Bookkeeping for construction companies is fundamentally different from bookkeeping for a retail store or a consulting firm — and the difference is not just complexity. It is the need for project-level financial visibility that determines which jobs are profitable, which subcontractors need 1099s, and how much retainage is still outstanding across a dozen active contracts. General small business bookkeeping software and generalist bookkeepers handle the basics, but construction-specific bookkeeping requires job costing, progress billing reconciliation, and subcontractor management built into every monthly close. The Bookkeeping Company has served construction companies and small businesses remotely since 2016.
By Maya Primachenko, QuickBooks Elite Certified ProAdvisor & Founder · Last updated August 2026
Bookkeeping for Construction Companies: Why the Industry Requires a Specialist
Construction bookkeeping operates differently at every level from standard small business bookkeeping:
- Revenue is recognized by project, not by month. A construction company may have five active contracts at different stages of completion. Revenue on each contract flows in through progress billings tied to milestones or percentage-of-completion — not simply by invoice date. Proper revenue recognition requires tracking each contract’s billing status against its estimated total.
- Retainage creates a permanent AR gap. Owners and general contractors typically withhold 5 to 10% of each progress payment until project completion. A construction company with $2 million in active contracts could have $100,000 to $200,000 in retainage receivable that is real revenue — already earned, already taxed on an accrual basis — but not yet collected. Bookkeeping that doesn’t track retainage separately from standard AR understates what the company is actually owed.
- Subcontractor payments require year-round 1099 tracking. Construction companies that pay individual subcontractors or unincorporated entities $600 or more in a calendar year must issue a 1099-NEC. Tracking who gets paid what — by project — is a year-round requirement, not a January exercise. Bookkeeping that tracks subcontractor payments only at year-end routinely misses some recipients. (IRS — Form 1099-NEC, Nonemployee Compensation)
- Equipment depreciation adds a layer absent in service businesses. Excavators, trucks, trailers, and tools are depreciable business assets. The interaction between federal bonus depreciation, Section 179 expensing, and state depreciation rules — especially in Oregon and Washington, which both have specific conformity positions — requires equipment schedules that standard bookkeeping software doesn’t maintain automatically.
- State licensing and bonding have financial record requirements. Construction contractors operating across state lines — particularly in the Pacific Northwest between Washington and Oregon — must comply with each state’s contractor registration and bonding requirements. Bookkeeping that tracks license renewal dates, bond premiums, and certificate of insurance expirations provides early warning before compliance gaps create liability.
What Bookkeeping for Construction Companies Includes Each Month
Bookkeeping for construction companies at The Bookkeeping Company covers the full monthly close cycle with construction-specific data layers:
- Job cost entry and allocation — every expense — labor, materials, subcontractor invoices, equipment, fuel, permits — coded to the specific job number it was incurred for; overhead allocated across active jobs using a defined methodology
- Progress billing reconciliation — billing schedules tracked against contract values; each progress invoice reconciled to the contract percentage-of-completion to ensure billing matches the stage of work performed
- Retainage tracking — retainage withheld from each progress invoice tracked as a receivable in a dedicated retainage account; retainage released and collected recorded separately when project closeout occurs
- Subcontractor AP management and 1099 accumulation — all subcontractor payments logged by project and by vendor, running total maintained throughout the year for January 1099-NEC preparation
- Bank and credit card reconciliation — all business accounts reconciled monthly; equipment financing statements matched against ledger entries
- Monthly job cost reports — estimated-vs-actual cost comparison by job produced at month-end; identifies which projects are running over budget before the overrun becomes unrecoverable
- Monthly financial statements — P&L, balance sheet, and cash flow statement showing both company-level and, where applicable, project-level profitability
The Bookkeeping Company’s monthly bookkeeping service handles this complete construction-specific cycle — and integrates directly with tax preparation at year-end so depreciation schedules, subcontractor 1099s, and retainage positions are already reconciled when the tax return is prepared.
Job Costing: The Most Critical Bookkeeping Practice for Construction Companies
Job costing is the foundational practice that separates construction bookkeeping from general small business bookkeeping. Done correctly, job costing answers a question that a company-level P&L cannot: which jobs are making money, and which are losing it.
- How job costing works in QuickBooks. Every transaction — vendor invoice, payroll run, expense, materials purchase — is tagged with a customer or project name. QuickBooks generates a Job Profitability Report that shows gross profit on each job by comparing income (progress billings) against direct costs (labor, materials, subcontractors, equipment, other job-site costs). The report can be generated at any point during the project, not only at completion.
- Labor is the highest-risk cost to track. Field labor must be allocated to jobs as it occurs — not estimated retroactively. Payroll runs should allocate each crew member’s hours to their specific project. Payroll burden (employer FICA, workers’ comp, health benefits) should also be allocated by job, not lumped into overhead. Time tracking integrated with payroll produces the most accurate job cost labor figures.
- Estimated vs. actual comparison drives the bid process. The most valuable use of job costing data is retrospective — comparing actual job costs against the original estimate after completion to identify where the bid was accurate, where it was underpriced, and which cost categories consistently overrun. Over time, this data dramatically improves bid accuracy for similar future projects.
- Work in Progress (WIP) reporting. For construction companies using the percentage-of-completion method, a monthly WIP report shows the financial status of all active contracts — costs incurred to date, billings to date, estimated gross profit at completion, and over-billing or under-billing position. Lenders and bonding companies use WIP reports to assess financial health.
Maya Primachenko is a QuickBooks Elite Certified ProAdvisor — the highest certification tier — with the specific configuration experience to set up and maintain construction job costing in QuickBooks accurately for companies of any size. (SBA — Managing Your Business Finances)
Catch-Up Bookkeeping for Construction Companies Behind on Records
Bookkeeping for construction companies that have fallen behind presents specific challenges that a standard catch-up project may not address — because construction books aren’t just unreconciled; they often have missing job cost allocations, untracked retainage, and a year’s worth of subcontractor payments that were never tagged to the correct project.
- What construction catch-up involves. Bank and credit card reconciliation for all uncovered periods; reconstruction of job cost allocations from invoices, receipts, and payroll records; retainage receivable reconstruction from contract documents and payment histories; and a subcontractor payment register reconciled against available records for 1099-NEC preparation.
- When catch-up is most often triggered. The most common triggers for construction catch-up are: tax season discovery that books are months behind; a bank loan application requiring current financial statements and job profitability reports; a change in company ownership or a new business partner requiring a financial history review; and a key employee departure leaving unreconciled accounts.
- Ecommerce and other small business catch-up. The Bookkeeping Company handles catch-up engagements across industries, including ecommerce businesses with Amazon, Shopify, and multi-channel reconciliation backlogs — where the challenge is not missing transactions but transactions entered at the wrong net amount, missing processor fees, or incorrectly categorized returns. (IRS — Recordkeeping for Small Businesses)
Catch-up projects are scoped individually based on how far behind the books are, the number of accounts, and the complexity of job cost reconstruction required. After catch-up is complete, the account transitions to ongoing monthly bookkeeping to prevent future accumulation.
How Much Does Bookkeeping for Construction Companies Cost?
Monthly bookkeeping costs for construction companies vary based on transaction volume, number of active jobs, and whether payroll processing is included. General market rates for small business bookkeeping range from approximately $250 to $1,500 or more per month; construction companies typically fall in the mid-to-upper range due to job costing and subcontractor management scope. (Source: SCORE Small Business Resources, 2025.)
- Low complexity (under 3 active jobs, under 100 monthly transactions): approximately $350 to $600 per month
- Medium complexity (3–10 active jobs, payroll for a field crew): approximately $600 to $1,100 per month
- Higher complexity (10+ active jobs, multi-state, equipment schedules): approximately $1,000 to $1,500+ per month
- Catch-up projects: one-time fee priced by the number of uncovered months and job cost reconstruction scope; typically $500 to $5,000+ before transitioning to ongoing monthly service
For tax preparation, construction companies need both organized books and an informed approach to equipment depreciation, subcontractor expense documentation, and multi-state contractor deductions. See how The Bookkeeping Company’s integrated bookkeeping and tax preparation work together for construction and small business clients.
Remote Monthly Bookkeeping for Construction, Ecommerce, and Small Businesses
The Bookkeeping Company delivers bookkeeping entirely remotely via QuickBooks Online — no in-person appointments, no mailed documents:
- Construction companies nationwide — job costing, progress billing reconciliation, retainage tracking, subcontractor 1099 management, and monthly WIP reporting via QuickBooks Online; construction companies in Washington and Oregon have the added benefit of local knowledge of state contractor registration, L&I classification, and Oregon’s bonus depreciation addback rules
- Ecommerce businesses — Amazon seller reconciliation (gross sales, FBA fees, returns, and reserves reconciled from settlement reports), Shopify, Stripe, and PayPal multi-channel reconciliation, COGS tracking, and 1099-K management for ecommerce businesses with significant online sales volume
- Small businesses across all industries — professional services, healthcare, retail, technology, real estate, hospitality, and nonprofit organizations served with the same monthly close rigor applied to construction and ecommerce clients
The IRS recommends that all businesses maintain adequate records to support income, deductions, and tax positions. (IRS Publication 334 — Tax Guide for Small Business) A professional bookkeeper ensures those records exist, are current, and are organized — regardless of the industry.
Ready for professional bookkeeping for construction companies and small businesses — job costing, catch-up, and monthly close included? Call The Bookkeeping Company at 360-524-9889 for a free discovery call. We serve construction, ecommerce, and small businesses nationwide.
Frequently Asked Questions About Bookkeeping for Construction Companies and Small Businesses
What do bookkeeping services cost for a small business?
Monthly bookkeeping for small businesses typically ranges from $250 to $1,500 or more per month depending on transaction volume and complexity (Source: SCORE Small Business Resources, 2025). Construction companies generally fall in the mid-to-upper range due to job costing, subcontractor 1099 tracking, and retainage management. Ecommerce businesses with multiple channels also tend toward the higher end due to multi-platform reconciliation complexity. Catch-up engagements are priced separately as one-time projects.
Bookkeeper vs accountant — what’s the difference?
A bookkeeper handles ongoing recordkeeping — transaction categorization, bank reconciliation, job costing entries, accounts payable and receivable, and monthly financial statements. An accountant or CPA uses those records for tax strategy, tax return preparation, and business planning. Construction companies need both: a bookkeeper for accurate daily and monthly records, and a CPA for depreciation strategy, percentage-of-completion method guidance, multi-state filing, and bonding capacity planning based on current financial statements.
Do you offer catch-up bookkeeping for messy books?
Yes. The Bookkeeping Company offers catch-up bookkeeping for construction companies and small businesses with unreconciled books going back months or years. Construction catch-up specifically includes bank reconciliation for all uncovered periods, job cost reconstruction from available invoices and payroll records, retainage receivable calculation from contract documents, and subcontractor payment tracking for 1099-NEC preparation. After catch-up is complete, the account transitions to ongoing monthly bookkeeping.
How does remote/online bookkeeping work?
Remote bookkeeping via QuickBooks Online requires no in-person appointments. The bookkeeper accesses the client’s QuickBooks file through the accountant portal, categorizes transactions from connected bank feeds, reconciles all accounts, and delivers monthly financial statements through a secure portal. Construction companies share subcontractor invoices and job documentation digitally. Ecommerce businesses sync store and processor accounts directly to QuickBooks. The business owner reviews reports and communicates via the portal or by phone.
What industries do you specialize in?
The Bookkeeping Company specializes in construction companies (job costing, retainage, subcontractor 1099 management, progress billing), ecommerce businesses (Amazon, Shopify, Stripe, and multi-channel reconciliation), and small businesses across all industries. The firm has specific Pacific Northwest depth — Washington State B&O tax, Oregon CAT, Oregon SB 1507 bonus depreciation addback, and payroll for businesses operating across the Washington-Oregon border. Remote service is available nationwide in all 50 states.
What is job costing and why do construction companies need it?
Job costing tracks all revenue and costs by individual project number — labor, materials, subcontractors, equipment, and overhead — rather than only at the company level. Construction companies need job costing because profitability varies dramatically between project types, clients, and regions. Without it, a company can show overall profit while specific job types consistently lose money. Job costing data also enables accurate future bids, supports change order negotiations, and identifies which cost categories are consistently over-running estimates.
How does ecommerce bookkeeping differ from regular bookkeeping?
Ecommerce bookkeeping requires reconciling multi-channel payment processors — Amazon, Shopify, Stripe, PayPal — each of which deposits net amounts after deducting fees, returns, reserves, and promotional credits. Gross sales, processor fees, returns, and refunds must be recorded separately to produce accurate revenue figures. Inventory COGS tracking, multi-state sales tax nexus management, and 1099-K reconciliation add complexity that is entirely absent in most service business bookkeeping engagements.
How do I know if my construction company’s books need a catch-up?
Signs your construction company needs catch-up bookkeeping: bank accounts unreconciled for more than 30 days; job cost reports that don’t match project invoices or contracts; subcontractor payments not tracked against vendor names for 1099 purposes; retainage receivable missing from the balance sheet; or financial statements that show company-wide revenue but can’t break it down by active project. Most construction catch-up projects are triggered by a tax deadline, a bank loan application, or a business partner requesting project-level financial documentation.
About The Bookkeeping Company
The Bookkeeping Company: Tax Strategies & Planning
18523 NE 65th St
Vancouver, WA 98682
Phone: 360-524-9889
Email: thebookkeepingcomp@gmail.com
Service Area: Serving construction companies, ecommerce businesses, and small businesses nationwide. All bookkeeping delivered remotely via QuickBooks Online and secure document portal.