How to Maintain Accounts of Construction Company?

 I start a construction company and want to maintain its accounts properly. - Asked by Bahzad Gill

Answer by Me : If you have started your construction company, you need to maintain its accounts. There are lots of benefit. One of big benefit to calculate the value of your constructed property. So, you can sell it on profit margin. Second, you can show your total expenses if you have to get money from govt. or construction service to other company. 

So, start to learn maintain accounts of construction company

1. Do Project Based Accounting

If you have lots construction projects, you have to maintain each project accounts differently.

Suppose

You have the project of making dam

You have the project of road

You have the project of making 20 floor building construction

Now, here are three construction projects

If you are using accounting software

Open 3 companies in the form of project. That will help accurate record of each project's income and expenses and receipt and payments

Remember, keep each bank account different

Download : Project Management eBook

2. Manage Payroll

Manage payroll is big challenge in construction company

Make the list and details of each labourers and employees.

Record their salary, wage or any benefits which you gives your employee in different project seperately. 

3. Keep Day book

In your accounting software, you have to pass daily voucher entries. 

Voucher entries of credit purchase

Voucher entries of credit sales

Voucher entries of expenses

Voucher entries of incomes

Voucher entries of payments

Voucher entries of receipt

Voucher entries of transfer to bank or widthraw from bank 

4. Calculate the Tax on Net Profit 

If you have to pay the income tax, you have to see accounting software's income statement which have become automatically by your daily passing of transactions and payroll management. Check your net profit and calculate the tax on your net profit and transfer to your income tax department without any delay. 

Read Also

1. How to Prepare Construction Accounts from Incomplete Records