Construction Business Books CleanupTwo clocks after the money moves

The contract is what we read. An owner who receives a written payment request, for an amount the contract allows and for work properly performed or materials suitably stored, pays the contractor less any amount the contract lets the owner withhold. The deadline is the day the contract names after the owner receives the request. A statute that sets that day is read on the call for the state where the job sits. A national page does not guess that statute.

The books should show the request, the day it was received, and what was withheld on purpose. A hope that a check is coming is not a date. When the request is real and those days are quiet, the open item is the owner's clock, and the job's cash story changes on that day whether or not anyone has updated a spreadsheet.

A spring storm can put ice on a roof and a crew on a ladder the same week. You know that sound when the ice hits and the phone starts. A roof after a declared disaster is still a job, with a request date and a hold, and the labor on that repair can be a different sales tax question if the bill states the labor apart from the materials. The weather is the feeling. The request date is the work.

A contractor who receives payment pays its subcontractors the portion attributable to their work by the day the contract names after the contractor receives the owner's payment. The next tier has the same pass through. The number of days is whatever that contract wrote down, and the books follow the writing rather than a habit.

That is why a deposit can look like profit on a Tuesday and be spoken for by Thursday. If the books record the deposit as free and the sub bills as a vague expense, both the pass through clock and the job cost are invisible. We date the deposit, we name the subs it belongs to, and we leave the remainder as the only amount that could be a draw.

Owners ask whether the month can still be open while these clocks run. Yes. An open month gets closed before anyone talks about what comes next, since a forward number would only be a guess. We will say so rather than hand you a number with the clocks still hidden inside it.

A written request is a date, a job, and an amount the contract allows. The books can hold that trio even when the check is late. What we will not invent is a request that was never sent. If the only record is a text that says the draw is coming, the item stays open and the owner's clock does not start in our notes.

Withholding is the other half of the same clock. An owner who holds back for a reason the contract allows should see that reason on the row, rather than as a silent short pay. The contractor's receivable is then the unpaid allowed amount, rather than the whole application. Mixing those two is how a job looks both underbilled and overpaid at once.

Subs feel the second clock in the body. The pass through day is a real date once the owner has paid. If the deposit landed on Friday and the sub is still waiting the following Friday, the books should show the deposit, the portion that belongs to that sub, and the day the pass through was due. One bucket labelled job cost hides all three, and the next draw then looks like a surprise instead of a date someone missed.

Who runs payday. Setup can sit with us. After the mapping is done, the crew is paid on Friday by the provider, not by this practice. We do not run it. That is the whole answer, and it does not change because a job is behind.

Who prepares the return. Ask the people who tied the months if you also want the return prepared, and leave that choice until the hold is visible. We leave the return alone until every month ties to the bank.

A lender asking for a signature. The request gets named on the first call and pointed outward. The tied month still helps the firm that will sign. Our month does not stand in for their signature.

What if the draw was booked and the hold disappeared. That question has its own page. The short version is that the hold needs a row again, as a liability or a receivable, and the cost code has to give the amount back.