What's a completed job?
Great question! Often times we present certain jobs as completed or closed on the financial statements but the client keeps the job active on their side. Why is it done that way? Clients often consider a job completed or closed when all the retainage receivable has been collected and all vendors have been paid. Until then, the job is open or in progress on their end. Those are great reasons to keep a job open on the client's side but for financial statement presentation purposes we have a different take.
When the job is 100% billed out, including retainage and substantially all the job costs have been posted, I like to present it as completed. So long as the retainage is expected to collected in full and punch list items, if any, are minimal, we present a job as being completed. There's no hard fast rule for this so you'll have to evaluate completion on a case by case basis.
In the following example, I've listed two scenarios:
Scenario 1: Based on a discussion with the client and review of subsequent activity, it looks like the job was 100% billed out by 12/31/26. No additional billings in 2027. As for costs, we had only $2,000 costs with no additional costs expected. Based on the information, I would have a strong case to show this job as completed.
Scenario 2: Based on a discussion with the client and review of subsequent activity, it looks like the job was not 100% billed out by 12/31/26 with remaining billings of $6,000. In addition, $10,000 in costs were incurred in 2027. In this case, So, we still have amounts to bill out and it looks like more than just a few punch list items remain in 2027. Based on the information, I would have a strong case to show the job as in progress.
Ara
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