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Companies that underpay taxes must pay interest to the IRS on the amount underpaid, while companies that overpay will receive a return with interest \u2014 which is usually not as valuable as having cash on hand. Construction businesses that have annual revenues exceeding $25 million over the last three years are required to use the percentage of completion method. These larger businesses also include general overhead costs within each project, which has the advantage of providing clear insight into exactly how profitable each job is. Job costing is a form of project-based accounting that helps construction companies keep track of the expenses for a specific job or project. Throughout the project, it’s crucial to regularly adjust estimates based on actual costs and progress.<\/p>\n<\/p>\n
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Develop training for all teams\u2014not just finance and accounting\u2014that could play a role in an audit. This might include projects, purchasing, human resources, information technology, etc. For those working to create healthier financial outlooks, it\u2019s beneficial to conduct internal audits more proactively.<\/p>\n<\/p>\n