A specialized contractor bookkeeper handles the normal monthly work (reconciliations, a month-end close, AR and AP), plus the construction-specific pieces: job costing, payroll allocated to jobs, work-in-progress (WIP) reporting, draws and retainage, subcontractor cost tracking, and making sure your job management software and QuickBooks agree.
Contractors can hire a general bookkeeper, and the books will usually balance. The problem is that balanced books don't answer the questions contractors actually ask: Which jobs made money? Are we over-billed or under-billed on the big project? Why was last month profitable when the bank account says otherwise? Specialized contractor bookkeeping is built around those questions.
The foundation: monthly bookkeeping done properly
- Categorizing bank and credit card activity
- Reconciling every bank, card and loan account to its statement
- A structured month-end close, done the same way every month
- Reviewing accounts receivable and accounts payable
- Reviewing the balance sheet, not just the profit and loss
Job costing
Job costing ties direct costs (labor, materials, subcontractors and equipment) to the job that incurred them, so job gross profit is a real number instead of an estimate. Most job costing fails in the monthly work rather than the setup: a materials receipt coded to general expenses or a supplier bill split across jobs incorrectly moves profit from one job to another. A contractor bookkeeper reviews job cost coding every month.
Payroll allocated to jobs
Labor is often the largest job cost, and it's the one most often left unallocated. A contractor bookkeeper uses hours or crew data from your payroll provider or job software to allocate labor to each job, so job reports reflect what the work really cost.
Work-in-progress (WIP), draws and retainage
On projects that span more than a month, billing and costs rarely move together. A WIP schedule compares costs incurred and billings against the contract to show whether each job is over- or under-billed, which keeps profit from being overstated early or understated late. Draws are tied to contract value, and retainage receivable and payable are tracked until they're collected or paid. Lenders and bonding companies often ask for this.
Subcontractor costs
Subcontractor bills are coded to the job they belong to, and retainage payable to subs is tracked. Keeping subcontractor records organized also makes year-end reporting easier for you and your CPA.
Keeping job software and QuickBooks in agreement
Most contractors run on job management or estimating software such as Knowify or Jobber. That software and QuickBooks need to agree on customers, invoices, payments and job costs. A contractor bookkeeper checks that what flows from your job software into QuickBooks, whether by built-in sync or monthly entries, is coded correctly and matches.
Reporting you can act on
The payoff is reporting by job: contract value, revenue and costs to date, job gross profit, budget remaining and forecast profit, while the project is still open and you can still act on it.
What they don't do
A bookkeeper keeps your records accurate and reconciled all year. Tax preparation and tax planning stay with your CPA or EA. A good contractor bookkeeper works alongside them and hands over clean books at year end.
How Bookkeepers Lane works with contractors
We set up job-level structure in QuickBooks Online, close the books every month with a review of job cost coding, track WIP, draws and retainage where they apply, and build job-profitability dashboards on your QuickBooks data. Open our contractor demo to click through an example built on fictional data, or start with a free Books Review.
Want to see what this looks like for your business?
Every engagement starts with a free Books Review of your current books and QuickBooks structure — what’s working, what isn’t and what to do next.