Bookkeeping and accounting for contractors

Contractor bookkeeping that starts with reliable records

A bank balance cannot tell you which job earned money. Start with complete records, reconciled accounts and a consistent way to identify each project. KDM works with business owners to scope monthly or quarterly bookkeeping, QuickBooks setup and cleanup, and tax preparation.

For a contractor, the initial review should identify how customer invoices, materials, subcontractors, crew costs and owner transactions enter the books. Agree on who supplies job details and approves corrections before work begins.

Connect job costs to the financial statements

Use the same job reference on estimates, purchase records, time records and vendor bills. Compare the original budget with actual costs and the work still needed to finish. Keep overhead visible instead of treating every bank withdrawal as a direct job cost.

• Separate materials, labor, subcontractors and other direct costs.
• Keep approved changes distinct from proposed work.
• Review bills that arrive after a job appears complete.
• Investigate costs without a job reference before relying on the margin.

Start with tracking job profitability while work is underway, then use the vendor-bill review guide. Project reporting is scoped around the records and software available.

Separate job profit from cash collection

Track customer deposits, progress billings, collected cash and retainage as distinct items. A payment application is not the same as money in the bank. Compare expected receipts with payroll, supplier bills and other committed payments before taking on another project.

Read the guides to progress billing and cash flow, retainage and cash-flow forecasting for contractors. If you use a work-in-progress schedule, review what it adds to the profit-and-loss report.

Coordinate bookkeeping, payroll and tax work

Good supporting records help substantiate business income and expenses. Keep payroll reports, subcontractor information and equipment records connected to the books so the person preparing the return can identify missing information early.

Explore payroll services, business tax planning and S-Corporation tax preparation. Each is a separate engagement unless the written scope includes it. Choosing an entity or accounting method requires a review of your circumstances.

What to bring to a contractor accounting consultation

• Your most recent business return and current financial statements.
• A list of bank, credit-card, loan and payroll accounts.
• The last reconciled month and a list of missing records.
• A sample estimate, customer invoice and vendor bill.
• A list of open jobs, unpaid customer balances and retainage.
• The decisions you need the reports to support.

Describe the situation in the consultation form; send sensitive documents only through the secure process agreed with KDM. The initial discussion establishes what can be completed with your records and what needs additional work.

Scope and fees

Published monthly bookkeeping starts at $325. Contractor transaction volume, account count, payroll and project reporting can change the scope and fee. Cleanup is quoted separately. Review the bookkeeping fee table and QuickBooks project fees, then confirm your engagement in writing.

Contractor accounting questions

What does contractor bookkeeping include?

KDM scopes transaction categorization, bank and credit-card reconciliation, financial statements and review of the records behind those reports. Job coding, catch-up work, payroll and tax preparation must be agreed in the written scope.

Can you help clean up a contractor’s QuickBooks file?

Yes. KDM reviews the file, missing statements, opening balances and previously filed periods before quoting cleanup separately. Bring an account list and the last completed reconciliation to the consultation.

Does a profitable job mean I have cash available?

No. A job can show a profit while customer invoices or retainage remain unpaid. Review job costs and the timing of receipts, payroll, vendor payments and taxes separately.

Do you work with contractors outside Boca Raton?

KDM has offices in Boca Raton and Fort Lauderdale and works with clients remotely nationwide. Discuss your business locations, records and service needs before agreeing on an engagement.