Construction bookkeeping
Construction bookkeeping checklist
Construction accounting follows the job, not the bank account. The monthly request should collect the job cost reports, the progress billings, the change orders, the subcontractor invoices and the payroll records for each job. Without those records the books show cash moving but cannot show whether a job made money.
Who sends itSent by the construction bookkeeper after the month ends, usually by the 10th. It covers every active job, including jobs with no billing that month.
0 of 18 ticked
01Jobs and billing
02Subcontractors and vendors
03Payroll and labor
04Cash and compliance
What firms get wrong
- Recording progress billings as revenue without matching the cost to the same period.
- Leaving retainage in accounts receivable with no schedule and no expected release date.
- Paying a subcontractor before the W-9 and certificate of insurance are on file.
- Charging equipment and fuel to overhead when the job cost report needs them by job.
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Questions about this checklist
What records does a construction company need each month?
The job cost reports, progress billings, change orders, subcontractor invoices, payroll by job, material invoices, loan draws and bank statements. The job cost report is the record that ties the spending to the contract.
How should retention be recorded?
Retainage withheld by a customer is usually a receivable, and retainage the client withholds from a subcontractor is usually a payable. Keep a schedule by job and release the amounts when the contract allows.
Do subcontractors need a 1099?
A payment to an unincorporated subcontractor for services is generally reported on Form 1099-NEC when it reaches the threshold. Collect a W-9 before the first payment, and check whether the subcontractor is a corporation or an exempt payee.
Why does the job cost report not match the profit and loss statement?
The profit and loss statement includes costs that are not assigned to a job, such as office overhead, and it may not include work in progress. Reconcile the job costs to the general ledger and review the work-in-progress schedule together.
Sources
- IRS: Publication 334, Tax Guide for Small Business
- IRS: Publication 946, How to Depreciate Property
- IRS: Instructions for Forms 1099-NEC and 1099-MISC
Checked November 3, 2026. Tax rules, forms and thresholds change; confirm them with the IRS or your tax software before relying on them.
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