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Can anyone help with regards to the accounting for construction companies? I am doing the books for a builder, and need to know how to recognize income and expense in order to calculate the VAT. I know that income and expense are recognized on a stage of completion basis, but how does one put this into practice?
Any help would be great!
Expenses= Everything he buys when he buys it and Income = The invoices he gives to the customers.
The expenses are recognized when it happens, you can make use of cost codes to link them together for jobs. Claim the VAT the moment it happens otherwise you will confuse yourself.
Income is realized the moment that invoice gets handed to the client.
Hope this helps, if not you will need to explain your question in more detail
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