Construction accounting terms refer to the specific set of financial and accounting rules and practices applicable to the construction industry. From day one, the construction process is driven by budgeting, forecasting and monitoring cash flow. To ensure profitability, owners must understand the cost drivers of construction— from planning and design through completion — and use good business judgement along the way. This aids proper contract management, dispute prevention, project control and financial reporting. Construction accounting provides an essential framework for understanding and tracking projects’ costs in order to keep them on budget and on time.