I was asked recently to write about budgeting and what should go into a project's budget. Great topic! I would like to answer this from the perspective of what's meaning for the work in progress (WIP) report. Start with direct costs and costs necessary to complete the project such as: Material Labor Labor burden Subcontractor costs Equipment rental General direct costs (ex. bonds, insurance specific to the project, etc.) All these costs should show up in your total estimated cost on the...

Year end is approaching. Feel free to post some questions. I will do my best to answer quickly. If I don't know the answer, I will do my best to provide some guidance. Thanks! Ara

Quick lesson! If you've incurred costs on a project but haven't recorded the costs in your accounting system yet because you haven't received the invoice, you should technically accrue the costs. Accruals will function as a placeholder until you receive the invoice. Once you receive the invoice and record it, "reverse" the accrual so you're not doubled up on liabilities and costs. For example, if you are anticipating an invoice of approximately $100,000, you would record the following entry:...