What bookkeeping services does a construction company need?
A construction company needs job costing, accurate progress billing and retainage tracking, subcontractor payments with 1099 records, equipment and vehicle expenses, and monthly reconciliation of every bank and card account. SmartGrowth Bookkeeping sets these up in QuickBooks or Xero so each job shows its own income and costs, your CPA gets clean year-end books, and you can see which jobs actually made money before you bid the next one.
- Job costing: every material, labor and subcontractor cost tied to a job
- Progress billing: invoices that follow the schedule of values or draw schedule
- Retainage: amounts customers hold back, tracked until they are paid
- Subcontractor records: W-9s on file, payments tracked for 1099-NEC forms
- Equipment, trucks and fuel: recorded so you know what your fleet costs
- Reconciliation of every bank account and credit card, every month
Retainage is where many contractors lose track of real money. If a customer holds back part of each invoice until the job is finished, that amount is still owed to you. SmartGrowth keeps it on its own line so it is collected, not forgotten.
Ask every subcontractor for a W-9 before you pay them. Form 1099-NEC is due to contractors and the IRS by January 31, and the reporting threshold changed for payments made from 2026 on, so confirm the current figure with your CPA. Our guide on 1099 forms for contractors covers the details.
Can a bookkeeper track expenses and profitability for individual projects?
Yes. A bookkeeper can track each project by tagging every sale, material purchase, subcontractor bill and labor cost to the job it belongs to. SmartGrowth Bookkeeping uses projects, classes or tracking categories in QuickBooks or Xero, so you get a profit report per job, compare estimate to actual, and spot overruns while a project is still running, not months after the final invoice.
| Cost type | How it reaches the job | What to watch |
|---|---|---|
| Materials | Supplier bills and card charges coded to the job | Returns and leftover stock moved to the right job |
| Subcontractors | Each sub bill assigned to its job | Change orders billed to the customer, not absorbed |
| Field labor | Payroll hours allocated by job from your timesheets | Unbilled labor on time-and-material work |
| Equipment | Rental and fuel costs coded to the job when possible | Owned equipment costs spread fairly |
| Overhead | Kept separate from direct job costs | Overhead rising faster than revenue |
Consider a remodeler running three kitchens at once. Without job costing, the month shows one profit number. With it, the owner sees that two kitchens are on budget and the third has absorbed a change order that was never billed. That is a phone call to the customer, not a loss.
The same approach works for smaller trades. See our page on bookkeeping for service businesses if your jobs are shorter and more frequent.
How SmartGrowth helps
Job costing
Materials, labor, subcontractors and equipment tied to each project in QuickBooks or Xero.
Progress billing and retainage
Draws and progress invoices recorded correctly, with retainage tracked until it is collected.
Subcontractor and 1099 records
W-9s tracked and payments to subs organized for 1099-NEC preparation support.
Equipment and vehicle costs
Trucks, fuel, rentals and tools recorded so you know what your equipment really costs.
Monthly reconciliation
Every bank account and credit card reconciled, including the cards your crew leads carry.
Job profit reports
Estimate vs. actual by job, plus a monthly profit and loss and balance sheet.
Why contractors lose track of profit
Construction cash moves in large, uneven amounts. A deposit lands for one job while you are paying suppliers for another, so the bank balance says very little about whether any single job is profitable.
- Materials bought for one job end up on another
- Change orders are done in the field and never invoiced
- Retainage sits uncollected after the punch list is finished
- Personal and business purchases share one card
- Bids are based on last year's guesses instead of last year's actual job costs
Monthly job costing fixes each of these. The point is not paperwork; the point is bidding the next job with real numbers from the last ones.
When a job finishes, review its final numbers against the estimate before the next bid goes out. A few minutes with that report shows whether your labor, material or markup assumptions need to change.
Payroll, lenders and your CPA
SmartGrowth records payroll from your payroll provider and allocates crew wages to jobs, and tracks contractor payments for year-end forms. Our payroll and contractor records service explains how that fits with the provider you already use.
Bonding companies, equipment lenders and banks want current, reconciled financial statements. If you are applying for a line of credit or an equipment loan, loan-ready financial statements give them what they ask for. At year end, your CPA receives books with every job closed out and every account reconciled.
More questions
My jobs are all mixed together in one account. Can you separate them?
Usually, yes. Using invoices, supplier bills and your job list, past transactions can be assigned to the right projects. It takes more work the further back you go, so most contractors start with the current year and open jobs.
Do you work with general contractors and specialty trades?
Yes. The structure is the same for a general contractor, a roofer or an electrician: income and direct costs by job, overhead kept separate. A specialty trade with many small jobs may track by job type instead of by individual job.
Can you help if I have fallen behind on my construction books?
Yes. SmartGrowth can catch up the missing months first and set up job costing as part of the same work, so the books are current and organized by job when the monthly routine begins.
Is QuickBooks or Xero better for job costing?
Both can track income and costs by job: QuickBooks with projects or classes, Xero with projects or tracking categories. The right choice depends on how you invoice, which apps your crew uses and what your CPA prefers. SmartGrowth works in both and sets up whichever fits.