The Job Close-Out & Final AR SOP (How to Actually Close a Restoration Job in Your Books)

Most restoration companies think a job is "done" when the equipment comes off the truck. That is one definition of done — and it is the least important one for your books. A job has four different completion states, and they are not the same event: physical work done, paperwork done, billed in full, and paid in full. A fifth gate — closed in the books — follows once those four are met. The danger is that a job can sail through gate one (everyone's happy, crew's gone) and silently sit unbilled, uncollected, and open in your accounting system for months.

This SOP is the administrative procedure for driving a single restoration job through all five gates. It is written so a new ops coordinator or office manager can execute it without supervision. It assumes a QuickBooks Online class/project setup and an Xactimate estimate, references the IICRC S500 drying standard for the documentation certification, and feeds directly into your monthly books close. Budget about two hours of office time per job, not counting the days you wait on a carrier check.

Prerequisites

• QBO access at full-user or admin level, with class tracking and Projects (or sub-customers) already enabled.
• The job's Xactimate estimate (current approved version, including supplements) and the ability to export the ESX/PDF.
• Carrier correspondence: the EOB/remittance for the ACV payment, supplement approvals, and any depreciation-release notice.
• The field documentation: photos, daily moisture/atmospheric logs, signed authorizations, and the equipment log.
• Working knowledge of ACV vs RCV, recoverable depreciation, deductible, and supplements and how they flow into AR.
• Your company's AR policy: statement cadence, escalation contacts, and the write-off threshold/approval rule.

Materials & Tools Required

| Item | Purpose | Example / Path | | --- | --- | --- | | QuickBooks Online (full/admin) | Invoicing, AR, project status, job P&L | Sales, Banking, Projects | | Xactimate license | Final estimate + supplement reconciliation | ESX export, estimate PDF | | Signed completion certificate | Releases physical state, supports billing | Customer signature | | Carrier remittances / EOBs | Verify ACV, depreciation, supplement payments | Claim file | | Moisture / atmospheric log | Certify IICRC S500 drying goal met | Daily readings sheet | | AR aging + statement template | Collections cadence and escalation | QBO Reports > A/R Aging | | Document management system | Archive the master job file | Read-only retention folder |

Phase 1 — Physical Close-Out (Gate 1)

Phase 2 — Documentation Final Package (Gate 2)

Phase 3 — Final Billing (Gate 3)

Phase 4 — Collection Follow-Up (Gate 4)

Phase 5 — Job Profitability Review

Phase 6 — Books Close-Out (Gate 5)

Common Mistakes

1. Calling a job "done" at equipment pickup. Gate 1 is the easiest and least financially meaningful state. Jobs that stop here age in AR and WIP unnoticed.
2. Never billing the depreciation release. ACV gets collected, the file goes quiet, and the recoverable depreciation — sometimes 20–30% of the job — is never invoiced because no one tracked the release.
3. Netting the deductible against carrier AR. This hides a real customer-collection task and makes both the carrier and customer balances wrong.
4. Unbilled approved supplements. Field identifies the scope, the supplement gets approved, and it never makes it onto a QBO invoice. Pure margin lost.
5. Deleting invoices instead of writing them off. Deleting erases revenue history and breaks period reporting. Always use a Bad Debt credit memo with approval.
6. Closing the project before AR is zero. A closed project with an open balance is invisible to collections and silently uncollectible.
7. Thin documentation packages. Missing photos and uncertified moisture logs cause short-pays and denials that look like collection problems but are documentation problems.
8. Skipping the profitability review. Without the final P&L and variance log, the same mispricing repeats job after job.
9. Letting costs land after close. A late sub bill coded to a closed job distorts the locked P&L and the period's margin.
10. No single attestation. When no one signs off, every gate gets "mostly" done and nothing is actually closed.

How to Adapt This SOP for Your Company

Universal — keep as written: the five-gate model, the four-states reference table, billing the depreciation release and supplements, the zero-balance check before closing the project, COGS allocation by class, and the final attestation. These hold for any restoration company on QBO + Xactimate.

Company-specific — tune these: the exact AR cadence and escalation ages (carrier-heavy vs cash-customer mixes differ); the write-off threshold and approval authority; your variance tolerance in Step 22; your supplement-capture target in Step 23; retention periods in Step 10; and whether you use QBO Projects or sub-customers. If you run Symbility instead of Xactimate or a vertical platform like Albi or DASH, the estimate-export step changes but the gates do not.

Frequently Asked Questions

What does it actually mean to close a restoration job?

A job is fully closed only when all four completion states are met: physical work done, documentation complete, billed in full, and paid in full — and then locked in the books. A job can be physically finished and still be open in three of those states. True close-out means revenue is locked, COGS is allocated, AR is zero, and the project is marked closed in QuickBooks.

What are the four states of job completion?

Physically complete (work done, equipment pulled), documentation complete (signed package and logs archived), billed (RCV, depreciation, supplements, and deductible all invoiced), and paid (collections finished, balance zero). Books close-out is the fifth gate that follows once the first four are met.

How long should it take to close out one restoration job in the books?

Plan on roughly two hours of office time per job, spread across documentation assembly, final billing, profitability review, and the books close-out steps. Physical demob and collections happen on their own timelines; this SOP times only the administrative close, not the days you wait on a carrier check.

How do I bill recoverable depreciation on a restoration job?

Recoverable depreciation is held back by the carrier on ACV settlements and released after you submit final documentation proving the work was completed. Invoice it as a separate line tied to the same claim once the carrier issues the depreciation-release payment, and apply it against the RCV total so the job nets to full replacement cost value.

What is the difference between ACV and RCV at job close-out?

ACV (actual cash value) is the depreciated amount the carrier pays up front; RCV (replacement cost value) is the full cost once the held-back depreciation is released. At close-out you must bill and collect both pieces — the ACV payment and the recoverable depreciation — or the job will look underpaid when it is actually just incomplete on billing.

When can I write off an uncollectible restoration receivable?

Apply a written threshold and approval rule — for example, balances under a set dollar amount aged past 120 days can be written off with manager sign-off, while larger balances require owner approval and a documented collection trail. Record the write-off to a bad-debt expense account, not by deleting the invoice, so the revenue history stays intact.

How do I handle a mortgage company holding the insurance check?

Mortgagee-endorsed checks require the homeowner and lender to sign before funds release, which can take weeks. Track the check as a held receivable, follow the lender's inspection/draw process, and do not mark the job paid until the endorsed check clears. Keep the hold flagged in AR so it does not look like a collections failure.

How do I run a final job profitability review?

Pull the completed job's P&L by class, compare actual cost to the original and supplemented estimate, then break margin into labor, materials, equipment, and subcontractors. Score your supplement capture rate, log the biggest variance driver, and feed that lesson into your next estimate. See our job-level P&L SOP for the read order.

What is supplement capture rate and why does it matter at close-out?

Supplement capture rate is the dollars of approved supplements you actually billed divided by the dollars of scope you identified in the field. A low capture rate means real work is being given away. Measuring it at every close-out turns supplement leakage into a tracked metric instead of a silent margin loss.

Should I close a job before the deductible is collected?

No. The deductible is part of the billed and paid states — until the customer-owed portion is collected or formally written off, the job is not fully paid and should not be marked closed in the books. Invoice the deductible to the customer at billing, not to the carrier, so net carrier AR stays accurate.

How do I make sure no costs hit a job after I close it?

Before closing, verify all subcontractor bills, equipment-day charges, and material receipts are posted to the job class, then set the QBO project status to closed so new transactions are not coded to it. Run a job cost report one billing cycle later to catch any stragglers and reopen only to correct them.

What should I flag for my CPA when closing jobs at year-end?

Flag revenue-recognition timing for jobs that span the year-end, any retainage or held depreciation not yet released, and all write-offs taken during the period. Note jobs billed but uncollected at December 31 so your accrual-basis revenue and AR tie out for the tax return.

How do I confirm a job met IICRC S500 drying standards before close-out?

Review the daily moisture and atmospheric log to confirm affected materials reached the established drying goal — typically the dry standard set from unaffected reference readings — before equipment was pulled. Certify the log in the file so the completion package defends both the work and the billing. See our certifications glossary for the S500 reference.

Can a job be physically done but still open in my books?

Yes — that is the core trap this SOP solves. A job can have all equipment pulled and the customer happy while still being unbilled, uncollected, and not closed in the books. Tracking the four states separately keeps physically finished jobs from silently aging in AR and WIP.

What report tells me my jobs are truly closed?

Run an AR aging report and an open-project/WIP report together. A truly closed job appears on neither: it has a zero AR balance and a closed project status. Any job missing from one but present on the other is stuck in a completion state and needs attention before the monthly books close.

Key Takeaways

• A restoration job has five gates, not one: physically complete, documentation complete, billed, paid, and closed in the books. Equipment pickup only clears Gate 1.
• The biggest money sits in Gate 3: recoverable depreciation and approved supplements are routinely never billed. Catch them every time.
• The deductible is a customer receivable; never net it against carrier AR, and never close a job before it is collected or written off.
• Write off uncollectible balances with a Bad Debt credit memo and approval — never by deleting the invoice.
• Every closed job gets a profitability review: final P&L vs estimate, supplement capture rate, and margin by cost category, with a logged lesson.
• A job is closed only when revenue is locked, COGS is allocated, the project status is Closed, year-end notes are tagged, and someone has signed the attestation into the monthly close.

Related reading: Monthly Books Close SOP · Equipment Tracking & Recovery SOP · How to Read a Job-Level P&L · Hidden Profit Leaks in Restoration Companies · Complete Guide to Job Costing for Restoration & Mitigation · Restoration Insurance Glossary