Common Questions
Questions business owners ask about taxes, deductions, and accounting. Have another? We encourage them.
How do I track job costs for my construction business?
Job costing means tracking every expense by project so you know which jobs actually make money. The key is coding expenses to projects in your accounting software when they happen, not weeks later when you're guessing.
Read answerWhat is the best accounting method for contractors?
Cash basis accounting works best for most contractors. It aligns your tax bill with actual money collected and avoids paying taxes on receivables you haven't received yet, which matters a lot when dealing with retainage and slow-paying customers.
Read answerHow do I handle retainage in my construction bookkeeping?
Set up separate accounts for retainage receivable and retainage payable. Track both at the job level so you know exactly what's held back on each project. Record the full invoice amount as revenue when the work is done, even though part of the payment is withheld.
Read answerCan a contractor use cash basis accounting?
Yes, most contractors can. The IRS allows cash basis accounting for businesses with average annual gross receipts under $29 million. The bigger question is whether cash basis gives you useful financial information for running your business.
Read answerWhat tax deductions can construction companies claim?
Construction companies can deduct equipment and vehicle costs, materials, labor, insurance, bonding, job site expenses, and administrative overhead. The key is tracking expenses by job and maintaining documentation throughout the year.
Read answerHow do I set up QuickBooks for a construction business?
Start by enabling job costing and building a chart of accounts designed for construction. Configure customers as jobs, set up items for labor and materials, and structure everything to track profitability by project.
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