits for completion. That makes monthly financial statements close to useless for running the business. A company with $3M of active work in progress reports no revenue on those jobs until they close, and the bankers and sureties reading those statements see a distorted picture of the company.
You don't know the tax difference between the two methods
For tax purposes, small contractors, generally those under $30M average annual gross receipts, have more flexibility in revenue recognition method than large contractors do. The completed contract method can be advantageous for tax in certain situations, but it requires coordination with your CPA and consistent application year over year. The tax method and the GAAP method are allowed to differ, and most owners have never been told that.
WHAT IT LOOKS LIKE IN DOLLARS.
That's roughly where the IRS small contractor line sits, stated as average annual gross receipts. Below it, a contractor has more flexibility in revenue recognition method for tax purposes than a large contractor does. That flexibility is what makes the tax method a real conversation with your CPA rather than something the GAAP method decides on its own.
THE RIGHT METHOD FOR THE RIGHT PURPOSE.
Completed contract fits when projects are short-duration, meaning under 12 months, when the outcome can't be reliably estimated, or when you qualify as a small contractor under IRS rules and have elected the method for tax purposes. For most commercial subcontractors with projects running over 30 to 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.
Your tax return and your GAAP financial statements can use different revenue recognition methods, and in construction that's both legal and common. Many subcontractors use percentage of completion for the GAAP statements, which is what banking, bonding, and surety review require, and completed contract or cash basis for tax, where the timing can work in their favor. Your CPA decides the tax method. SPM makes sure the GAAP statements use the correct method for your project profile.
SPM configures ControlQore and the chart of accounts to use the right revenue recognition method for the business, which for multi-month commercial projects means percentage of completion, with the WIP accounts that make the balance sheet and the WIP schedule reconcile to each other. Your tax return method stays your CPA's decision. Your GAAP financial statements are SPM's responsibility, and keeping that line clear is what stops the two from being argued about at year end.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
FREQUENTLY ASKED.
