As 30 June approaches, most construction businesses shift into close-out mode.

WIP gets reviewed. Claims are checked. Accounts are prepared for year-end.

That process is necessary. It is not sufficient.

The difference this year is pressure.

Margins are tighter. Cash conversion is slower. Funding expectations have not eased.

Under these conditions, small inaccuracies carry more weight.

They move through WIP, receivables and compliance, and surface later as constraints on cash, borrowing capacity, and decision-making.

Across the businesses we work with, the focus is consistent: correcting positioning before the year is finalised.

1. WIP Is Being Reassessed With Greater Discipline

WIP continues to be the most sensitive area in construction accounts.

It is also where assumptions tend to accumulate.

Cost-to-complete estimates that have not been revisited. Margins recognised ahead of validation. Projects in dispute still sitting inside group performance.

Each of these affects how the business is represented externally.

Banks, insurers and counterparties do not read WIP the same way internal teams do.

Stronger operators are addressing this directly:

• Revalidating cost-to-complete with project leads

• Removing unverified margin from current period results

• Isolating delayed or disputed projects from core performance

This produces a set of numbers that can be defended.

2. Equipment and Fleet Positions Are Being Rationalised

Over the past two years, many businesses accumulated plant and vehicles under very different conditions.

Some of those assets are no longer aligned with current utilisation.

Holding underused equipment absorbs capital and introduces ongoing cost without contributing to delivery.

At the same time, external hire is often used to fill short-term gaps.

That mismatch is now being addressed:

• Identifying underutilised assets and exiting where appropriate

• Reviewing sale-and-leaseback structures to release capital

• Aligning new purchases with current tax settings and operational demand

The objective is straightforward.

Capital should sit where it supports active work.

3. Receivables Are Being Treated as a Risk Variable

Profitability and liquidity continue to diverge across the sector.

Revenue is recorded. Cash arrives later, or in stages that extend beyond original expectations.

Older claims, variations without formal approval, and retentions all contribute to this gap.

Businesses that are managing this well are taking a stricter view:

• Reviewing all claims beyond standard payment terms

• Progressing variations through formal approval channels

• Reconciling receivables against actual project status

This is a control over how quickly work converts into usable cash.

4. Compliance Positions Are Being Cleared Early

Regulatory scrutiny has increased across multiple fronts.

HBCF thresholds. Subcontractor compliance. WHS documentation.

Issues rarely arise from a single failure. They build from gaps that were considered minor at the time.

Approaches we are seeing:

• Rechecking turnover thresholds against current project mix

• Refreshing subcontractor registers and documentation

• Ensuring WHS records reflect actual site activity

• Closing open items before EOFY processing limits flexibility

This reduces the risk of post-year-end adjustments and external queries.

5. Workforce Decisions Are Being Timed With Greater Precision

Labour remains a constraint.

Replacing key site personnel or project managers continues to carry cost well beyond salary.

At the same time, cash flow does not always support large, immediate incentives.

Operators are adjusting how incentives are structured:

• Splitting bonus payments across financial periods

• Linking incentives to completion milestones and retention

• Using non-cash benefits where appropriate

These decisions affect both retention and the timing of expense recognition.

Handled correctly, they support continuity without introducing unnecessary strain.

Closing Position

The businesses that move through this EOFY period cleanly are not working harder in June.

They have already addressed the areas where assumptions tend to sit.

WIP.

Cash conversion.

Asset utilisation.

Compliance.

Workforce positioning.

Once the year is closed, those positions are fixed.

If you want a clear view of how your current position will carry into FY27, we can work through it with you.

Directly. Without unexposed issues.

The Ark Accounting Corp.