Construction books, bonding ready.
Job costing, WIP, AIA billing, and financial statements prepared for your CPA's review, in the format surety underwriters expect.
Where contractors need every dollar coded.
Job costing
Track costs by project to understand profitability and bid accurately on future work.
Progress billing & AIA
G702 / G703 billing, retainage, and cash flow across multiple concurrent jobs.
Certified payroll
Davis-Bacon compliance, prevailing wages, and WH-347 reporting.
Cash flow
Long project cycles, vendor terms, and seasonal work all under one plan.
Same business. Same twelve months. Different ending.
What another year of messy books costs a contractor
- Your surety caps your program off financials that undersell you, and the bigger bid goes to a competitor whose books are simply cleaner.
- WIP nobody reconciles means profit fade you discover at year end, after the money is already spent.
- Certified payroll and retainage tracked in spreadsheets, one audit letter away from a very bad month.
What changes when your books are bond-ready
- Reviewed-ready financials, WIP schedules, and job costing your bonding agent can actually work with.
- You see fade while the job is still running, while there is still time to fix the number.
- You bid the bigger job because your capacity finally matches your capability.
The fourteen-day assessment costs nothing and you keep every deliverable either way. The only thing at risk is another year of the left column.
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The full contractor stack.
Job cost, WIP, payroll, and bonding-ready statements on one team.
- Job costing and WIP reporting
- Progress billing (AIA G702 / G703)
- Certified payroll processing (WH-347)
- Prevailing wage compliance
- Subcontractor management and 1099s
- Equipment depreciation tracking
- Bonding support and financial statements prepared for your CPA's review
- Workers' compensation audit support
- Multi-state payroll for traveling crews
- Percentage-of-completion accounting
What you get, every plan
- Books closed on your plan's schedule, every month.
- All fifty states covered.
- Open seven days a week.
- 14 days. No card. Keep the deliverables.
How we get you bond-worthy.
A four-step process to take your books from wherever they are today to statements a CPA can review for bonding, and keep them that way.
Books cleanup
Bring your books to GAAP-compliant standard, retroactive if needed. We reclassify entries, reconcile job-cost ledgers, and rebuild prior periods so your starting position is defensible.
WIP schedule build
Set up percentage-of-completion accounting with job-cost coding. We construct your WIP schedule for contracts, costs incurred, earned revenue, billings, over / under, and projected gross profit per job.
Statements ready for CPA review
We prepare the financial statements and supporting schedules, then hand them to a contracted CPA firm for the review or audit when your bonding program calls for that level. Format and disclosures match what underwriters require to evaluate working capital and equity.
Ongoing maintenance
Keep WIP and financials current so renewals and capacity increases are routine. Monthly close, quarterly WIP refresh, and annual statements sent out for CPA review on a predictable cadence.
Step 1 typically pairs with our business systems diagnostic. Larger contractors layer in fractional CFO services for forecasting, capacity planning, and surety negotiations.
We code, bill, and report against each one correctly.
Public works
State and municipal projects with prevailing-wage requirements, certified payroll, and strict retainage rules. Costs coded to comply with awarding-agency reporting.
Federal Davis-Bacon
Federally funded work demands WH-347 certified payroll, fringe-benefit accounting, and DOL-ready records. Filed weekly, clean audit trail.
Commercial GC
AIA billing, change-order accounting, sub-default risk, and rolling WIP schedules across concurrent commercial builds.
Residential
Custom and spec residential builders get draw-schedule billing, lot-cost tracking, and inventory accounting that holds up at year-end.
Specialty trades
Electrical, mechanical, concrete, framing. High labor burden, equipment depreciation, and multi-site payroll rolling up cleanly to WIP.
We've prepared financials for contractors working with most major U.S. surety markets, including SBA-backed bond programs and private commercial surety. We prepare the statements and schedules for CPA review, formatted to meet the documentation standards underwriters expect, whether you're building single-project bonding, aggregate capacity, or moving up to a larger surety program.
Written for construction contractors, not a brochure.
Nothing below is a summary. Each position names the section it rests on, so open only what applies to you.
01What quietly costs you money5 we find most↓
None of these are exotic. They are the ones we find most often when we open a new set of books.
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01
Job cost only picks up direct invoices, so every job looks more profitable than it is
Material and sub invoices carry a job number because someone typed it on the bill. Labor burden, payroll taxes, workers comp premium, general liability, small tools, fuel and equipment hours usually sit in overhead where nothing forces them onto a job. Burden is employer FICA, federal and state unemployment, workers comp at your class code, general liability, benefits and paid time. On a construction class code the workers comp piece alone varies enough by trade and by state that a borrowed percentage will be wrong for you. Roofing and steel erection do not carry the same rate as finish carpentry.
Every job report overstates gross profit by the burden you never allocated. You bid the next project off that number, win it because you are cheap, and repeat the loss at a larger contract value. Contractors usually discover this at year end when the tax return gross profit does not match what the job reports said all year.
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02
The WIP schedule gets built once a year for the surety instead of every month
Percentage of completion revenue is driven by cost to complete, which is a field estimate, not an accounting output. If nobody updates cost to complete monthly, the schedule defaults to costs incurred divided by original budget, which assumes the estimate never moved. It always moves.
Overbillings look like profit. You are billed ahead on a job, the cash is in the account, and the P&L shows income you have not earned yet. You spend it on the next mobilization. When the job closes and the earned revenue trues up, the reversal lands all at once, equity drops, and the surety sees gross profit fade on a schedule you handed them yourself. Fade is one of the first things an underwriter looks for, because it tells them your estimates cannot be trusted.
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03
Paying subs as 1099 without the file to back it up
The classification test is not whether the sub asked for a 1099. On a jobsite where you set the schedule, provide the material, direct the sequence and supply the equipment, the facts often point to employment regardless of what the paperwork says. Contractors also skip collecting the certificate of insurance and the state license before the first check goes out because the crew was needed Monday.
Two separate bills arrive. Your workers comp auditor charges you premium on every uninsured sub as if they were your payroll, which on a construction class code is a real number, and it hits after the year is closed and the job is billed out. Separately, a reclassification exposes you to withholding, the employer share of FICA and penalties, with relief under Section 530 of the Revenue Act of 1978 available only if you filed the required information returns and treated similar workers consistently. Miss the 1099 and you generally lose the relief.
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04
Retainage handled as if it does not exist
Retainage receivable is often either left out of the books entirely until the check arrives, or dumped into ordinary accounts receivable. Retainage payable to subs gets the reverse treatment, paid out or accrued inconsistently. Both sides are commonly 5 to 10 percent of contract value, set by the contract rather than by any rule.
If it is left out, revenue and receivables are understated and your balance sheet shows less working capital than you actually have, which directly reduces the bonding capacity an underwriter will write. If it is dumped into ordinary AR, your aging looks like you cannot collect, days sales outstanding blows out, and the bank reads it as a collection problem when it is a contract term. Either way the statement misrepresents the company to the exact people deciding your capacity.
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05
Buying equipment in December to create a deduction, without checking the income limit or the debt
The advice to buy a machine before year end gets repeated without the second half of it. Section 179 expensing is limited to taxable income from the active conduct of a trade or business, so it cannot create or increase a loss and any excess carries forward. Bonus depreciation has no such income limit. Nobody runs the comparison before the invoice is signed.
You spend real cash on a machine, take a deduction that suspends because the year was already at breakeven, and add a monthly payment against next year's cash flow. Worse for a bonded contractor, expensing the asset in full drops book equity if the same treatment flows to the statement the surety reads, so a purchase meant to save tax can shrink the capacity you needed to bid the next job.
02The numbers your business actually runs on6 to know cold↓
Gross profit fade
Estimated gross profit at bid compared with gross profit at closeout, per job, tracked as a percentage swing.
It is the single number an underwriter uses to decide whether to believe your WIP schedule. Fade moves when change orders go unpriced, when the field is slow to report cost to complete, or when burden never made it onto the job.
Flat is the goal. As a rule of thumb, what moves an underwriter is the pattern rather than a single number. Fade on one problem job is a story you can tell. Fade showing up across most of your jobs reads as an estimating or reporting problem. Ask your agent what their program treats as acceptable, because it is not published and it varies.
Backlog and backlog gross profit
Remaining contract value on signed work not yet performed, and the gross profit still embedded in it.
Backlog is what funds next year's overhead. It moves with the award cycle, and it is the number that tells you whether you can carry the crew through a slow quarter.
Underwriters look at backlog against your bonded capacity and against your working capital, not just the dollar total. Backlog with thin embedded margin is worse than a smaller backlog with real margin.
Working capital
Current assets minus current liabilities, adjusted the way a surety adjusts it. Underwriters commonly discount or exclude items like related party receivables, prepaid expenses, inventory and sometimes the portion of retainage not collectible within a year.
This is the number that decides how much work you are allowed to bid. It moves with distributions, equipment purchased for cash, and how retainage and overbillings are classified.
Sureties commonly size single job and aggregate capacity as a multiple of adjusted working capital and net worth. The multiple is not standard, it varies by surety and by program, so get yours from your agent rather than working off a number you read somewhere.
Overbillings and underbillings
Billings in excess of costs and estimated earnings, and costs and estimated earnings in excess of billings. Under ASC 606 these are presented as contract liabilities and contract assets.
Overbillings are borrowed cash, not profit. Underbillings are work you performed and have not invoiced. Both move every month and both distort cash if you read the bank balance instead of the schedule.
A modest net overbilled position is normal and is how contractors finance jobs. A large underbilled position usually means unbilled change orders or a job running over budget.
Labor burden rate
The multiplier on base wage that captures employer payroll taxes, workers comp premium at your construction class code, general liability, benefits and paid time.
It is the difference between a job that made money and a job that did not. It moves with your experience modifier, your claims history, and the trade mix on the crew.
Compute your own rate by class code rather than borrowing a percentage. Construction workers comp rates vary widely by trade and by state, and your experience modifier moves it again, so the same wage carries a different loaded cost at two contractors in the same town.
Days sales outstanding, shown separately from retainage
Collection speed on current progress billings, reported apart from retainage held to closeout.
Blending the two makes a healthy collection cycle look broken to a lender. Separating them shows how much of your receivable is a timing term in the contract rather than a customer who is not paying.
Retainage should be tracked on its own schedule by job and by expected release date, not blended into the aging.
03Where the tax work is6 positions↓
Each one names the section it rests on and who is allowed to perform it.
The small contractor exception to percentage of completion
IRC Section 460, IRC Section 448(c), IRC Section 56(a)(3), Treas. Reg. 1.460-3(b), Rev. Proc. 2024-40 and Rev. Proc. 2025-32 for the indexed thresholds
Section 460 generally requires percentage of completion for long term contracts. The small contractor exception lets you use another permissible method, including completed contract, for a contract you expect to complete within two years of the contract commencement date, if your average annual gross receipts for the prior three years do not exceed the Section 448(c) threshold.
Read the full position, 159 more wordsShow less↓
That threshold was $31 million for taxable years beginning in 2025 and is $32 million for taxable years beginning in 2026, indexed each year. Home construction contracts have their own exemption. This is a real deferral opportunity for a contractor whose jobs cross a year end, but two things get missed.
First, the method you use for tax does not have to be the method on the statement your surety reads, and for most bonded contractors it should not be, because completed contract makes equity look lumpy. Second, for contracts that are not home construction contracts the percentage of completion calculation can still be required for alternative minimum tax purposes under Section 56(a)(3).
TCJA repealed the corporate AMT, so in practice this now lands on the individual owners of an S corporation, partnership or sole proprietorship rather than on the entity, which is exactly why it gets overlooked at the entity return and shows up on the owner's 1040.
Who does it: In house. Method analysis, the Form 3115 accounting method change when one is needed, and the return itself are prepared and signed by our own PTIN holding preparer.
The look back method, and when you are excused from it
IRC Section 460(b)(2), Treas. Reg. 1.460-6, Form 8697
If you report a long term contract under percentage of completion, you generally owe or are owed interest on the difference between the tax you actually paid each year and the tax you would have paid using actual final costs. That is computed on Form 8697.
Read the full position, 91 more wordsShow less↓
There is a de minimis exception for contracts completed within two years of the commencement date where the gross contract price does not exceed the lesser of $1 million or one percent of your average annual gross receipts for the three taxable years preceding the year the contract is completed.
That exception is mandatory rather than elective when you meet it, and there is a separate simplified marginal impact method available. Most small contractors qualify out, but the ones who do not usually find out late because nobody ran the test.
Who does it: In house.
Section 179 versus bonus depreciation on equipment, run as a comparison rather than a habit
IRC Section 179, IRC Section 179(b)(5), IRC Section 168(k), Rev. Proc. 2025-32, Form 4562
For 2025 the Section 179 limit is $2,500,000 with the phase down beginning at $4,000,000 of qualifying purchases. For 2026 the limit is $2,560,000 with the phase down beginning at $4,090,000. The One Big Beautiful Bill Act permanently restored 100 percent bonus depreciation for qualifying property both acquired and placed in service after January 19, 2025, and both conditions have to be met.
Read the full position, 109 more wordsShow less↓
They are not interchangeable tools. Section 179 is elected asset by asset and is capped at taxable income from the active conduct of your business, so it cannot create or increase a loss and the disallowed amount carries forward. Bonus applies by class life, has no income cap, and can drive a net operating loss.
Heavy equipment and trucks over 6,000 pounds gross vehicle weight follow their own rules, and sport utility vehicles are subject to a separate Section 179 cap, $31,300 for 2025 and $32,000 for 2026. Clean vehicle credits terminated for vehicles acquired after September 30, 2025, so that is no longer part of the fleet conversation.
Who does it: In house.
Section 179D and 45L, and the fact that the window just closed
IRC Section 179D, IRC Section 45L, One Big Beautiful Bill Act termination provisions
The Section 179D deduction for energy efficient commercial building property and the Section 45L credit for energy efficient new homes were both terminated by the One Big Beautiful Bill Act. 179D no longer applies to property where construction begins after June 30, 2026, and 45L no longer applies to dwelling units acquired after June 30, 2026. The two deadlines are measured differently, which matters.
Read the full position, 117 more wordsShow less↓
179D turns on when construction began, established under the physical work test or the five percent safe harbor. 45L turns on when the unit was acquired by the buyer, meaning it had to close. If you are a homebuilder or a commercial contractor with work that began or units delivered before those dates, the benefit is still there and it is worth going back for.
If you were counting on it in a 2027 pro forma, it is not there anymore. 179D on government owned buildings also involves an allocation from the building owner and a certification by a qualified individual, which the statute requires to be a licensed engineer or contractor, and that is not us.
Who does it: We identify eligibility, gather the documentation and prepare the return positions in house. The energy modeling and the certification 179D requires are performed by a qualified licensed professional engineer or contractor as the statute requires, coordinated through our partner network.
1099 reporting for subs, with a threshold that just changed
IRC Sections 6041(a) and 6041A(a)(2) as amended by the One Big Beautiful Bill Act, Form 1099-NEC, Form 1099-MISC, Form W-9, Form 1099-K
The reporting threshold for Form 1099-NEC and Form 1099-MISC was raised from $600 to $2,000 for payments made after December 31, 2025, so calendar year 2026 payments reported in early 2027 are the first ones under the new number, and it is indexed for inflation starting with 2027 payments. Payments made in 2025 still follow the old $600 rule.
Read the full position, 78 more wordsShow less↓
Payments to corporations are generally exempt, payments to attorneys are not. Do not let the higher threshold become a reason to stop collecting the Form W-9 up front, because the W-9 is where the exemption gets substantiated and where backup withholding exposure is avoided.
Separately, the 1099-K threshold is back to more than $20,000 and more than 200 transactions after the $600 rule was repealed retroactively, which matters if you take card or app payments on residential work.
Who does it: In house. We collect and validate the W-9s, track the payments through the year, and prepare and file the 1099s under your name and EIN.
Qualified overtime reporting, because your crew runs overtime
Fair Labor Standards Act section 7, One Big Beautiful Bill Act qualified overtime deduction, IRS guidance on the deduction for qualified overtime compensation
The deduction for qualified overtime applies only to the premium portion, meaning the excess over the regular rate required by section 7 of the Fair Labor Standards Act, which is the half in time and a half, not the full overtime wage.
Read the full position, 117 more wordsShow less↓
It is capped at $12,500, or $25,000 on a joint return, and it phases down once modified adjusted gross income passes $150,000, or $300,000 for joint filers. It runs for tax years 2025 through 2028.
It is an employee level deduction, but it creates an employer level job, because your people will ask you for the number and payroll has to be able to separate the premium from the base. Separate reporting was not required on the 2025 Form W-2 given how late the law landed, so 2025 gets reconstructed from payroll records and time sheets.
Going forward, contractors with prevailing wage crews and heavy overtime want this configured in payroll rather than rebuilt at year end.
Who does it: In house through payroll setup and year end reporting.
Construction & bonding questions.
Do you prepare certified payroll reports?
Yes, we prepare WH-347 certified payroll for prevailing wage jobs, including Davis-Bacon projects. Accurate fringe benefit calculations, proper wage classifications, and timely submission.
Can you help with construction job costing?
Absolutely. We implement construction job costing systems that track labor, materials, subcontractors, and equipment by project, giving you real-time visibility into job profitability and helping you bid future work more accurately.
Do you handle bonding financial statements?
Yes. We prepare the financial statements and WIP schedules for bonding, structured the way surety underwriters expect. When your program needs a reviewed or audited statement, a contracted CPA firm issues it, not WAYG. We work directly with your bonding company on questions.
How quickly can you get my financials bonding-ready?
Typical timeline is 30 to 90 days depending on the condition of your books. Clean books with a solid chart of accounts can be bonding-ready in about 30 days. Books that need retroactive cleanup, WIP construction, and prior-period reclassification usually take 60 to 90 days before a CPA can issue reviewed surety bond financial statements.
Do you work with my surety broker directly?
Yes. We communicate directly with your surety underwriter and broker and provide whatever statements, WIP schedules, AR agings, and supporting documentation they request. You stay in the loop without being the middleman.
What's a WIP schedule and why does my surety need it?
A WIP schedule is a job-by-job report showing contract value, costs to date, percentage complete, revenue earned, amounts billed, and over- or under-billing position. Surety underwriters use it to model risk. No serious bonding program approves capacity without one.
Can you do an audit if my project requires one?
No. WAYG does not audit or review financial statements. We coordinate with a contracted CPA firm that is qualified to audit when a specific bond, project, or program requires it. For most private commercial surety programs, a reviewed statement issued by that CPA firm is enough. We tell you straight which level your program actually needs.
Do you handle AIA G702 / G703 progress billing?
Yes, full AIA billing support. We prepare G702 pay applications and G703 continuation sheets, track retainage by project, account for change orders, and reconcile AIA billings against your WIP schedule so revenue recognition stays accurate.
When are you growing?
Two weeks. Real job costing, real WIP, real bonding conversation. You keep the deliverables.
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