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About QZ Infomatics →Request a demoYour accountant can close the month. That still does not tell you
whether the job is making money.
Construction accounting software is financial software organised around projects rather than accounting periods. Alongside the standard ledgers it handles progress billing, retention, subcontractor certificates, work in progress and percentage-of-completion revenue — the areas where a general accounting package pushes contractors back into spreadsheets.
The difference
A trading business recognises revenue when it delivers. A contractor recognises revenue as work progresses, against a contract that may run for two years and change shape three times along the way. Bolting that onto a general ledger produces a system where nobody can say which of the two reports is right.
Revenue
Percentage of completion recognises revenue in proportion to work performed. The standard measure is cost incurred divided by total forecast cost, applied to the contract value, calculated from live project data rather than a manual estimate.
The weak point is always the forecast final cost. If that number is stale, the revenue figure is wrong in exactly the direction that flatters the current month.
Retention
Withheld at the contract percentage on each client application, sitting in its own ledger account rather than netted into receivables where nobody looks at it.
Withheld again on each certificate you issue, tracked per subcontract with its own release position.
Release tracked against practical completion and defects liability dates, with ageing so retention that should have been released twelve months ago surfaces instead of quietly sitting there.
For most UAE contractors, aged retention is one of the largest recoverable balances on the balance sheet and the least actively managed. A register that ages it by contract and by due date usually pays for the software on its own.
Subcontractors
Subcontract certificates calculate work done less retention, less advance recovery, less any back-charges, with 5% VAT applied to the net certified amount.
Payment terms and certificate dating both affect VAT timing on construction contracts. This is a recurring source of error in manually prepared applications, usually in the direction that creates an FTA exposure rather than an overpayment.
Variations
Variation orders carry their own value, status and approval position, so approved, submitted and anticipated variations report separately rather than as one number.
Unapproved variations stay out of recognised revenue while remaining visible in the cost forecast. That is the specific distinction auditors look for, and the one contractors most often get wrong in both directions.
The commercial cost is larger than the accounting one. Variations built and never billed are the single largest source of margin loss in UAE contracting, and they are lost because the instruction, the cost and the application lived in three different places.
Linking the instruction to the cost is what closes that gap. Document control →
Billing
Interim applications assembled from measured progress against BOQ items, with previously certified amounts, retention, advance recovery and VAT applied automatically.
Where the consultant certifies less than the amount applied for, the difference is recorded as a variance with a reason rather than silently absorbed into the next application. Over months that register becomes evidence about certification behaviour.
Standard formats, including AIA G702/G703 style applications where a client requires them, produced from the system rather than rebuilt in Excel each month.
Integration
Costs flow from purchase orders, subcontracts, timesheets and plant charges into the project ledger and the general ledger at the same time.
Because committed cost is captured when the order is raised rather than when the invoice arrives, the forecast final cost driving revenue recognition reflects reality.
UAE compliance
On progress applications, retention and subcontractor certificates, with the timing rules construction contracts create.
Which requires project-level profitability to be supportable and related-party subcontracting to be documented.
As the FTA mandate phases in through 2027, interim payment applications and certificates will need to move to structured invoices. E-invoicing.
With hours allocated to project cost codes rather than to a single overhead account.
Construction accounting is normally licensed as part of a construction ERP → rather than bought separately. Implementation is driven by how many live projects need opening positions loaded — cost to date, revenue recognised, retention held, advances outstanding and open variations, per project. Three to six months is typical, and the critical path is agreeing one cost-code structure across estimating, procurement and finance.
Construction accounting FAQs
Construction accounting software is financial software organised around projects rather than accounting periods. Alongside standard ledgers it handles progress billing, retention, subcontractor certificates, work in progress, percentage-of-completion revenue and cost-to-complete forecasting — the areas where general accounting packages push contractors back into spreadsheets.
Revenue and cost recognition differ fundamentally. A trading business recognises revenue on delivery; a contractor recognises it as work progresses against a contract that may run for years. That single difference creates WIP, retention, over- and under-billing and variation accounting, none of which standard packages handle natively.
Percentage of completion recognises revenue in proportion to work performed, most commonly measured as cost incurred divided by total forecast cost. The system applies that percentage to the contract value to determine revenue for the period, then compares it against amounts invoiced to produce over- or under-billing.
Retention is withheld at the contract percentage on each client application and each subcontractor certificate, held in separate ledger accounts rather than netted into receivables. Release is tracked against practical completion and defects liability dates, so ageing retention balances stay visible instead of quietly accumulating.
Yes. Variation orders are recorded against the contract with their own value, status and approval position, so approved, submitted and anticipated variations report separately. Keeping unapproved variations out of recognised revenue while still visible in the cost forecast is the distinction auditors look for.
Subcontractor certificates calculate work done less retention, advance recovery and back-charges, with 5% VAT applied on the net certified amount. Payment terms and certificate dating affect VAT timing on construction contracts, which is a recurring source of error in manually prepared applications.
Yes. Costs flow from purchase orders, subcontracts, timesheets and plant charges into the project ledger and general ledger at the same time. Because committed cost is captured at order stage, the forecast final cost driving revenue recognition reflects reality rather than only invoices received so far.
It is normally licensed as part of a construction ERP rather than bought separately, priced by users and modules. A contractor needing only project-aware finance sits well below one requiring procurement, plant, HR and document control. Implementation cost depends on how many live projects need opening positions loaded.
Talk to a consultant
Book a free 30 minute call with QZ Infomatics in Dubai. You will leave it with a platform recommendation, the reasoning behind it, a realistic timeline and an indicative budget band — before you commit to anything.
