Monthly bookkeeping for contractors: job costing by cost code, progress billing, retainage, WIP and lien waiver tracking, closed every month and reviewed by a construction CPA firm. QuickBooks or Sage. English or Spanish.
Free 30-Minute ConsultationConstruction bookkeeping keeps a contractor's books the way the business actually earns money: by job. Every cost is coded to a job and a cost code, billing follows the schedule of values, retainage is tracked separately on both sides, and the books tie to a monthly WIP schedule. Xtrategist provides it to Atlanta contractors as a monthly service, with a CPA reviewing every close.
Construction bookkeeping exists because a contractor's month doesn't look like anyone else's. A typical small business sells something, collects for it and moves on. You're billing a percentage of the work on five jobs at once, holding money back from subcontractors while your customer holds money back from you, and carrying costs on a job that won't be billed until next month.
A generic bookkeeper can record all of that correctly and still leave you without the answer you need most: is each job on budget right now, while there's still time to fix it? That's the gap our construction bookkeeping service is built to close. For the step-by-step monthly checklist, see our guide to construction bookkeeping. This page covers what the service includes and how it runs.
Every invoice, subcontractor bill, equipment charge and labor hour coded to a job and a cost code, so a job report shows labor, materials, subcontractors and equipment against the estimate, line by line.
Monthly billings built from the schedule of values and the percentage of each line completed, timed to your customer's pay cycle so cash doesn't wait an extra month.
Many owners and general contractors ask for the AIA G702 Application and Certificate for Payment with its G703 Continuation Sheet. We prepare the numbers behind it from your books, so the pay application matches the ledger.
Retainage your customers hold and retainage you hold from subcontractors, tracked by job in their own accounts. More in our retainage accounting guide.
A monthly work-in-progress schedule that ties to the general ledger and shows over-billings and under-billings by job.
On federally funded or assisted jobs, covered contractors submit payroll information weekly with a signed Statement of Compliance. We don't process payroll; we oversee it and check that the reports tie to payroll records and job costs. Background in our certified payroll guide.
A waiver log by job and by subcontractor or supplier, checked against accounts payable before a payment goes out, so nobody gets paid without the paperwork that protects you.
Payroll taxes, insurance and benefits allocated to jobs, so a crew hour on the job report reflects what it really costs. Here's why labor burden matters.
One month on one job shows why retainage needs its own accounts. Take a $500,000 contract that holds 10% retainage. At the end of month three the project manager reports the work 40% complete on the schedule of values, and earlier pay applications billed $120,000 of work.
| Pay application line | Amount | How it's calculated |
|---|---|---|
| Contract sum | $500,000 | Per the contract |
| Work completed to date | $200,000 | $500,000 × 40% |
| Retainage held to date | ($20,000) | $200,000 × 10% |
| Earned, less retainage | $180,000 | $200,000 minus $20,000 |
| Previous payments requested | ($108,000) | $120,000 minus 10% retainage |
| Current payment due | $72,000 | $180,000 minus $108,000 |
These are the same lines a G702 pay application walks through. In the books, this month's billing is $80,000 of work ($200,000 minus $120,000), but only $72,000 belongs in regular accounts receivable. The other $8,000 goes to retainage receivable, which now holds $20,000 for this job. Drop it all into regular receivables and your collectible balance looks $20,000 better than it is, and a bank or surety reading your statements sees the wrong number too. The same logic runs in reverse for the retainage you hold on your subcontractors.
Bookkeeping only helps if it's finished on a schedule. Our construction close follows the same calendar every month, so reports arrive while you can still act on them:
The WIP schedule matters beyond your own reports. For federal income tax, Internal Revenue Code section 460 generally puts long-term contracts on the percentage of completion method, with an exception for construction contracts expected to finish within two years when the contractor meets the small business gross receipts test. Whichever method your tax return uses, a monthly WIP schedule is the report sureties and banks lean on when they review a contractor, and you can test your own numbers in our WIP calculator.
None of these mean your bookkeeper did something wrong. They mean the company now needs construction-specific work. Watch for these:
Two or three of these together usually means it's time for bookkeeping run by people who work in construction every day.
Both. Many of the contractors we work with run on QuickBooks Online or QuickBooks Desktop, and when it's set up with jobs, cost codes and retainage handled properly, QuickBooks does construction bookkeeping well. Larger construction companies, or those with more entities and heavier reporting needs, often run on Sage Intacct, which we also support.
If your file was set up as a generic small business file, we restructure it before the first close: a construction chart of accounts, jobs and cost codes that match how you estimate, and separate accounts for retainage and over-billings and under-billings. There's more about setup and cleanup on our QuickBooks page.
Bookkeeping is the foundation, not the whole building. The monthly work above sits inside our broader accounting services and our construction CPA practice, which add bonding-ready financial statements, tax planning and preparation, and multi-state filings. When the questions turn forward-looking, like cash forecasts and bonding strategy, that's our fractional CFO for construction companies. You can start with bookkeeping and add the rest when the business needs it.
Free 30-minute consultation with a construction CPA. We'll look at your current books and show you what a construction-grade monthly close would change. English or Spanish.
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