SELF-ASSESSMENT: ACCOUNTING SYSTEM

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Weight

Weight

Accounting Foundation & Software Setup

Chart of Accounts Structure

We use basic accounting software, set up generically with no construction focus.

Chart of Accounts is messy or inherited from a prior business or bookkeeper.

We use accounting software, but job costing and reports don’t match how we run projects.

Accounts exist, but income, COGS, and overhead are mixed or unclear.

Accounting software is configured for construction; Chart of Accounts is mostly correct.

Chart of Accounts follows construction best practices but needs cleanup.

Accounting system supports job costing, WIP, and project tracking with minor gaps.

Chart of Accounts aligns with how we estimate and manage projects.

Accounting platform is fully configured for construction and supports decision-making.

Chart of Accounts is standardized, intentional, and supports financial analysis.

Cost Codes & Job Costing

Project Setup & Job Structure

No cost codes; expenses are tracked only at a high level.

Projects are created inconsistently or not at all in accounting.

Some cost codes exist, but they’re inconsistently used.

Projects exist, but costs and income are often posted incorrectly.

Cost codes exist and are used, but estimates don’t always match actuals.

Projects are set up consistently with basic controls.

Cost codes align with estimating, job costing, and reporting.

Each project has budgets, cost codes, and tracking in place.

Cost codes are standardized, audited, and drive profitability analysis.

Project setup supports forecasting, WIP, and margin management.

Work-In-Progress (WIP) & Revenue Recognition

Billing, Invoicing & Customer Deposits

We don’t track WIP or understand revenue recognition.

Invoicing is inconsistent; deposits are not tracked properly.

We attempt WIP but don’t trust the numbers.

We invoice regularly but struggle with retainage and deposits.

WIP is calculated periodically with help from our accountant.

Billing is mostly accurate, but reporting is confusing.

WIP is reviewed monthly and tied to financial statements.

Billing, deposits, and retainage are tracked correctly.

WIP is accurate, timely, and drives cash and profit decisions.

Billing systems align cleanly with contracts and financials.

Change Orders & Cost Control

Financial Reporting & Monthly Close

Change Orders are informal and often missed financially.

Financial reports are late, inaccurate, or ignored.

Change Orders exist but aren’t tracked in accounting.

We review reports, but don’t trust or understand them.

Change Orders are tracked but not consistently tied to job cost.

Financial reports are mostly accurate but lack job-level clarity.

Change Orders are integrated into budgets and reports.

Monthly close process exists with reliable reports.

Change Orders are fully controlled and analyzed for margin impact.

Financial reports drive weekly and monthly decisions.

Cash Flow Visibility

Roles, Responsibility & Oversight

Cash flow surprises are common.

No one clearly owns accounting accuracy.

We look at bank balances but not projections.

Bookkeeper handles entries; owner reviews occasionally.

Cash flow is reviewed monthly with limited forecasting.

Roles are defined but accountability is loose.

Cash flow is forecasted and reviewed regularly.

Clear responsibility for accuracy and review exists.

Cash flow planning is proactive and strategic.

Accounting oversight is disciplined and documented.

Integration with Estimating & Operations

Overall Accounting System Maturity

Accounting is completely disconnected from estimating.

Accounting system is a liability.

Some alignment exists, but reports don’t match expectations.

Accounting system exists but limits growth.

Estimating and accounting are partially aligned.

Accounting system supports operations with effort.

Estimates drive job budgets and tracking.

Accounting system supports management decisions.

Accounting, estimating, and operations are fully integrated.

Accounting system is a competitive advantage.