What Are Bookkeeping Services for Construction Companies?
Bookkeeping in the construction industry is unlike any other business. Between fluctuating job costs, subcontractor payments, and progress billing, construction companies require a specialized bookkeeping approach to maintain accurate financials.
This guide covers the key components of bookkeeping for construction companies, the services offered by outsourced providers, and why specialized support matters for builders, contractors, and construction firms of all sizes.
Why Is Construction Bookkeeping Different?
Construction businesses don’t operate like typical retail or service companies. Each project is a financial entity with its own labor, materials, schedule, and profitability metrics. Without proper tracking, it’s easy to lose sight of cost overruns, underbilling, or missed invoices.
Key distinctions in construction bookkeeping include:
- Job costing: Assigning expenses and income to specific projects
- Progress billing: Invoicing based on project milestones or completion percentages
- Change orders: Adjusting contracts mid-project and tracking their impact
- Subcontractor payments: Managing 1099 vendors, lien waivers, and retainage
- WIP reports: Tracking work-in-progress to measure revenue recognition
These complexities require a bookkeeping solution that understands the industry’s unique workflows and reporting standards.
What’s Included in Construction Bookkeeping Services?
Whether in-house or outsourced, comprehensive construction bookkeeping typically includes:
- Categorization of income and expenses by project
- Job cost tracking and budget-to-actual reporting
- Progress billing support and accounts receivable management
- Payroll tracking by employee and job site
- Management of subcontractor payables and lien compliance
- Retainage accounting
- Financial statement preparation (P&L, balance sheet, cash flow)
- Sales tax and permit expense tracking
- Year-end books for tax filing
At RemoteBooksOnline, we offer industry-specific bookkeeping services tailored to construction, with dedicated support for job costing and progress tracking.
Benefits of Outsourcing Bookkeeping for Construction Companies
- Accurate Job Costing
Know exactly how much each project costs in labor, materials, and overhead. This improves estimating and helps identify profit leaks early. - On-Time Invoicing and Cash Flow Management
With accurate billing tied to contract stages, cash flow becomes more predictable – essential in a high-expense business like construction. - Subcontractor Compliance
Bookkeepers help manage 1099s, lien waivers, and contract terms, reducing legal and tax risks. - Audit-Ready Books
Proper documentation of project costs and change orders keeps you compliant with lenders, bonding agents, and the IRS. - Focus on Building, Not Paperwork
Most importantly, outsourcing allows contractors to focus on completing projects – not managing spreadsheets and bank feeds.
Test Case: Residential Contractor in Texas Gains Project Control
Business: Residential construction company with five ongoing projects
Problem: The owner was using a general bookkeeper who didn’t separate expenses by job. This caused budget overruns, poor visibility, and missed invoice deadlines.
Solution: The company moved to RemoteBooksOnline, where we set up job-level bookkeeping and linked expenses and payroll to each active project.
Results:
- Improved profitability tracking by project
- No more guesswork on job costs
- Faster invoicing tied to progress billing
- Owner regained 10+ hours per week previously spent on bookkeeping
Frequently Asked Questions
Can I use QuickBooks for construction bookkeeping?
Yes. QuickBooks Online or QuickBooks Desktop with the Contractor Edition is commonly used. We support and customize QuickBooks setups for construction companies.
Do I need separate books for each project?
No, but every job should be tracked using project-based accounting with clear income and expense allocation.
How often should I update job costs?
Ideally, weekly or biweekly. This helps prevent cost overruns and ensures accurate billing.
Can outsourced bookkeepers manage retainage?
Yes. We track retainage held from customer payments and owed to subcontractors and reflect this in reports.
Is this only for large companies?
No. Our construction clients include solo general contractors, multi-crew remodelers, and growing residential developers.
Get Construction-Focused Bookkeeping with RemoteBooksOnline
Whether you’re a solo contractor or managing multiple crews, RemoteBooksOnline provides tailored bookkeeping support to keep your jobs profitable and your books audit-ready. With flat monthly pricing and job-level tracking, we’re the back-office partner built for builders.
Explore our monthly bookkeeping services, or request a free trial to get started with industry-specific support.
