Construction Accounting & CFO
You can build anything. But your books shouldn't require a hard hat.
Construction finance means job costing, WIP schedules, bonding packages, and retainage, not standard bookkeeping. Northstar runs the finance function for contractors so you can focus on building.
Construction finance is project-based, cash-flow dependent, and nothing like what your bookkeeper learned in school.
No idea if jobs make money.
Without real-time job costing or WIP analysis, you find out a project lost money after the crew has moved on. By then it is too late to fix.
Bonding company wants financials I can't produce.
They need WIP schedules, backlog reports, and CPA-reviewed statements your bookkeeper cannot build. Bonding capacity stays capped because of reporting, not work quality.
Change orders are killing my margins.
Jobs start at 18% margin and finish at 6% with no explanation. Without real-time change order tracking, margin erosion stays invisible until closeout.
Cash flow is feast or famine.
Retainage holds 10% of every job while progress billings lag actual costs. One slow-paying owner can put your entire operation under pressure.
What your finance team looks like with Northstar.
We deploy a dedicated finance pod that handles WIP schedules, percentage-of-completion accounting, and progress billing because it is all they do. Every construction engagement is built on Northstar's scalable team model, from Accounting Foundation through Financial Leadership.
Monthly close with job-level P&L
Books closed by the 15th with a P&L broken out by job so you see which projects make money while there is still time to act.
WIP reporting and percentage-of-completion
A monthly WIP schedule tracking costs to complete, billings to date, and over/under billing position on every active job.
AIA billing and draw management
We manage progress billing, track retainage, and reconcile draws against actual costs on every project.
Bonding-ready financial packages
Financial statements, WIP schedules, and backlog reports packaged to your surety's specifications each quarter.
Change order tracking and margin analysis
Every change order is captured, priced, and tracked against the original estimate with real-time margin impact.
Cash flow forecasting with retainage
Rolling 13-week forecasts that factor in retainage, draw schedules, sub payments, and materials procurement timing.
Equipment and fleet cost tracking
Equipment costs tracked by asset and allocated to jobs, with buy/lease/rent analysis based on actual utilization data.
Tax strategy for contractors
Construction-specific planning including accounting method elections, look-back calculations, and R&D credits for innovative building methods.
Construction is not one business. We know that.
A $50M commercial GC and a $3M remodeler have almost nothing in common financially. We have built specialized expertise across the verticals where we do our best work.
General Contractors
Multi-job portfolios with AIA billing, subcontractor coordination, bonding requirements, and progress-based cash flow.
Learn MoreHome Improvement & Remodeling
Remodelers and renovation contractors managing project-based accounting, deposit tracking, and the transition from owner-operator to scaled business.
Learn MoreDon't see your exact trade? We work with specialty subcontractors, land developers, and design-build firms too. Let's talk about your situation.
What this looks like in practice.
The Situation
A $12M commercial GC was managing 14 active jobs with no real-time visibility into project profitability. Their bonding company had flagged reporting quality concerns and threatened to reduce capacity.
What We Did
We rebuilt their chart of accounts around job-level tracking and implemented percentage-of-completion reporting, monthly WIP reconciliation, and real-time change order tracking within 90 days. We also uncovered a $480K over/under billing adjustment across five jobs.
The Result
Their bonding company renewed at full capacity after the first quarterly package. Job-level reporting revealed underperforming PMs, leading to training that improved margins by 4% across the portfolio.
We went from guessing on profitability to knowing it in real time. Our bonding company went from threatening to cut capacity to increasing it.
Construction Company Owner
Commercial General Contractor
Resources for construction business owners.
The Contractor's Guide to WIP Reporting
How to read a WIP schedule and why your bonding company cares about it.
ReadIs Your Construction Business Bonding-Ready?
The financial documents and metrics your surety evaluates before setting capacity.
ReadWhy Your Jobs Look Profitable But Your Bank Account Disagrees
Three common causes of the gap between job profitability and actual cash flow.
ReadCan You Afford to Hire a Project Manager?
A financial model for deciding when bringing on a project manager pays for itself.
ReadMaterials Cost Tracking System for Contractors
How to build a materials cost tracking system that prevents job-level margin leakage.
ReadHow to Price a Remodeling Job Without Leaving Money on the Table
A pricing framework that accounts for overhead, profit margin, and the hidden costs most remodelers miss.
ReadConstruction Cash Flow Forecasting Tool
Model cash flow across active jobs with retainage, draw schedules, and sub payment timing.
Try ItFractional CFO Services for Contractors
How a fractional CFO helps construction companies manage job profitability, bonding, and cash flow.
ReadOutsourced Accounting for Construction
A dedicated accounting team that handles job costing, WIP reporting, and percentage-of-completion accounting.
ReadTax Strategy for Contractors
Construction-specific tax planning including accounting method elections, R&D credits, and entity optimization.
ReadConstruction accounting questions we hear every week.
Work-in-progress (WIP) reporting compares the costs incurred on each job to the total estimated costs, then measures the percentage of completion against what you have billed. This calculation reveals whether you are over-billing or under-billing on each project, which directly affects your financial statements, bonding capacity, and tax liability.
Surety companies typically require a CPA-reviewed or audited balance sheet, income statement, cash flow statement, and a detailed WIP schedule. They want to see strong working capital, consistent profitability, and accurate job costing because your financial health directly determines your bonding capacity and the size of projects you can pursue.
Accurate job costing requires capturing every expense, including labor, materials, equipment, subcontractors, and allocated overhead, against specific project codes in real time. Most contractors lose margin visibility because costs hit the books weeks after they are incurred, so implementing a system that tracks committed costs alongside actual costs is essential for knowing your true project profitability.
The IRS generally requires contractors with average annual gross receipts exceeding $29 million to use the percentage-of-completion method for long-term contracts. Even below that threshold, many contractors switch voluntarily because it provides a more accurate picture of profitability by job and is required by sureties for larger bonding programs.
Retainage, typically 5% to 10% held back by the owner until project completion, creates a significant cash flow gap because you have already paid for the labor and materials but will not collect the full amount for months. A construction-focused CFO builds retainage tracking into your cash flow forecast so you can plan borrowing needs and avoid the cash crunches that catch most contractors off guard.
Take the First Step
Let's talk about your construction business.
Every engagement starts with a conversation about your project portfolio, bonding requirements, and biggest financial blind spots. If we are the right fit, we'll show you exactly how your finance team is configured for your business.
Or call us directly: 888.999.0280
Schedule a Construction Finance Consultation
Tell us about your business and we'll reach out within 24 hours.