What does a construction bookkeeper do?
A construction bookkeeper codes every expense to the correct job. When materials come in, they get assigned to the project where they’ll be used. Labor hours get allocated to the job your crew worked on. Subcontractor invoices tagged to the specific project. This job-level tracking is the foundation of knowing which projects make money.
They reconcile bank and credit card accounts monthly, matching every transaction to what’s in your books. Catch errors early instead of discovering six months later that you’ve been missing charges or recording things twice. Monthly reconciliation also flags fraudulent transactions or missed deposits while there’s still time to fix them.
Accounts receivable management means tracking what you’ve billed, what’s been paid, and what’s outstanding. Follow up on slow-paying customers before invoices age past 60 days. Track retainage separately so you know what’s being held and when it should be released. Construction cash flow depends on collecting what you’re owed on schedule.
Subcontractor payments get processed and tracked for 1099 compliance. Every check to a sub gets recorded with their tax ID. At year end, 1099-NEC forms go out showing what you paid each contractor. Miss those filings and you face IRS penalties.
Progress billing gets handled if you bill customers as work progresses rather than at completion. The bookkeeper creates invoices based on percentage of work completed, tracks what’s been billed versus what’s actually been paid, and manages the timing between work performed and cash collected.
Financial reports show profitability by project and overall business performance. You get profit and loss statements by job showing actual costs versus estimates. Monthly P&L for the whole business. Balance sheet showing assets and liabilities. Reports formatted so you can actually use them to make decisions about bidding and which types of work to pursue.
The difference between a general bookkeeper and one who understands construction is job costing knowledge. Generic bookkeeping tracks income and expenses by month. Construction bookkeeping tracks income and expenses by project. Without that project-level visibility, you’re flying blind on which jobs made money and which lost it.
A good construction bookkeeper also prepares your books for tax time so your accountant isn’t starting from scratch. Clean records, proper job costing, accurate subcontractor tracking, and organized documentation make tax preparation faster and cheaper. Most of the tax prep fee is cleanup work on messy books. Keep them clean monthly and you pay less in April.
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More Questions
Who can help me with an IRS audit?
Three types of professionals can represent you before the IRS. Enrolled Agents, CPAs, and tax attorneys all have credentials to attend audit meetings, communicate with the IRS, and negotiate on your behalf. Finding someone with actual audit experience matters most.
Read answerWhat taxes do you have to pay as a contractor?
Self-employment tax and income tax are the main ones. You'll pay 15.3% in self-employment tax plus federal and Arizona income tax on your net profit. Quarterly estimated payments are required to avoid penalties.
Read answerWhy do contractors struggle with cash flow?
Construction cash flow problems happen because you buy materials and pay crews before customers pay you. The timing gap between spending money and collecting it creates constant cash pressure.
Read answerWhat expenses are 100% deductible?
Most ordinary and necessary business expenses are 100% deductible. The confusion usually comes from specific exceptions like meals at 50%, entertainment at 0%, and vehicle or home office expenses based on business use percentage.
Read answerHow much do bookkeeping services charge?
Small business bookkeeping typically costs $300 to $1,500 per month depending on transaction volume, complexity, and what services you need. The range is wide because a simple service business with one bank account looks very different from a contractor tracking job costs across multiple projects.
Read answerIs a bookkeeper cheaper than an accountant?
Yes, bookkeepers typically charge less than accountants for similar work. But they do different things, so the real question is which one you need for the tasks at hand.
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