Job Cost Reporting Setup for AU Construction: The Active Project Register

May 27

7 min read

Updated: 6 days ago

By Rami Rajkumar, CPA, Founder & Partner, TechEdge Accounting. Updated 15 October 2026.

In short. Job cost discipline works best when it starts on day one of a project, not when someone notices the margin has gone in month eight. The active project register is the backbone. Five habits keep it honest:

Tag every supplier invoice to a project when it's entered.
Tag every subcontract invoice when it's entered.
Timesheets put every hour against a project.
Materials are allocated to a project at invoice entry.
Forecast final cost is updated monthly with variance notes, and project managers see it before the management pack goes out.

The reporting layer that makes the books defensible

Revenue recognised over time under AASB 15 is only as good as the job cost data behind it. If costs are miscoded, allocation rules have drifted or the project register is stale, the revenue numbers are wrong too.

This is what separates a construction business with a reliable monthly close from one that's guessing. Owners know which project is making money. Bookkeepers know where each cost belongs. Project managers can back up their cost to complete when the bank asks.

Here's how we set up job cost reporting in our Financial Controller engagements: the project register, the cadence, the reconciliations and the reports that go into the monthly management pack.

What the active project register needs to track

For each project, every month:

Project code and a plain English project name
Client name and head contractor, if relevant
Bid value: the original contract value, ex GST
Approved variations: running total of variations formally approved with a price
Pending variations: running total of variations submitted but not yet approved. Keep these separate, because AASB 15 has its own rules on when unapproved changes can count towards revenue
Dayworks accrued: work done on the head contractor's instruction but not yet invoiced
Cost incurred to date, split by labour, materials, subcontract, plant and allocated overheads
Cost to complete: refreshed monthly by the project manager and signed off
Forecast final cost: cost incurred plus cost to complete
Forecast margin at completion: bid plus approved variations plus accrued dayworks, less forecast final cost
Variance from bid margin, so you can spot projects sliding away from plan
Practical completion target date
Retention released to date and retention still held

That's the one page per project record. Run it in Excel, Procore, Buildertrend, Workbench or whatever system you use. The format matters less than keeping it current.

The cadence: daily, weekly, monthly, quarterly

Daily: cost capture

Every cost is captured the day it's incurred, or the day the invoice arrives if that's earlier. Labour hours, materials, subcontractor invoices, plant hire, fuel and site overheads.

Cost capture is part of the day's work, not a Friday afternoon job or a month end scramble. If your bookkeeper codes a whole week in one sitting, accuracy suffers.

Weekly: daywork reconciliation and timesheets

Every Monday morning:

Last week's daywork sheets are signed off, coded to the right project and sent to accounts receivable for invoicing
Labour timesheets are approved and posted to projects
Subcontract invoices from the past week are checked against delivered work and coded
Plant hire over or under use is flagged

The weekly check catches small problems before they turn into month end surprises.

Monthly: register update and WIP reconciliation

On the last working day of the month, before close:

Project managers refresh cost to complete for each active project and record it in the project file.
The project register is updated with the month's costs, variations and dayworks.
Finance reconciles the job cost system to the general ledger. Total costs by project should tie.
Revenue journals are posted using the WIP reconciliation (see Construction WIP Reconciliation).
Retention is split out on each progress claim raised.
Allocated overheads move from clearing accounts to projects under the allocation policy.
Sign off: preparer and reviewer initial the worksheet.

Quarterly: variance commentary

Every three months, any project whose forecast margin has moved more than 2 percentage points from bid gets a written note in the project file: what changed, what caused it and what's being done.

That note is what your auditor will ask for when they sample projects with margin movements.

Cost categories that need clean separation

Your chart of accounts should split costs by category for each project. At a minimum:

Direct labour: site labour and supervision you can tie to a project
Materials: direct materials charged to the project
Subcontract: kept separate from direct labour because retention and contract terms differ (see our construction accounting guide)
Plant and equipment: depreciation on owned plant, hired plant, fuel and maintenance
Site overheads: security, temporary services, traffic management, site office
Allocated overheads: a share of indirect labour, head office costs and insurance, allocated under your policy

Category level margins show where you're winning or losing. If labour is 8 points over bid but materials are on plan, the problem is productivity, not purchasing.

Overhead allocation: the easy one to get wrong

Indirect labour, head office costs, insurance, leases and depreciation on shared equipment should be allocated to projects every month. Otherwise they sit in clearing accounts and project margins look better than they are.

Pick one allocation basis and write it into your policy:

Direct labour hours: the most common. Each project takes a share of overheads in line with its labour hours for the month.
Direct labour cost: similar, but weighted by pay rates, so it reflects skill mix.
Total direct cost: a share in line with all direct costs charged to the project.
Revenue: a share in line with revenue recognised. Less common, but reasonable where margins are stable.

Whichever you choose, apply it consistently. Switching methods at year end to get cleaner numbers is the kind of thing that worries auditors.

The reports that feed the management pack

Four reports come out of the project register each month.

1. Project register snapshot

One page per active project: bid, variations, forecast and margin. The owner should be able to read it in a minute before the weekly leadership meeting.

2. Margin chart

Projects along the bottom, forecast margin up the side. Green for projects on plan, amber for more than 2 points off, red for more than 5 points off.

3. Variation register

A live list of every variation: number, date raised, value, status (approved, pending or disputed), date approved, date invoiced and date paid. Reconcile it monthly. Any approved variation more than 30 days old and still not invoiced goes to finance.

4. Client concentration

Revenue or backlog by head contractor. If one head contractor makes up a large share of your work, expect your bank to ask about it at the facility review.

Systems we see working

For businesses turning over between $5M and $50M:

Xero with Xero Projects: fine for smaller operators with simple projects. Cost to complete tracking is limited, so expect manual reconciliations.
Procore: common with mid to large builders. Cost to complete, variation and daywork tracking built in, and it connects to Xero, NetSuite or Sage for the ledger.
Buildertrend: popular with residential and small commercial builders, with job costing, scheduling and change orders built in.
Workbench: an Australian product that suits civil contractors well.
NetSuite with a projects module: for larger, multi entity groups. A big implementation, but the most complete.

Let your cost to complete and variation tracking needs drive the choice. Xero on its own can give you a clean monthly close, but it won't give your auditor the cost to complete records that revenue over time relies on.

Common job cost mistakes

Mistake 1: project codes without cost categories

There's a project code in the ledger, but costs aren't split by category under it, so you can't see where margin is going.

Fix: set up the chart of accounts with labour, materials, subcontract, plant and overhead categories under each project.

Mistake 2: overheads left in clearing accounts

Overheads build up each month but never reach a project, so project margins look better than they are.

Fix: a monthly allocation journal based on your written policy.

Mistake 3: stale cost to complete

The project manager hasn't updated it in three months, so revenue recognition drifts.

Fix: make project manager sign off part of the monthly close timetable.

Mistake 4: no variation register

Variations get lost between site and the office, and unbilled revenue builds up.

Fix: a live register reconciled monthly. Our construction accounting guide shows how to structure it.

Mistake 5: daywork sheets left to pile up

Sheets from several weeks get processed together. Some go missing and some land on the wrong project.

Fix: a fixed Monday morning daywork reconciliation.

When to bring in a CPA

A good bookkeeper can run the daily and weekly routine once they have a clean chart of accounts and a project register template. The CPA work is:

Setting up the chart of accounts with project sub accounts
Writing the overhead allocation policy (which method, why and how it's applied)
Reviewing cost to complete estimates each month so they hold up
Reviewing the quarterly variance notes
Refreshing the policy each year as the project mix changes

Quick summary

Keep an active project register, one row per project, updated monthly.
Split costs into labour, materials, subcontract, plant and overheads.
Capture costs daily, reconcile dayworks weekly, update the register monthly and write variance notes quarterly.
Have the project manager refresh cost to complete every month.
Allocate overheads to projects monthly under a written policy.
Keep the variation register current, because unbilled variations are easy money to lose.
Use the register for the monthly management pack and for AASB 15 revenue.

Talk to a CPA

We set up project registers, overhead allocation policies and monthly job cost reporting as part of our Financial Controller engagements (from $4,950 a month). Most construction clients come to us at this point when they're running three or more projects at once without a clean job cost system.

Book a free 30-minute call with a CPA, email info@techedgeaccounting.com.au or call +61 468 634 973.

This article is general information only and is not financial, tax or legal advice. Accounting treatment depends on your contracts and circumstances, so speak to your adviser before acting.

About the author

Rami Rajkumar, CPA is the founder of TechEdge Accounting in Hawthorn, Victoria, an outsourced finance office for Australian construction, EPC, solar, renewables and carbon businesses. Take the 5-minute Maturity Audit