Revenue Recognition · Percentage of Completion · Completed Contract · Construction Accounting
Revenue Recognition · Percentage of Completion · Completed Contract · Construction Accounting
Construction Revenue
Recognition.
How you recognize revenue affects your P&L, your taxes, your WIP schedule, and how banks and sureties evaluate your financial health. Most construction subcontractors don't choose their revenue recognition method deliberately — it gets set during bookkeeping setup and rarely revisited. Here is what each method means and how to know which one is right for your business.
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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
Your Revenue Doesn't Reflect the Work You've Actually Done
If you're using completed contract method, your P&L shows no revenue until a job is done — even if you've completed 80% of a 12-month project. Your books look flat while the work is happening and then spike at closeout. This makes financial management, bonding presentations, and banking conversations difficult.
02
You Don't Know Which Method You're Using
Most subcontractors have no idea whether their books are on percentage of completion, completed contract, or something in between. If you don't know, your revenue recognition is probably wrong for your business type — and your financial statements don't accurately reflect your financial position.
03
Tax and GAAP Treatment Are Different
Your tax return may use a different revenue recognition method than your GAAP financial statements — and both may be different from how your WIP schedule calculates earned revenue. When these three don't align, financial statements confuse bankers and sureties, WIP reconciliations don't work, and your CPA has a cleanup project every year.
How SPM Fixes It
Percentage of Completion — How It Works
Under percentage of completion, revenue is recognized proportionally as work is completed. If a $500K job is 60% complete, $300K of revenue is recognized — regardless of what's been billed. This method produces financial statements that reflect work actually performed and is required for GAAP compliance on most commercial subcontracts. It's also what WIP reporting is built on — earned revenue equals contract value times percent complete.
Completed Contract — When It Applies
Under completed contract, no revenue is recognized until the project is substantially complete. This method is simpler but produces lumpy revenue recognition that doesn't reflect ongoing work. It's primarily used by smaller contractors with shorter-duration projects where the completed contract method produces results not materially different from percentage of completion. Most commercial subcontractors doing multi-month projects should be on percentage of completion.
Revenue Recognition Built Into ControlQore
SPM configures ControlQore and your books to use the correct revenue recognition method for your business type — percentage of completion for most commercial subcontractors — and maintains WIP accounts that reconcile to your financial statements. Your P&L reflects work performed. Your balance sheet balances. Your CPA and surety see a financial picture that makes sense.
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 revenue recognition method affect my taxes?
Yes — significantly. Tax law has specific rules about which revenue recognition methods are allowed for contractors of different sizes and project types. The look-back method and the percentage of completion method for tax purposes have specific requirements. This is a conversation for your CPA — SPM ensures your books support whatever tax method your CPA recommends.
What is the connection between revenue recognition and WIP?
WIP reporting is the practical application of percentage of completion revenue recognition. The WIP schedule calculates earned revenue by multiplying contract value times percent complete — which is exactly what percentage of completion accounting does. Without percentage of completion revenue recognition in your books, your WIP schedule and your P&L will never reconcile.
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.