Introduction to Construction Accounting

If you owned a home in the late 2000’s, you’re probably quite familiar with the housing crisis of 2008 where home values dipped dramatically, new construction came to a screeching halt, government bailouts followed, and foreclosures were aplenty. At that time, it probably didn’t seem like the economy or construction industry would ever recover, but in recent years, it has done just that.

US Bureau of Labor Statistics show that as of October 2022, there were $7.73M people working in the construction industry. In addition, data from the Association of General Contractors of America shows that the construction industry has more than 750,000 employers in the US and creates nearly $1.4 trillion worth of structures each year.

With the continued resurgence of this industry, understanding how to do the accounting for these companies will be an invaluable skill. Therefore, this course will introduce the basic concepts surrounding construction accounting needed to do just that. We’ll cover a variety of topics aimed at familiarizing you with how to properly understand construction accounting. Through the definition of useful terms and using relevant examples, we’ll examine everything from paying subcontractors and billing clients to recognizing revenue and understanding project profitability.

Course Key Concepts: Construction Accounting, Project Accounting, Subcontractor, Prime Contractor, Work in Process.