Question 1

What is a WIP schedule in construction accounting?

Accepted Answer

A work-in-progress schedule reports, for every open job, the contract value, costs to date, estimated cost to complete, percent complete, revenue earned, amounts billed, and the resulting over- or under-billing. Banks and sureties read it before they extend credit, which is why it can't be a quarterly reconstruction. Aleq keeps the WIP schedule live off the ledger: job costs post as bills clear, percent complete derives from posted costs, and earned versus billed is current every day — not rebuilt in Excel at month-end.

Question 2

How does percentage-of-completion accounting work for contractors?

Accepted Answer

Under ASC 606, most construction contracts recognize revenue over time, commonly on a cost-to-cost measure: costs incurred to date divided by total estimated cost. A job with a $3,000,000 budget and $1,860,000 of posted costs is 62% complete, so a $4,200,000 contract has earned $2,604,000 regardless of what's been billed. Aleq computes this from posted job costs and books the revenue each period. The cost budget itself — the denominator — stays your team's estimate, because revising it moves revenue.

Question 3

What does over-billed and under-billed mean?

Accepted Answer

Billings rarely match earned revenue in a given month. Billed ahead of the work, the excess is a contract liability (billings in excess of costs and estimated earnings); behind it, a contract asset (costs and estimated earnings in excess of billings). Both belong on the balance sheet per job, and sureties read them as a health signal. Aleq books the over- or under-billing automatically for each job as revenue is earned and invoices post, so the WIP schedule ties to the balance sheet by construction.

Question 4

How do change orders affect revenue recognition?

Accepted Answer

A change order is a contract modification under ASC 606. If it adds distinct work at a standalone price it's a separate contract; otherwise the transaction price updates and the revenue schedule re-derives from the modification date — prospectively, without restating prior periods. Aleq treats an approved change order exactly that way: it drafts the treatment, re-derives the schedule, and holds it for your sign-off, so scope growth flows into revenue instead of sitting in a side spreadsheet.

Question 5

What is retainage and how should it be tracked?

Accepted Answer

Retainage is the 5–10% an owner withholds from each progress payment until the work is accepted. It's real receivable — often the job's entire margin — but it isn't collectible on normal terms, so it belongs in its own account per contract, not buried in AR aging. Aleq carries retainage receivable per job as billings post, so the balance you're owed at completion is visible all along, and the same logic applies to retainage you withhold from subs.

Question 6

What is the best construction accounting software?

Accepted Answer

Field-operations tools like Procore and Buildertrend run the job site but aren't the books; generic ledgers like QuickBooks hold the books but lose the job. Purpose-built construction ERPs exist, and your team operates them. Aleq is a different shape: the ledger itself does the accounting — job costs post as bills three-way match, percent-complete revenue derives from posted costs under ASC 606, change orders re-derive the schedule, and the WIP report is a live view instead of a month-end project. It connects read-only and is live in 48 hours.

Every job costed. Revenue that matches the work.

The job knows its costs. The books find out at month-end.

One job, month three — earned, billed, and tied.

The books for construction, run for you.

The whole job, on the books.

It speaks your accounting natively.

Questions, answered.

Still building the WIP schedule by hand?