In construction, the business-level profit and loss is only half the story. Owners and estimators need to know how each job performed against its estimate. Contractor bookkeeping is built around job costing, careful billing records and complete subcontractor files.

Job costing

Job costing means assigning labor, materials, subcontractors and equipment costs to the job that incurred them. Done consistently, it shows which kinds of work and which customers are profitable, and it improves your next estimate. We set up jobs or projects in your accounting software and make sure purchases, bills and payroll are coded to them.

Progress billing and retainage

Many construction contracts are billed in stages, and some customers hold back retainage until the job is complete. That means the money you receive this month may relate to work done months earlier, and some of what you have earned has not been paid yet. We record invoices and retainage receivable separately, so you can see what is owed to you and when.

Subcontractor records

Contractors often pay many subcontractors during the year. The IRS page on forms for independent contractors explains that you should have each contractor complete Form W-9 and keep it on file for four years, and that you may need to file Form 1099-NEC for payments at or above the reportable threshold. We help you collect W-9s before the first payment and track subcontractor payments throughout the year, so year-end reporting is not a scramble. Our guide to employee vs. independent contractor explains how the IRS approaches classification.

Equipment and vehicles

Trucks, trailers and tools are major purchases that need asset records for as long as you own them. The IRS guidance on how long to keep records explains that property records should be kept until the period of limitations expires for the year you dispose of the property. We keep an asset list with purchase documents and financing details.

Payroll for crews

Crew payroll can involve different pay rates, overtime and job assignments. When payroll is coded to jobs, labor cost appears where it belongs. See our payroll services.

What our construction support covers

  • Job and project setup with cost coding
  • Progress billing and retainage tracking
  • Subcontractor W-9 collection and payment tracking
  • Equipment and vehicle asset records
  • Monthly financial statements and job profitability reports

Learn more about our bookkeeping services and accounting services.