Construction accounting can be difficult, involving loans, progress billings, direct and indirect costs and other typical transactions in this industry. There are also tax situations that can be complex. Accounting for construction often involves specialized software that capture data in a very detail manner. For example, when lumber is purchased, accountants need to know what project that belongs to and sometimes materials may be divided among several jobs. Bookkeeping for construction costs can become very meticulous, involving detailed time sheets and cost allocations.
Learn the construction industry vocabulary. In order to learn specialized accounting skills, you need to learn the wording. You may know general accounting, but you need to pay attention to the buzz words and other specific words related to the industry, including estimations and sub-contracting situations. Reports in the construction business can be different than others. You may have reports that are billings to clients or primary contractors, reports on profitability of projects, and indirect costs.
Apply for jobs in businesses that deal in construction. Be around the construction world by working as an accounting clerk or other clerical worker. By looking at files and being around the construction business, you can learn a lot about accounting issues and problems related to the industry. Nothing like on-the-job-training to get your feet wet and get exposure to the sector. Learn as much as you can about the "Percentage-of-Completion" method to account for revenue, a common accounting method to recognize revenue as time progresses, not when the project in completed.
Enroll in a class on construction accounting. This is beneficial especially if you have a good background in accounting. Many community colleges and extension courses at your local university offer this class. Check out one or two day workshops such as the "Fundamentals of Construction Accounting" by Lorman Education Services, or the " Basics of Construction Accounting" by The Construction Financial Management Association. Also, don't forget the software training for the construction industry. Many times, if you have a good accounting background, you can learn construction accounting at the same time that you learn to use a new software program, such as BuildStar Construction Management or Penta ERP.
Sheila Shanker is a certified public accountant based in California. She writes online courses for professionals seeking CPE hours and has also published the book "Guide to Non-profits: From the Trenches." Her articles have been published in national magazines such as the "Journal of Accountancy," "Architecture Business and Economics" and "Veterinary Economics." Shanker holds a Master of Business Administration.