Certified Payroll
What Is Certified Payroll (Form WH-347)? Certified payroll is a weekly payroll report submitted to the contracting agency by contractors and subcontractors working on prevailing wage projects. The standard form is WH-347, published by the Department of Labor. The form certifies that all workers were paid at least the applicable prevailing wage rates for each […]
Prevailing Wage
Prevailing Wage refers to the minimum wage rate that must be paid to workers on public construction projects funded by government contracts. These rates are determined by government agencies and are meant to ensure that workers are paid fairly according to local labor standards. Prevailing wages often include wages for different job classifications, such as […]
Overhead Allocation
Overhead Allocation refers to the process of distributing indirect costs, also known as overhead, across various departments, projects, or products within a business. Overhead costs are expenses that cannot be directly traced to a specific product or service, such as rent, utilities, administrative salaries, and office supplies. The goal of overhead allocation is to assign […]
Completed Contract Method
The Completed Contract Method (CCM) is a revenue recognition method used in construction and long-term contracts. Unlike the Percentage of Completion Method, which recognizes revenue as work progresses, the Completed Contract Method defers all revenue recognition until the project is fully completed. Under this method, no revenue or expenses are recognized until the contract is […]
Percentage of Completion Method
The Percentage of Completion Method (PCM) is a revenue recognition technique used primarily in long-term contracts, such as construction, engineering, or software development. Under this method, revenue is recognized based on the percentage of work completed during the reporting period, rather than waiting until the project is finished. This approach allows companies to recognize income […]
Retainage
Retainage is a portion of a contractor’s payment withheld by the project owner or client until the project or specific project milestones are completed. Typically, retainage is between 5% and 10% of the total contract value. It serves as a financial incentive for contractors to complete the work to the client’s satisfaction and adhere to […]
Work in Progress (WIP)
Work in Progress (WIP) refers to the total value of unfinished goods or projects in a production or service process. In construction, manufacturing, or project-based industries, WIP includes all the materials, labor, and overhead costs that have been incurred for a project that has not yet been completed or billed to the customer. Essentially, WIP […]
Job Costing
Job Costing is a critical accounting method used by businesses, especially in industries like construction, manufacturing, and other service-based sectors. It involves tracking and allocating all costs associated with a specific job or project to understand the financial health and profitability of each individual task or project. This includes both direct costs (such as materials […]