Double-entry for builders: construction accounting without the mystery
A construction firm that only tracks cash knows what it spent but never what a project actually cost or earned. Double-entry is the 500-year-old fix — and it maps onto site life better than most builders expect.
Most contracting firms start with a cash book: money in, money out, a running balance. It works until the first project of size, where the questions that decide survival are ones a cash book cannot answer: what has this project actually cost so far? What are we owed on certificates issued but unpaid? What do we owe suppliers who delivered but haven't invoiced? Are we profitable, or just liquid?
The idea, minus the jargon
Double-entry bookkeeping records every event twice — where money (or obligation) came FROM and where it WENT — so the books capture not just cash moving but debts forming and dissolving. Buy steel on credit and the cash book sees nothing; double-entry sees material cost arriving AND a supplier liability arriving, which is the truth of the firm's position that day.
| Event on the project | What is recorded |
|---|---|
| Steel delivered on 30-day terms | Project material cost ↑ · Payable to supplier ↑ |
| IPC certified, awaiting payment | Receivable ↑ · Contract revenue ↑ |
| Client pays the certificate | Bank ↑ · Receivable ↓ (revenue unchanged — it was earned at certification) |
| Month-end wages paid | Labour cost ↑ · Bank ↓ |
| Retention deducted | Retention receivable ↑ — money earned, parked, and too often forgotten |
The construction-specific layer
Generic accounting software does double-entry perfectly well — for a firm whose atom is the invoice. Construction needs the project dimension on every entry: costs coded to projects (job costing), revenue recognised through certificates (the IPC chain), retention tracked as its own receivable, and a chart of accounts that mirrors how the firm actually spends. Without the project dimension, the books are true in total and silent about everything that matters.
In Ofivio this is one workspace rather than an integration: in Ofivio AEC the Accountant module turns Finance from single entry into double entry, with the chart of accounts and vouchers, while the project events (procurement, payroll, milestones) happen in the same workspace. An accounting-led firm that keeps books for clients starts from Ofivio Essentials instead.
Double-entry books inside the workspace where the projects already live.
See Ofivio AEC →Construction accounting, written by the work that already happened
Real double-entry written by the work: certificates, retention, advances, subcontractor bills and project profit — not a ledger with a project field bolted on.
SolutionsAccounting that is a consequence of the work, not a second job
A real ledger — journals, trial balance, P&L, balance sheet — that is written by invoices, payroll and project work instead of being typed up after the fact.
SolutionsPayroll that comes out of the roster and lands in the ledger
Run payroll off the live roster — advances, deductions, overtime and site allowances — and have the wage cost land on the projects the people were actually on.
IndustriesSoftware for contractors, organised around the bill and the site
What a contractor runs on: bill of quantities, procurement, store, daily site records, payroll and a ledger that agrees with the site — in Ofivio AEC.
Buyer's guidesChoosing accounting software for a construction company
What construction does to a ledger that general accounting does not expect — retention, advances, work in place — and the four categories that answer it.
Why generic accounting software mishandles an architecture practice
The root problem is the dual fee. Software that assumes a single revenue stream forces you to choose which half of your practice gets measured properly.
ProductsOfivio AEC, explained: one product for architects, engineers and contractors
Ofivio AEC arrives ready for the practice: design stages, drawing sets, revisions and transmittals in Studio, with Manager, HR and Finance beside them. Here is what is inside, what a firm adds, what it costs, and what it does not do.
GuidesWhat is an IPC? Interim payment certificates for people who have to live with them
Contractors are not paid when work is done — they are paid when work is certified. The IPC is the document that moves the money, and it deserves to be understood precisely.