Bookkeeping for Construction Companies and Contractors
Bookkeeping for construction companies needs more than a list of transactions. It needs costs tied to each job, billing that follows progress, a clear view of money held back by customers, and a cash plan that covers payroll and materials. This page explains those needs and how the three services relate.
What does bookkeeping for construction companies involve?
Construction bookkeeping differs from most small business bookkeeping because the unit that matters is the job, not the month. Every cost, from materials to labor to subcontractor invoices, should land on the job it belongs to.
That is the difference between knowing the business made money and knowing which jobs made it. Our monthly bookkeeping covers the core work: coding transactions, reconciling bank and credit card accounts, and keeping payables and receivables current. For a contractor, a chart of accounts that separates direct job costs from overhead lets the profit on each job be read off the reports.
What does a contractor need from the month-end close?
The month-end close is where the books get checked before anyone relies on them. For contractors, a good close usually includes:
- Bank and credit card accounts reconciled.
- Open bills from suppliers and subcontractors recorded in the right month.
- Customer invoices matched to the progress actually billed.
- Costs on each job compared against the estimate, which contractors often want to see.
- Equipment, vehicle and loan balances checked against statements.
Our month-end bookkeeping service follows a monthly cycle. The output is a set of monthly statements.
How do progress billing and retainage affect the numbers?
Many contracts are billed in stages, and some customers hold back a share of each payment until the job is finished. That held-back money is usually called retainage. It is money you are owed under the contract but have not yet collected, and it can sit on a receivables report for a long time.
This is where profit and cash drift apart. A job can look profitable on paper while the bank balance is thin, because costs go out weekly and the final payment arrives late. Our guide on profit vs cash flow covers the gap in plain terms.
Contractors with long jobs also face a timing question: how much of the revenue on an unfinished job should show in this month's results? Accounting has well-known methods for this, including recognizing revenue by percentage of completion. Which method fits your business, and how it interacts with taxes, is a question for your accountant or tax professional. Our role is to keep the books accurate and reconciled.
Why do contractors need cash planning as they grow?
Growth strains cash in construction. A bigger job means buying materials and paying crews before the customer pays. Taking on two jobs at once can make that worse.
A forecast that lays out expected receipts and payments, week by week or month by month, shows where the pinch points fall before they arrive. This is the work of a fractional CFO: forecasting, scenario planning and cash flow planning. A fractional controller sits in between, reviewing the monthly numbers, watching budget against actual, and tightening processes and internal controls.
If you are thinking about a bank line, equipment finance or bonding, lenders and sureties often want clean, current statements and a believable forecast. Financing support and funding readiness are part of the CFO service. We do not give investment advice.
How do Record it, Control it and Drive it map to a contractor?
| Need | Service | What it covers |
|---|---|---|
| Transactions coded, bank reconciled | Record it (bookkeeping) | Monthly coding, reconciliation, AP and AR |
| Reliable monthly results, margins reviewed | Control it (controller) | Month-end close oversight, budget vs actual, margin analysis, internal controls |
| Cash plan, pricing and growth decisions | Drive it (CFO) | Forecasting, scenario planning, margin and profitability analysis |
A small contractor's first need is usually the first row. Pricing starts at $500 a month for bookkeeping, $1,500 for a controller and $2,500 for a CFO, each set as one custom fixed monthly fee. See pricing or the full list on what we do.
What do we not do?
We do not prepare tax returns, audit your books or give investment advice. We work alongside your CPA or tax professional, and clean records generally help any tax professional. English Oak has not published industry-specific results for contractors. This page describes what the finance function of a contracting business generally needs, so you can judge the fit yourself. Related reading: healthcare practices, restaurants and hospitality and the wider industries list.
Need this done for you? See our Bookkeeping service, or pricing. English Oak Financial does not prepare tax returns, perform audits or give investment advice. This guide is general information, not tax, legal or investment advice.
Related pages
Common questions
Can a bookkeeper be an independent contractor?
Yes. Many bookkeepers work independently rather than as employees. What matters for you is whether the person keeps your records on a regular monthly cycle, uses your accounting file, and has someone covering for them. Ask any provider how cover works when the person is away.
Is bookkeeping for contractors in Utah different from other states?
The day-to-day bookkeeping is the same everywhere: coding, reconciling and reporting. State rules on taxes and licensing differ, and those belong with your tax professional. English Oak is based in Lehi and works locally, across Utah and remotely.
When does a contractor need a CFO and not just a bookkeeper?
Usually when the questions change from "what happened" to "what should we do". Examples are whether to take a larger job, buy equipment or hire a crew. That is forecasting and planning work. See what a fractional CFO is.
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