I run a contracting company — do I book revenue on collection, or based on percentage of completion?

On long-term construction contracts, revenue is recognised progressively based on actual work completed (measured by output milestones or costs incurred), not when cash is collected or when the contract is signed. That means a contracting company needs accurate project-level cost tracking to calculate the completion percentage correctly, because a bad estimate distorts both recognised revenue and the tax built on top of it.

The retention amount a client withholds from each progress payment stays owed to the contractor as a receivable, and VAT on it becomes due at the earliest of three events: the work stage being completed, an invoice being issued, or payment actually being received — not the moment retention is withheld. So a contractor accounts for VAT on retention when it's earned or invoiced, not years later when the client finally releases it. RASEEKH builds the completion-tracking and retention system so the books and the filings line up.