What kind of accounting does a construction company need?
Construction companies need job costing that tracks every dollar by project. Labor, materials, subcontractors, permits, equipment rental all get coded to specific jobs so you can see actual costs versus estimates and know which types of work make money.
Without job-level tracking, you’re looking at total revenue and total expenses for the month. That tells you whether the business is profitable overall but hides which projects made money and which lost it. You end up bidding more work at rates that don’t actually work because you don’t know what the last similar job really cost.
Contractors and home services businesses also need proper revenue recognition for progress billing. When you bill a customer for work completed, that revenue should be recognized even if you haven’t been paid yet. Retainage gets tracked as an asset until it’s released. Your P&L should reflect work completed, not just cash collected.
Subcontractor management matters for 1099 compliance. You need to track who got paid what and issue 1099-NEC forms at year end. Miss those filings and the IRS comes looking. Payroll for your crew needs to handle varying schedules and overtime correctly.
Tax preparation should capture Section 179 depreciation on trucks and equipment, mileage deductions, and home office if you run the business from there. Quarterly estimates prevent surprise tax bills in April when you had a profitable year but didn’t set money aside.
Most Phoenix bookkeeping services don’t understand construction-specific requirements. Job costing, progress billing, and subcontractor tracking aren’t standard bookkeeping. They require systems set up specifically for how contractors operate.
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More Questions
How much should an accountant cost for a small business?
Small business accounting typically runs $200 to $600 monthly for bookkeeping, with tax preparation adding $500 to $2,000 annually. The actual cost depends on your transaction volume, industry, and which services you need.
Read answerHow much does accounting cost for contractors?
Monthly bookkeeping for contractors typically runs $300 to $800 depending on transaction volume and complexity. Tax preparation adds $800 to $2,500 annually depending on entity type and number of projects.
Read answerWhen should I hire an accountant for my business?
Hire an accountant when you're behind on your books, have employees, receive IRS correspondence, or spend too much time on financial tasks outside your expertise. Most business owners wait until they're overwhelmed, which means paying for cleanup on top of ongoing help.
Read answerWhat can I deduct on my Arizona taxes?
Arizona starts with your federal adjusted gross income, so federal deductions carry through automatically. Arizona also offers unique tax credits for school donations and qualifying charitable organizations that can reduce your state tax bill dollar-for-dollar.
Read answerHow should contractors track expenses?
Track construction expenses by coding every purchase to a job number in your accounting software, saving receipts digitally, and reconciling accounts weekly instead of monthly.
Read answerWhat are the most common payroll errors for small businesses?
The biggest payroll errors include misclassifying workers, depositing taxes late, calculating overtime wrong, and missing state tax registrations. These mistakes compound quietly until an audit or tax filing reveals months of accumulated problems.
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