Construction Accounting in Albania: Costs, Progress Billing and Records

In construction, a company can run several sites at once, with dozens of suppliers and payments arriving months after the work. Without construction accounting split by project, it’s hard to know which site makes money and which loses it.

Split costs by project

• Open a cost centre for each site or contract.
• Book every materials invoice, machinery hire or service to the right project.
• Allocate workers’ hours and payroll costs to the site where they worked.
• Share overheads (office, administration) using a consistent rule.

This lets you compare actual cost with the estimate and see early when a project is going over budget.

Document progress billing and subcontractors

• Progress claims (situacione) should be backed by the bill of quantities, measurement records and confirmation from the client or supervisor.
• Invoicing follows the confirmed claim and the contract. Keep the same figures in the claim, the invoice and the books.
• Subcontractors should have a written contract and invoice properly. When you pay a non-resident contractor for construction, installation or assembly work, the payment may be subject to 15% withholding tax.
• Retentions held by the client are recorded separately as receivables so they aren’t forgotten.

Watch cash flow ahead of payment deadlines

Builders often pay for materials and wages before a progress claim is collected. A monthly cash-flow forecast for each project shows:

• when claims and retentions will be collected;
• when supplier, payroll, VAT and contribution payments fall due;
• whether you need a credit line or an advance from the client.

Considering financing? Read what banks ask for in a business loan.

Mistakes to avoid

• All costs in one pool, with no split by site.
• Claims invoiced without confirmation or differing from the contract.
• Workers on site without a contract or registration.
• Forgetting retentions until the end of the project.

FAQ

When is revenue from a construction contract recognised?

Under accounting standards, usually by stage of completion, not only when cash is received. The treatment should match the contract and the progress claims.

Do I need a licence for construction work?

Yes, many categories of work require a professional licence. Check before bidding for tenders or contracts.

Abacus for construction companies

We split costs by site, track progress claims and prepare cash-flow forecasts. See our construction services or contact us.

This article is for general information and is not a substitute for professional advice on your situation. Sources: Law No. 25/2018 on Accounting and Financial Statements; Income Tax Law No. 29/2023 (Articles 58, 59).