Give each allowance an identifiable record
Record what the allowance covers, its amount, whether taxes or installation are included and the relevant contract terms. Supplier quotes should show the actual selected product and delivery cost. Where the scope is unclear, resolve it with the customer and appropriate adviser before the bookkeeping assumes an answer.
Use the same project reference on the customer approval and purchase order. Keep a date and version for selections that change. A screenshot of a product page may help identify an item, but it does not replace an accepted change or a supplier invoice. CRA recordkeeping guidance includes invoices and related correspondence as source documents; retain those originals with the job record.
Illustrative example: a fixture and delivery change
A Victoria renovator includes a $2,400 fixture allowance before taxes and installation. The selected items cost $3,050 on the same basis, a $650 difference. A separate $160 delivery charge raises the additional direct cost to $810. The invoice treatment must follow the agreement and approved change.
If the contractor only records the $650 selection difference, the delivery cost remains in the job with no explanation of whether it should be billed or absorbed. A complete change schedule presents both amounts to the person approving the customer invoice.
Keep returns and replacements visible
A returned item may leave an old invoice, a new invoice and a credit arriving in a later period. Link all three instead of recording the replacement as the only purchase. Identify any restocking charge and who approved it. This prevents a temporary double cost from becoming a permanent error.
The project forecast should also show committed items not yet invoiced and any expected installation change. A more expensive product may require additional labour, but that should be confirmed with the operating team rather than inferred automatically from its price.
Review the change at project close
Compare the original allowance, final direct cost and amount actually billed. Explain the difference: approved upgrade, freight, restocking, estimating error or uncharged scope. Those explanations help the owner improve future allowances and the timing of customer decisions.
Keep bookkeeping support separate from legal interpretation of the construction agreement. Contract rights, statutory obligations, holdbacks and disputes require the appropriate legal review. The bookkeeping file should retain the dates, approvals and amounts that make that review possible. A clear job report then shows the commercial outcome without pretending that an accounting category determines who must pay.
Put this into practice
Sources and current guidance
A practical next step
Bring the records you have.
We can identify missing information, agree on the scope and organize the next bookkeeping step.
Request a bookkeeping review