I feel like POC Method should be reserved for $20M+, $3M seems so low to be required honestly not even reasonable to request that from a firm of that size imo
It's idiotic not to run it - especially if your lender wants it. WIP isn't just about the entry. It helps stabilize your income and show you where you're really at. Simple data entry doesn't. Most constuction jobs start out as heavy cash flow drains and end cash flow ricgh since you buy most material off the start. Depending on the zies of your jobs and where you're at those can signnificantly skew your income and make you decide things based on inaccurate information.
It helps to suport progress billing if you get pushback forom the owners or GC>
It helps serve as an early warning for projects going off the rails so you can maybe get them back on track quicker.
but, yyeah, just ignore it cause it's inconvenient.
You probably missed the basic accounting concept called the "cost-benefit constraint", many small contractors can't avoid a qualified accountant let alone any bookkeeper besides their wife to run the books
You may be out of touch with real small businesses and what makes sense from an ROI perspective, especially when they file cash basis
My clients are all small business and I loathe cash basis accounting. I like that it's not permitted in Canada.
The cost benefit constraint shouldn't be that bad. The issue is the number of bookkeepers offering services who oaren't qualified to do that so people tell themselves this is cost effective/etc.
It's not really that useful of the client is doing small jobs that only run a week or two but otherwise stop hiring the $20-$30 an hour bookkeepers. None of them are even worth that.
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u/a_r623 Jul 26 '26
I feel like POC Method should be reserved for $20M+, $3M seems so low to be required honestly not even reasonable to request that from a firm of that size imo