I am in the construction business. Wondering if the following warrants using progress billing or normal billing. I take 50% before the job as a deposit and the remaining 50% at completion. Suggestions?
Also, I need a recommendation about income accounts. I was thinking of using the Construction income account for roofing, siding and windows, just changing the description field depending on the job. Bad idea? Should I make a seperate income account for each type of contruction I do?
Thanks BG
The 50% you receive up front isn't income until it is earned. It really should be coded to a liability account called something like "Customer Deposits".
When you are 50% finished with the job, it then becomes income.
Your account choices for income depend upon how much information you want about your business. If you want to see various types of income on a report after one or two years, now is the time to decide how many accounts to use to distinguish those areas of income.
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