Accounting for Construction Companies

Construction services are subject to 16% IVA. You must charge IVA on your invoices to clients, file monthly IVA declarations, and remit the net difference between IVA collected and IVA paid on materials and subcontracts. Construction in housing (vivienda) may qualify for reduced or zero IVA rates depending on the project type — we analyze this for each contract.

Yes, but only if the subcontractor provides a valid CFDI stamped by SAT. If a subcontractor cannot produce a valid CFDI, the payment is generally not deductible for ISR and the IVA cannot be credited. We validate every subcontractor invoice before you pay to protect your deductions.

Yes. Any worker under your direction — even for a single day — must be registered with IMSS before they start work. The construction sector is a high-priority audit target for IMSS inspectors. We handle daily registration and bi-weekly payroll even for workers on short-duration projects.

Clients commonly withhold 5-10% of each payment as retention until project completion. This is not income when received; it is a liability until released. We track retentions on each project and recognize them correctly at completion, ensuring your ISR and cash flow projections are accurate.

Each project should have its own cost center in your accounting system, capturing labor, materials, subcontracts, equipment, and permits separately. We set up this structure when you start with us and produce monthly job cost reports so you always know the profitability status of every active project.