Accounting for contractors and trades
Construction money moves in lumps: a deposit lands, materials go out, retainage sits unpaid for months, and the bank balance tells you almost nothing about whether the year is working. We keep contractor books on a job basis so you can see which work actually earned, not just what cleared.
What this trade does to a set of books
The bank balance lies
A healthy balance is often just a deposit on work you have not done yet. Progress billing and deposits have to be tracked against the job, or you spend money you have already committed to materials and labor.
Job costing gets skipped
Without labor, materials, subs, and equipment coded to the job, every project looks equally profitable. It usually is not, and the loser is often the one you keep bidding on.
Retainage disappears
Five or ten percent held back across several jobs adds up to real money that never gets chased because nobody is tracking the balance owed per contract.
Subcontractor paperwork lands late
Missing W-9s surface in January when 1099s are due, which is the worst possible time to be chasing a sub you no longer work with.
Included for contractors and trades
- Job costing, so each project shows its own margin
- Progress billing and deposits tracked against the contract
- Retainage receivable tracked per job and chased
- Subcontractor W-9 collection and annual 1099 filing
- Equipment purchases and depreciation handled correctly
- Sales and use tax on materials where your state charges it
Asked by owners in this trade
How do I know which jobs are actually making money?
Every cost has to be coded to a job as it happens: labor hours, materials, subcontractors, equipment, and permits. Once that is in place, each project shows its own revenue, cost, and margin, and the pattern usually becomes obvious within a quarter. Most contractors find that one category of work they assumed was profitable is carrying the lowest margin, and it is almost always the one with the most unbilled change orders.
What is retainage and why does it matter to my books?
Retainage is the percentage a customer holds back until a job is complete, typically five to ten percent. It matters because it is revenue you have earned and cannot spend, and because it is easy to lose track of across multiple contracts. Booked properly it sits as a receivable against each job, so you know exactly what is owed and can chase it when the work closes.
Do I need to file 1099s for my subcontractors?
Generally yes, for unincorporated subcontractors you paid $600 or more during the calendar year. The practical difficulty is not the filing, it is having a completed W-9 on file for every sub before you need it. Collecting the W-9 before the first payment goes out, rather than in January, is what makes the deadline routine instead of a scramble.
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