Bookkeepers usually keep the day-to-day accounting records current. Controllers usually own the close, review, controls, and reporting process. In construction, both functions need to connect transactions to the jobs and the financial statements.
The titles don't tell you everything. An experienced bookkeeper may handle billing, reconciliations, and parts of the monthly close or WIP. A controller may also do hands-on accounting. When deciding what your company needs, start with the responsibilities and the person's ability to carry them out.
What a construction bookkeeper typically handles
The bookkeeping function records what happened and keeps the supporting records organized. Common responsibilities include:
- Entering vendor and subcontractor invoices with the correct job and cost coding.
- Recording customer billings, payments, and retainage balances.
- Maintaining payables and receivables, following up on missing information, and processing approved payments.
- Recording payroll entries or processing payroll when that work is assigned and supported.
- Reconciling bank and credit card accounts and preparing routine accounting reports.
A good bookkeeper also notices exceptions. An invoice with no job number, a duplicate charge, or a payment that doesn't match the records needs attention. Agree on what the bookkeeper can resolve and what needs another person's review.
If payroll is part of the role, confirm the training and processes needed for your work. Union reporting depends on the applicable agreements, and certified payroll applies to covered contracts. These responsibilities shouldn't be assigned just because payroll appears on a bookkeeping job description.
What a construction controller typically owns
A construction controller is usually responsible for the accounting process and the quality of the resulting reports. That includes deciding what needs review, getting it completed, and resolving the questions that affect the numbers.
- Managing the monthly close and reviewing reconciliations, cutoff entries, and supporting schedules.
- Overseeing job-cost reporting and WIP preparation, including the accounting policies used.
- Reviewing changes in expected job profit and explaining material differences to management.
- Establishing approval and review controls and coordinating the accounting team's work.
- Coordinating reporting, tax, payroll, lender, and surety requirements with the appropriate people and advisers.
Project managers and estimators supply the job budgets and current estimates of work remaining. The controller reviews and challenges those inputs, reconciles them to the records, and incorporates them into the reporting. Accounting can't produce a dependable forecast without information from the people managing the work.
Controllers may also prepare cash forecasts and help evaluate equipment purchases or other business decisions. The scope varies. If you need broader financing or growth advice, define that work separately, including whether CFO support is needed.
How the work connects during the monthly close
Take a subcontractor invoice. The bookkeeper records it against the correct job and cost code, checks the supporting information, and flags discrepancies. The controller's review looks at whether the job costs are complete through the cutoff and whether the forecast accounts for the work still to come.
For WIP preparation, the team needs current contract information, costs, billings, and job forecasts. Earned revenue and billings are compared on a consistent basis; cash collections are tracked separately. An overbilling doesn't tell you that the customer has paid.
These tasks can overlap, but the handoff and review need an owner. Missing invoices, miscoded costs, and stale forecasts are bookkeeping and reporting problems that can affect the entire job report. Assign responsibility for finding and correcting them before the reports are issued.
Decide what your team needs
Look at the workload, project complexity, deadlines, and skills already available. A company with few transactions may still need experienced oversight if its contracts and reporting are complex. A busier company may need more bookkeeping capacity even when its controller is capable.
Ask where the work is falling behind. Are invoices and timecards waiting to be entered? Do reconciliations go unfinished? Are reports delivered without review? Does anyone own the WIP and follow up with project managers about cost forecasts?
The answer may be training, additional bookkeeping help, controller support, or a combination. One person may cover several responsibilities. You can also use part-time or outside support. Keep the review and approval responsibilities clear when duties are combined.
When hiring, evaluate the actual work rather than relying on the title. Our guide to what to look for in a construction controller can help you assess the experience and judgment required.
Give the team a workable process
Document who does the work, who supplies the information, who reviews it, and when it's due. The schedule should include accounting tasks and the updates needed from project management.
Construction accounting software can support that process, depending on its features and setup. It still needs correct coding, complete records, and reviewed forecasts. A report coming out of the system doesn't establish that those inputs are right.
Get the accounting support your team needs
Levvigo helps contractors with job costing, WIP preparation, financial reporting, accounting processes, and team training. We can help you work through the gaps between daily bookkeeping and the reports management needs. Learn more about our outsourced construction accounting.
Book a call with Levvigo to discuss your accounting workload and where your team needs support.
