Common Bookkeeping Mistakes Contractors Make (and How to Fix Them)
Construction contractors face tight timelines, labor challenges, and cost overruns-so it’s no surprise bookkeeping falls behind. But recurring mistakes can lead to tax issues, cash flow surprises, and lost profits. Here’s what to watch for and how to fix it.
Download Our Free Brochure →Common Bookkeeping Mistakes in Construction
1. Recording Revenue Before It’s Earned
Invoicing doesn’t mean income. Failing to match revenue to actual work completed creates misleading reports.
Fix: Use accrual accounting or milestone billing in your system.
2. Mixing Job Costs with Overhead
Lumping all expenses into one general bucket hides project profitability.
Fix: Track labor, materials, and subs per job-then report overhead separately.
3. Ignoring Unbilled Change Orders
Untracked change orders inflate job costs and destroy margins.
Download Our Free Brochure →Fix: Record change orders as income only when approved and track costs accordingly.
4. Not Reconciling Subcontractor Payments
Cutting checks without matching to job budgets and contracts results in budget overruns and audit gaps.
Fix: Log subcontractor invoices by project and reconcile 1099 payments monthly.
5. Skipping Monthly Reconciliation
Many contractors review books only at year-end, missing errors and opportunities.
Fix: Reconcile all accounts monthly and create rolling job cost reports.
Test Case
A residential builder had underbilled $12K in change orders and miscoded $8K in overhead as job costs. After working with RemoteBooksOnline:
- Clean job P&Ls were rebuilt
- Revenue was restated
- Margins increased 14% on the next three projects
Making the same mistakes? Our construction bookkeeping team catches errors before they cost you.
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FAQs
Do you clean up job cost records from past months?
Yes. We offer historical catch-up and rebuild job profitability reports.
What if we use spreadsheets or a basic system?
We help migrate to QuickBooks or Xero and create clean, scalable reporting.
Can you work with our CPA or in-house estimator?
Yes. We collaborate with your team to improve accuracy and reporting.
Don’t let bookkeeping mistakes eat into your margins. Let RemoteBooksOnline help you fix and prevent them.
