Closing Time: What Contractors Need to Know About Month- and Year-End Close

7/15/2026 - By Suzanne Bach, CPA, Stacie Gaffrey, CPA & Jen Hogan, CPA

Saltmarsh construction accounting professionals Suzanne Bach, CPA, Stacie Gaffrey, CPA, and Jen Hogan, CPA recently hosted a live webinar on the month- and year-end close process for construction companies. Here's a recap of what was covered.

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Everything Is Fine Until It Isn't

Mike Tyson has a saying: everyone has a plan until they get punched in the face. Suzanne thinks about that a lot when she talks to contractors about their books.

Accounting is easy to deprioritize when things are humming along. You're out running jobs, managing crews, chasing the next bid. The bookkeeping is getting done — sort of — and nobody's knocking on your door about it.

Then the bonding company calls. They want reviewed financials. Or the bank won't extend your line of credit until you hand over current statements. Or you need to close on a piece of equipment fast and your tax returns are two years behind.

That's when accounting stops being background noise and becomes a five-alarm fire. Saltmarsh gets those calls regularly. And while our team can usually move fast, sometimes the window has already closed — a job gets awarded to someone else, a credit increase gets denied, a bond doesn't come through in time.

Almost all of it is preventable.

Why Construction Closes Are More Complicated Than Most

In a lot of industries, closing the books is relatively straightforward. In construction, you're dealing with the percentage-of-completion method, job costing, overhead allocation, WIP reporting, overbillings, underbillings, and more unique considerations. Every one of those depends on accurate, current information from the field.

That's the part people underestimate. Your accounting team can't close the month alone. Project managers need to submit updated completion percentages. Change orders need to make it into the system. Field crews need to communicate what's actually done versus what's contracted.

When that coordination breaks down, the numbers don't reflect reality. And decisions made off inaccurate numbers, on cash, bids, staffing, and other issues central to your business, have a way of compounding quietly.

What the Saltmarsh Team Usually Finds With New Clients

Jen was candid during the webinar: most new clients that we engage with at Saltmarsh have gotten a little behind on their books. Sometimes a lot behind.

Here's what the team typically walks into:

  • AR tracked in someone's head. Suzanne has had contractors tell her they know who owes them money because they remember. "That's a lot to carry around," she said — and a real vulnerability if anything changes.
  • Bills recorded only when cash goes out, not when the expense is incurred. The P&L is almost never accurate, and at year-end, missing accruals can have direct tax consequences.
  • Loan balances on the balance sheet for equipment paid off over a year ago — because payments were coded to an expense account instead of reducing the liability.
  • A WIP schedule the owner keeps meticulously that has never been reconciled to the P&L or balance sheet. The two worlds just exist in parallel.

None of this is unusual. Most of the time, someone was wearing a lot of hats and accounting got the back burner. The question is what it's costing.

What Lenders and Sureties Actually See

Beyond the operational headaches, here's what an experienced reviewer spots when they open disorganized financials:

  • Asset accounts with negative balances — an immediate signal that nobody reconciled this account.
  • Line-of-credit balances that don't match the bank's records.
  • AR over 90 days, which often gets discounted to 70 cents on the dollar because collectability is in question.
  • No over/under billing entries anywhere on the balance sheet — a clear tell that the WIP hasn't been closed properly.

"Within two minutes of glancing at a statement, they can say, 'okay, this hasn't been reconciled,'" Suzanne noted. And once doubt creeps in about one line item, reviewers start questioning everything else.

Close Prep Starts Before the Month Ends

One of the most practical things Jen shared: don't wait until the first of the month to start pulling the close together.

Before the month ends, someone should be:

  • Chasing down vendor invoices expected but not yet received.
  • Confirming updated completion estimates with project managers.
  • Ensuring all approved change orders are in the system and contract values are current.
  • Accruing expenses that are known, even without a bill in hand.

On that last point — Suzanne hears "I didn't get the bill yet" constantly. But if you know $100,000 subcontractor invoice is coming, it belongs on the books. At year-end, whether an expense is accrued or paid has direct tax implications.

As Suzanne put it: it takes a lot longer to reconcile the January bank statement in August than it does to reconcile the August bank statement in September.

The WIP Schedule: Where Things Get Interesting

The WIP schedule section of the webinar could have been its own hour. This is the area that trips up even contractors who think they're on top of things.

A scenario Suzanne described: a client arrives with a beautifully maintained WIP schedule — they know exactly what's happening in the field. Then the team sits down to reconcile it to the P&L and it's off. Sometimes a little. Sometimes a lot. She's seen cases where job costs on the WIP totaled $1 million, but cost of sales on the P&L showed $8 million. That’s seven million dollars unaccounted for.

That gap builds quietly over months when no one is doing a monthly reconciliation. Going back to fix 12 months of misallocated costs is a painful, time-consuming project. Saltmarsh has clients in the middle of that right now.

The most common WIP pitfalls:

  • Change orders that made it to the field but never got entered into the system — contract values are understated and revenue recognition is off.
  • Overhead not being allocated to jobs at all. Under GAAP, if a contractor has reviewed or audited financials, overhead allocation is required — and sureties know to look for it.
  • No over/under billing entries. If a surety opens the balance sheet and those entries are absent, they already know the WIP hasn't been closed properly.

When Is It Time to Call Someone?

One of the best audience questions: how do you know when DIY accounting has run its course?

Suzanne's answer was direct: you know — the same way you know when a home repair is above your skill level. The signals are usually obvious: multiple months behind on reconciliations, uncertainty about whether things are recorded correctly, or growth that's starting to require credit lines and bonding capacity.

A question came in specifically about external bookkeepers at the $10 million revenue mark. Suzanne's take: a general bookkeeper can often manage a smaller operation, but at that size, companies are dealing with bonding capacity increases, more complex job costing, and lender covenant requirements. That's when a generalist starts to get expensive in ways that aren't immediately visible.

A quick gut check if you're unsure whether your bookkeeper knows construction: ask them how they allocate overhead. If the answer is "we don't do that" — it's worth a conversation.

Saltmarsh Works on This Every Day

Suzanne, Stacie, Jen, and the broader Saltmarsh construction accounting team work hands-on with commercial contractors and subcontractors across Florida and the Southeast — monthly close, WIP reporting, job costing, fractional CFO services.

If your books are behind, your WIP isn't reconciling, or you're heading into a growth phase where the financial stakes are higher, reach out. The team is happy to take a look and tell you honestly where things stand.

Get in Touch with the Saltmarsh Construction Team

About the Authors 

Suzanne Bach, CPA, CIT | Suzanne is a partner in the tax, accounting, and advisory services, where she leads the compliance and advisory services, including specialty groups of SALT, M&A, Trust & Estate, and CAS. She began her career in public accounting in 2003, with a focus on tax and consulting. Suzanne is passionate about helping clients navigate the challenges of growth and compliance while supporting their long-term success. 

Jen Hogan, CPA | Jen is a director and Fractional CFO, who brings the perspective of a seasoned CFO in the Outsourced Accounting Services practice at Saltmarsh. She brings a comprehensive perspective blending operations across accounting, advisory, and finance functions, including executive-level strategy. She partners closely with clients to translate financial data into actionable insight, strengthen financial infrastructure, and support confident decision-making around growth, profitability, and risk.

Stacie Gaffrey, CPA | Stacie is a supervisor in the Audit & Assurance Services practice of Saltmarsh. Her primary area of expertise is construction accounting, where she has established herself as a trusted advisor to many clients. She is passionate about supporting the construction industry and takes pride in helping companies build a solid financial foundation through accurate and reliable financial statements.

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