Contractors, remodelers and trades
Bookkeeping for contractors and trades
A contractor can be busy and still lose money on a job. The books should show profit by job while the work is still going, not after the final invoice.
Matthew Coleman, QuickBooks ProAdvisor, accounting and finance degree. Cranford, NJ. Start with a free health check of your books. You get a quote after we review your books, before any work starts.
Why contractor books go wrong
Money moves in pieces: a deposit up front, progress payments, retainage held back, change orders. Materials land on one card, labor on payroll and subs on checks. Without a job on every cost, the profit and loss only says how the whole year went.
Job costing
Every material, labor and subcontractor cost is coded to a job. Each job shows what was quoted, what has been billed, what has been spent and what is left. That makes it clear early when a job is running over.
Deposits, progress billing and retainage
A deposit is not income yet, and neither is every progress payment. How you treat each depends on your accounting method and your CPA's advice. We set up the accounts so deposits, billings and retainage are tracked separately and easy to explain.
Subcontractors and workers
Keep a signed W-9 and an invoice for every sub, and track what you pay each one. Whether a worker is an employee or a contractor is a legal question, and New Jersey has its own test. Read the guide linked below and ask your tax professional or attorney.
What a month looks like
Bank and card feeds are reconciled, each cost is matched to a job, payroll and sub payments are checked against the paperwork, and you get a short report by job. The work happens online in your own accounting file.
Related
- Contractor and restaurant books setup
- NJ independent contractor rule guide
- Signs a job is losing money
- Bookkeeping health check
- Bookkeeping guides
- Bookkeeping projects
General information, not legal or tax advice. Rules change; confirm with the agency, lender or your professional. Updated October 2026.
FAQ
Common questions
Can you track profit by job?
Yes, once costs are coded to jobs. Setting that up is the first step.
Do you handle payroll?
We keep the books for payroll your provider runs and check them against the reports. We do not run payroll.
How do you treat deposits and retainage?
We track them in separate accounts and follow the method your CPA chooses. We do not choose it for you.
Do you prepare 1099s?
We keep the vendor information and payment totals in order. Your tax professional decides who gets one.
Can you work in my QuickBooks file?
Yes, or we can help you set up a new one.
Excel workbook
Contractor Estimating and Job Costing Workbook
Price with a target margin, track costs as they happen and see which jobs make money.
See what is inside ($39) Try the free starter
Also in the Contractor Business Bundle: 4 products for $89 instead of $126 separately.