Professional Accounting for Building Construction Contractors
Manage progressive revenue, project costs, retention, and WIP with accurate accounting systems per PSAK 72. Precise project financial reports for business decision-making.
Compliance Warning
This industry is considered high risk and may receive closer attention from tax authorities. Professional tax consultation is strongly recommended.
Common Challenges
Revenue Recognition Over Time
Building construction revenue must be recognized proportionally as the project progresses, not when invoices are issued or payments received. Miscalculating percentage of completion can produce misleading financial reports.
Cost Tracking per WBS
Material, labor, subcontractor, and overhead costs must be allocated to each work breakdown structure so per-item work margins can be monitored in real-time.
Overbilling and Underbilling
The difference between progress billing value and recognized revenue creates contract positions (contract assets/liabilities) that must be properly reflected in financial reports.
Retention and Project Receivables
Retention value (5-10% of contract) is held during the maintenance period and only paid after a certain time, creating long-term receivables that need proper recognition.
Our Solutions
Cost-to-Cost Revenue Recognition
Implementing the cost-to-cost method to calculate percentage of completion based on actual costs vs estimated total project costs per PSAK 72.
- Revenue accurate to progress
- Consistent with accounting standards
- Easier audit
Work Breakdown Structure Accounting
Per-WBS cost structure enabling detailed margin tracking per work item (foundation, structure, MEP, finishing).
- Clear profit per work item
- Overcost area identification
- Better project planning
Contract Position Monitoring
Real-time dashboard for monitoring contract position: overbilling vs underbilling, outstanding retention, and project cash flow.
- Transparent project financial position
- Proactive cash flow
- Preventing hidden losses
Related Tax Regulations
PSAK 72
Revenue from Contracts with Customers
Construction revenue recognition based on transfer of control over services to customers progressively.
SAK EP
Private Entity Accounting Standards
Reporting framework for medium-scale construction companies without public accountability.
PSAK 36
Leases
Right-of-use asset recording for heavy equipment and project facilities.
Need Help with Building Construction Accounting?
Consult your bookkeeping and tax needs with our professional team. Free initial consultation.
Free Consultation via WhatsAppBuilding Construction Accounting Consulting Services Across Indonesia
We support clients in major Indonesian cities. Find a location-specific service page for your area.
Bali
Banten
Daerah Istimewa Yogyakarta
Jawa Tengah
Jawa Timur
Kalimantan Barat
Kalimantan Selatan
Kalimantan Timur
Kepulauan Riau
Riau
Sulawesi Selatan
Sulawesi Tengah
Sulawesi Tenggara
Sulawesi Utara
Sumatera Utara
Sumatra Selatan
Frequently Asked Questions
How to calculate building construction percentage of completion?
Percentage of completion is calculated by dividing actual costs incurred by estimated total project costs (cost-to-cost method). Actual costs include materials, direct labor, and subcontractor costs already recorded.
What is the impact of overbilling on financial reports?
Overbilling (billing exceeding recognized revenue) is recorded as a contract liability on the balance sheet. This indicates the company has received payment for work not yet fully recognized as revenue.
How to record retention in project accounting?
Retention is recorded as retention receivable (part of accounts receivable) and recognized in parallel with project revenue. However, realization occurs only after the maintenance period ends and all contract obligations are fulfilled.
How do accounting services improve operating cost efficiency?
Accurate, timely financial reports help you spot cost leakage, monitor margins by product or service, and make data-based decisions.
Can financial reports be accessed in real time?
Yes. We use cloud accounting systems so you can monitor cash flow, profit and loss, and business performance from anywhere.
How do you ensure reports are ready for external audits or banks?
Reports are prepared by qualified accounting professionals with clear documentation and traceable transaction data.
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