Construction Finance Systems Guide for Builders and Contractors

Job costing, WIP, claims, retentions, cash flow and the systems behind them, in plain English for Australian building and trades businesses.

This guide covers the finance and systems side of building and contracting in Australia: how you cost jobs, report work in progress, claim and get paid, track retentions and variations, forecast cash, manage subcontractors and keep your job software and Xero or MYOB in step. It is written for owners, finance managers and operations managers of building, construction and trades businesses, not for accountants or software developers.

Each section gives you the plain-English overview in a few minutes, then points to the Kenomont articles and pages that go into the detail. Where rules are involved, such as Security of Payment deadlines, QBCC requirements or RCTIs, we keep to the basics and send you to the full article and the regulator, because the details change and depend on your contracts.

The thread running through all of it is simple. Most building businesses already have the software they need. The problem is that information gets stuck between the job system, the accounts and a pile of spreadsheets, so the numbers arrive late and nobody fully trusts them. Fix the flow, and job margins, WIP, claims and cash flow all get easier. See also our construction industry page.

In this guide

  1. Job Costing: Knowing What Each Job Really Costs
  2. WIP Reporting: The Report That Tells You Where Jobs Stand
  3. Progress Claims, Payment Schedules, Retentions and Variations
  4. Cash Flow Forecasting for Builders
  5. Subcontractors: Onboarding, Committed Costs and RCTIs
  6. Queensland: QBCC MFR Reporting and Project Trust Accounts
  7. Construction KPIs and Reporting
  8. Procore, Buildertrend and Job Systems Connected to Xero or MYOB
  9. Trades Job Management: simPRO, ServiceM8 and AroFlo
  10. Practical AI for Builders and Tradies
  11. Where to start
  12. How Kenomont helps
  13. Frequently asked questions

Job Costing: Knowing What Each Job Really Costs

Job costing is the base everything else in this guide sits on. If costs don’t land against the right job, and soon, then WIP, claims, cash flow and margin reports are all built on guesses. The usual trouble is timing: bills get coded weeks late, timesheets sit in a folder and subbie claims turn up at month-end.

Good job costing has a few plain parts. Every cost gets a job and a cost code when it is incurred, not when it is paid. Labour is costed at what it really costs you, not just the hourly wage. Committed costs (orders and subcontracts you’ve agreed but haven’t been billed for yet) are counted alongside actual costs. And at the end of the job someone compares estimate with actual, so the next estimate is better.

Small leaks such as unbilled variations, materials charged to the wrong job and labour overruns don’t show up in one bad month. They show up as margins that never quite match the estimate. A few minutes of structured cost entry on site each day does more for margin than a better spreadsheet at month-end. The same habit helps at tender time: estimates built from your own past jobs beat estimates built from memory, and code changes such as NCC 2025 need to flow into your rates as well as your plans.

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WIP Reporting: The Report That Tells You Where Jobs Stand

A work in progress (WIP) report answers one question for every open job: are we ahead or behind, and by how much? It compares what you’ve earned on the job so far with what you’ve billed. If you’ve billed more than you’ve earned, you’re over-claimed and some of the cash in the bank belongs to work not yet done. If you’ve earned more than you’ve billed, you’re under-claimed and money is sitting unclaimed.

Most builders run WIP in a spreadsheet beside Xero or MYOB, rebuilt each month. The common problems: cost to date is missing bills not yet entered, cost to finish is a gut feel, approved variations aren’t in the contract value, and nobody is sure which copy of the spreadsheet is right. That is how one job ends up with three different answers.

A WIP report you can trust needs current costs, committed costs, approved variations and an honest cost-to-complete from the person running the job. It also needs to feed the accounts properly, through month-end adjustments your accountant agrees with, so the profit and loss reflects the work done rather than the invoices sent. Get WIP right and several other jobs get easier, including cash flow forecasting and, in Queensland, QBCC annual reporting.

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Progress Claims, Payment Schedules, Retentions and Variations

Construction billing doesn’t look like ordinary invoicing. A contract value changes with variations, you claim in stages, part of each claim may be held back as retention, and the other side has a set time to respond. Accounting software isn’t built for that, so this side of the business usually ends up in spreadsheets and email.

The risks are real money. Each state’s Security of Payment Act sets its own deadlines for claims, payment schedules and payment, and those deadlines differ between Queensland, New South Wales and Victoria. Miss a deadline for a payment schedule and you can end up owing the full amount claimed. Lose track of a retention release date and money you’re owed stays with someone else. Victoria has also made significant changes to its Act during 2026, which affect what can be claimed and how security is released.

Variations are the quietest leak of all. Work gets done on a site instruction, the paperwork lags, and the variation never makes it onto a claim. A simple rule helps: no variation work without a variation number, and every open variation shows on the weekly report until it is priced, approved and claimed.

The practical fix is one claims and retention register, fed from your job system and accounts, that lists every claim sent and received and every retention held, with its deadline. For your own contracts, the articles below set out the detail and a construction lawyer can check them.

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Cash Flow Forecasting for Builders

Profitable builders still run out of cash. Money goes out to subbies and suppliers before claims are paid, retentions are held for months, and one late payment on a big job can squeeze the whole business.

The usual problem is that the forecast is rebuilt from the accounts after month-end. The accounts only know what has already been invoiced and paid, so by the time the forecast is ready, the first few weeks it “forecasts” have already happened. A forecast that looks ahead has to start from the jobs: when each progress claim will go out and be paid, which retentions are due back, what you’ve committed to subcontractors and suppliers and when those bills fall due, and how much each job still costs to finish.

A rolling weekly forecast, around thirteen weeks out and updated every week from your job system and Xero or MYOB, gives you a view you can act on: chase a claim, stage a purchase, talk to the bank early. It works best when WIP and the claims register are already in order, because they supply most of its inputs.

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Subcontractors: Onboarding, Committed Costs and RCTIs

For many builders, subcontractors are the biggest cost on every job, and the hardest to see in time. The paperwork starts before they set foot on site: ABN and GST details, insurances, licences, bank details and safety documents. Collected by email and retyped into two systems, details go missing and insurances expire unnoticed.

Once work starts, the money question is committed cost. A subcontract or purchase order is a promise to pay, but the accounts don’t see it until the bill arrives. If you only track what has been billed, a job can look healthy right up until a large subbie claim lands. Tracking every claim against its subcontract or order, including approved variations, shows what is still to come and catches claims that run past what was agreed.

Some businesses pay subcontractors or suppliers using recipient-created tax invoices (RCTIs), where you issue the invoice from your own records rather than waiting for theirs. The ATO sets conditions for when you can do this, including a written agreement, and our RCTI article explains them in plain English. Check your own situation with your accountant.

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Queensland: QBCC MFR Reporting and Project Trust Accounts

Queensland builders and contractors carry two extra finance obligations that lean heavily on their systems. The first is the QBCC’s minimum financial requirements (MFR). Licensees report financial information each year to show they still meet the requirements for their licence category, and the figures depend on reliable WIP, a clean balance sheet and revenue that fits the licence. When WIP lives in a spreadsheet and the balance sheet is only tidied at year end, annual reporting becomes a last-minute scramble. Our MFR article sets out the figures the QBCC asks for and when they are due.

The second is project trust accounts. On contracts covered by the scheme, the head contractor acts as trustee: a separate trust account for the contract, a trust ledger kept up to date, and regular reconciliations, with cash retentions held in a retention trust account. Which contracts are covered depends on the type of client and the contract value, the rollout was paused in 2025, and the scheme is under review. Our project trust accounts article explains who is in for 2026 and how to keep the ledger reconciled.

If your job, claims and payments data is already joined up, both become routine reporting rather than a scramble. For the rules themselves, start with the articles below, then check the current position on qbcc.qld.gov.au and with your accountant or adviser.

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Construction KPIs and Reporting

Most building businesses don’t lack reports. They lack one report that everyone trusts, ready when it is needed: which jobs are making money, what costs are still to come, and whether cash is fine for the next few weeks.

A good weekly report is short. For each job: contract value including approved variations, cost to date, committed cost, forecast cost to finish, forecast margin, and claims due or overdue. For the business: retentions held, debtors, cash for the weeks ahead and any job that has moved since last week. That is enough to run a Monday meeting that ends in decisions rather than arguments about whose numbers are right.

The report itself is the easy part. The work is upstream: costs coded to jobs on time, variations recorded, claims tracked and the job system and accounts agreeing with each other. Once that is in place, a dashboard in a tool such as Power BI can refresh itself from your systems, so nobody spends Monday morning building it. If you want to see what that looks like before talking to anyone, our construction financial visibility demo and free toolkit are good places to start.

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Procore, Buildertrend and Job Systems Connected to Xero or MYOB

Most builders run two kinds of software: a project or job system (Procore, Buildertrend or similar) for the work, and Xero or MYOB for the accounts. Each does its own job well. The trouble sits between them. Commitments, subbie bills, claims, variations and cost codes need to agree in both places, and when the connection is partial, someone retypes the rest.

Built-in connectors are worth understanding before you build anything. They usually cover part of the flow, not all of it. Procore’s official Xero integration, for example, carries the cost side well, but not the head contract side such as prime contracts and their invoices, and it links one Xero organisation to one Procore account. For a builder with one entity and simple claims, that may be all you need. For multiple entities, head contract claims in the accounts or proper WIP, the gaps have to be filled some other way.

If you’re choosing a system, residential and commercial builders tend to need different things. Whatever you choose, plan how it will connect to your accounts before you sign up, and decide which system is the master for each piece of information. Workflow automation, such as approvals, document collection and alerts, comes after that, starting with the steps that cause the most retyping.

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Trades Job Management: simPRO, ServiceM8 and AroFlo

Trades and field service businesses face the same finance questions on smaller, faster jobs. Quotes become jobs, techs log time and materials, invoices go out, and everything has to land in Xero or MYOB correctly. Apps such as simPRO, ServiceM8, AroFlo, Tradify and Fergus handle the field side, each suiting a different size of business.

The built-in accounting links send invoices, bills, payments and contacts across, so nobody retypes them. What they don’t do is reconcile the two systems for you. Timesheet corrections, split payments, supplier invoice lines and tracking categories can come across differently from how they look in the job system. For a small business with a simple setup, the built-in link is usually fine. With several cost centres, a payroll system in the middle or more than one entity, month-end needs a checklist and sometimes a proper integration.

Payroll is the other pressure point. Since Payday Super started on 1 July 2026, super has to be paid for each payday rather than each quarter, so errors in hours flow through to super within days. Keeping timesheets, award interpretation and the accounts in step every pay run is now a weekly job. And if your business has outgrown a smaller app, moving up is a project in its own right: plan the data, the cut-over and the accounting link before you switch.

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Practical AI for Builders and Tradies

AI is useful in a building or trades business when it takes over a specific, repetitive task and a person checks the result. Good examples are matching supplier invoices to jobs and orders, reading delivery dockets and subbie paperwork, turning voice notes or site diaries into a tidy daily report, and flagging costs that look out of line with the budget.

What doesn’t help: chatbots for the sake of it, tools that make decisions nobody can explain, or anything that needs your data to be in better shape than it is. AI works on the information you already have. If costs aren’t coded to jobs and claims aren’t tracked, AI will only produce wrong answers faster. That is why it usually comes after the basics in this guide, not before.

Start with one task that eats hours every week, try it on real documents with a person approving each result, and keep it only if it clearly helps.

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Where to Start

You don't need to fix everything at once. Pick the line below that sounds most like your business and start there.

  • If you don’t trust your job margins until the job is finished: Start with job costing and committed costs. See Job costing.
  • If month-end WIP takes days and nobody agrees on the numbers: Fix WIP first, then let it feed your cash flow forecast. See WIP reporting.
  • If claims, retentions or variations are tracked in emails and spreadsheets: Build one claims and retention register before anything else. See Claims and retentions.
  • If you are profitable on paper but cash is always tight: Set up a weekly forecast built from your jobs and claim schedule. See Cash flow forecasting.
  • If you hold a QBCC licence or work on contracts covered by trust accounts: Read the Queensland section and check the rules with the QBCC and your accountant. See QBCC and trust accounts.
  • If Procore, Buildertrend or a trades app is connected to Xero or MYOB but you still retype things: List what the connector carries and what it doesn’t, then fill only the gaps. See Job systems and accounts.
  • If you know something is wrong but not where to start: Book a free chat, or start with a Process & Systems Audit. See How Kenomont helps.

How Kenomont Helps

Kenomont is a small, founder-led data and systems consultancy. Aaron Chambers has more than 20 years of experience building and connecting business systems, and we work with building and trades businesses across Australia remotely. We don't sell construction or accounting software, so we can tell you honestly whether what you have will do.

Our work sits between your systems: connecting your job or project software to Xero or MYOB, setting up job costing and WIP reporting that the whole business trusts, building claims and retention registers, cash flow forecasts and weekly dashboards, and automating the paperwork that eats your team's week. Your accountant or bookkeeper keeps looking after the accounts; we make sure the numbers reach them cleanly and on time.

Every project is scoped and given a fixed quote after a free initial chat. If you know something is wrong but not where it sits, our $5,000 Process & Systems Audit maps your processes and systems and gives you a written report on what to fix first. You can also call 1300 470 091.

Frequently Asked Questions

Usually not. Most builders already have the pieces: a job or project system, Xero or MYOB, and a few spreadsheets. The problem is that they don’t talk to each other, so costs arrive late and get retyped. Connecting what you already use, and agreeing one way to code costs to jobs, often fixes more than a new system would.

Not well on their own. Xero, for example, has no built-in way to hold back retentions on an invoice or keep a claim schedule against a contract. Our article on retentions and progress claims in Xero explains when each of those is enough.

Keep it to the numbers that change decisions: for each job, contract value with approved variations, cost to date, committed costs, forecast cost to finish and forecast margin; then claims due out, claims overdue, retentions held and cash for the weeks ahead.

Queensland licensees report financial figures to the QBCC each year, and those figures depend on reliable work in progress and a clean balance sheet. If your WIP lives in one person’s spreadsheet, annual reporting becomes a scramble. Our QBCC MFR article sets out what is asked for and when; for your own licence, check qbcc.qld.gov.au and talk to your accountant.

Built-in connectors usually cover part of the picture. Procore’s official Xero integration, for example, carries the cost side (subcontracts, purchase orders, subcontractor invoices) but not the head contract side, such as prime contracts and their invoices. We look at what the connector does and only build what it doesn’t.

It depends on how many systems are involved and how much needs to be built, so we scope every project and give you a fixed quote after a free initial chat. If you don’t yet know where the real problem sits, our $5,000 Process & Systems Audit maps your processes and systems and gives you a written report with what to fix first.

Yes. Your accountant or bookkeeper keeps looking after the accounts, tax and compliance. We work on the systems and the flow of information into Xero or MYOB, so they get cleaner numbers sooner.

For specific, boring tasks, yes: matching supplier invoices to jobs, reading delivery dockets, turning site notes into a daily report, or flagging costs that look wrong. AI does the first pass and a person checks it.

Where Do Your Job Numbers Break Down?

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See also