How Percentage of Completion Accounting Gives Contractors a Real Edge

In construction, numbers drive decisions. Profit margins are tight, projects are complex, and cash flow can make or break a business. That’s why accurate accounting isn’t optional — it’s essential. Unfortunately, many contractors still rely on outdated accounting processes that only provide a partial picture of financial performance. By the time traditional month-end reports are run, the opportunity to timely adjust course has passed.

This is where comprehensive percentage of completion (PoC) reporting gives contractors a true competitive edge.

What Is Percentage of Completion Accounting?

Percentage of completion accounting is a method of recognizing revenue and expenses based on the actual progress of a project, rather than waiting until the job is fully complete. Instead of deferring recognition or relying on lump-sum milestones, PoC matches revenue to the work performed in real time. 

For construction companies, this means:

• Revenue is recognized proportionally to costs incurred or work completed.

• Financial statements always reflect the most accurate status of a project.

• Cash flow, job profitability, and backlog health are visible as projects unfold.

In short, PoC turns accounting into a live snapshot rather than a rearview mirror.

Why Traditional Accounting Holds Contractors Back

Many contractors rely on systems that only generate work-in-process (WIP) reporting rather than a full summary of contracts that ties to the income statement. The WIP process methods creates blind spots:

• Delayed insights: A partial picture does not adequately prove project performance. 

• Cash flow surprises: Without a full summary of contracts and real-time updates, companies risk drawing incorrect conclusions. 

• Limited decision-making: Management operates without clear financial visibility. 

The result? Cost overruns go unchecked, opportunities to make adjustments and/or reallocate resources are missed, and bad information can impact bidding on future work.

The TimeSuite Difference: PoC Built into the Core

With most construction ERPs,  PoC is an afterthought. The mechanics are not fully baked into their cores, and the process does not lend to focusing on the quality of the information that drives projections by phase/cost code. TimeSuite takes a different approach.

With TimeSuite’s relational ERP, percentage of completion accounting is embedded into the very architecture of the system. That means:

• Automatic updates – As change orders, commitments, costs, timecard hours, and billings are entered, project financial information refresh instantly.

• Single-source data – Budgets, contracts, change orders, and invoices all live in one relational database. Data is not posted between siloed modules.

• Seamless reporting – Management can view real-time job phase/cost code commitment balances, costs, and projections , profitability reports, and cash flow projections without waiting for month end.

• Automated Accruals - Accrued Wages and Over/Under Billings accruals are automated. No shortcuts! 

• “Over/under Allocated Indirect Costs” are proven and clearly presented.

There’s no need for exports, imports, or manual reconciliation—everything is connected from day one.

The Business Impact of Real-Time PoC

Adopting real-time percentage of completion accounting doesn’t just improve accounting efficiency. It directly impacts a contractor’s bottom line:

• Improved forecasting – Identify trends and potential overruns before they spiral out of control.

• Better resource allocation – Shift labor and equipment based on accurate project health data.

• Reduced financial risk – Minimize surprises with proactive visibility into costs and revenue. 

• Stronger client relationships – Provide transparent, timely reporting to project owners.

The result is simple but powerful: contractors make smarter decisions, reduce risk, and consistently improve profitability.

Why Contractors Can’t Afford to Wait 

The construction industry is becoming more competitive and data-driven every year. Contractors who continue relying on outdated, after the fact accounting will always lag behind those who have real-time visibility. Percentage of completion accounting isn’t just an accounting method—it’s a strategic advantage.

With TimeSuite’s relational ERP, contractors don’t have to struggle with complex integrations or manual workarounds. They get a system designed from the ground up for construction accounting, project management, and operational visibility. 

If you want to see where your projects stand today—not 30 days from now—real-time thorough percentage of completion accounting is the key. And with TimeSuite, it’s already built in. Reach out today to get a no-obligation software demo.