Construction Accounting 101 - Proper Accounting for Change Orders in Construction Projects: Construction Accounting 101

Welcome back to our Construction Accounting 101 series! In this episode, Reid Bangert and Lisa Hutt discuss the critical topic of properly accounting for change orders in construction projects. Learn about the different types of change orders, best practices for documentation, and how to navigate complex contracts and revenue recognition standards. Please note, this video is for informational purposes only and does not constitute financial advice. For specific guidance on your accounting controls, consult with a CPA or professional accountant. Key Topics Covered: Types of Change Orders Importance of Documentation Impact on Contract Price and Profit Margins Revenue Recognition and ASC 606 Using Sage Intacct for Change Order Management Best Practices and Resources Chapters: 0:00 Introduction 0:12 Overview of Change Orders 0:53 Types of Change Orders 1:56 Unapproved and Unpriced Change Orders 3:00 Impact on Profit Margins 4:04 Importance of Documentation 6:05 Revenue Recognition and ASC 606 7:55 Best Practices for Accounting for Change Orders 8:55 Using FASB and CFMA Resources 9:31 CFMA's Construction Accounting Course 13:12 Conclusion and Key Takeaways For more detailed discussions on construction accounting, make sure to subscribe to our channel and follow our Construction Accounting 101 playlist. Resources: The Constant Challenges Faced When Accounting for Change Orders and Claims: https://cfma.org/articles/the-constant-challenges-faced-when-accounting-for-change-orders-and-claims FASB Revenue Recognition Standard: https://asc.fasb.org/1943274/2147479899 Join the CFMA today! https://cfma.org/membership/ Have questions? Sign up for a free Ask Richard account and get expert advice on Sage Intacct: https://askrichard.io