Key Year-End Moves for Construction Companies
- Reconcile Job Costs & WIP Reports: Make sure revenue, costs, and backlog are accurate before year-end.
- Review Retainage & Receivables: Collect what’s owed and avoid carrying old balances into 2026.
- Optimize Equipment & Asset Purchases: Consider Section 179 or bonus depreciation for needed machinery or vehicles.
- Maximize Retirement & Owner Compensation: Use tax-favored contributions to reduce taxable income.
- Get Ahead on 2026 Cash Flow: Build your forecast and lock in financing before interest rates or conditions change.
Reconcile Job Costs & WIP Reports
If your job costing or WIP schedule isn’t dialed in, year-end reports won’t tell the full story. Review all projects for accurate revenue recognition, cost allocations, and profit margins. Clean, accurate WIP data is not just for bonding and banks — it also drives better tax planning. Underbillings or overbillings discovered now can help you time income recognition strategically.
Review Retainage & Receivables
Retainage is the bane of construction cash flow. Closing Q4 strong means collecting what’s collectible. Review outstanding retainage and receivables and push to settle as much as possible before December 31. Every dollar you bring in now strengthens your balance sheet and reduces tax headaches down the line.
Strategic Equipment & Asset Purchases
Need a new skid steer, truck, or software license? Buying before year-end could deliver a tax break. Section 179 and bonus depreciation allow many construction companies to deduct the full purchase price of qualifying assets. But — don’t buy just to save on taxes. Make sure the investment fits your 2026 project pipeline and long-term needs.
Retirement Contributions & Owner Compensation
Like medical practices, construction businesses can benefit from maximizing retirement contributions before year-end. A well-structured 401(k), profit-sharing plan, or cash balance plan reduces current taxes while investing in your future. It’s also a smart way to attract and retain top talent in a competitive labor market.
Build Your 2026 Cash Flow Forecast
Construction businesses live or die by cash flow. Q4 is the time to map out a rolling 13-week forecast and stress-test your 2026 pipeline. Lock in financing now if you anticipate equipment purchases or working capital needs. Banks and bonding agents love proactive planning — and it puts you in control rather than scrambling mid-project.
Partner with a Construction-Savvy CPA
Not all CPAs understand construction. From retainage and WIP to complex billing methods, you need an advisor who speaks your language. At J&S Moore Financial Group, we specialize in helping construction companies close out the year strong with accounting, tax advisory, and fractional CFO support. We’ll help you capture deductions, clean up your books, and step into 2026 with confidence.
Schedule your year-end consultation today and let’s build a profitable foundation for the new year — together.
