Bookkeeping for
Trades Businesses & Contractors

A generic chart of accounts and a basic P&L don't tell a trades business what it needs to know. They tell you what you spent, not whether any given job was actually profitable. Materials purchased for Job A end up mixed in with materials for Jobs B and C. Subcontractor costs look like one lump sum. And because revenue comes in before and after work is completed, the numbers rarely reflect what's actually happening in the field. We set up bookkeeping that tracks costs by job from the start, so your reports mean something beyond just the total at the bottom.

Job costing is the piece most trades businesses are missing. Without it, you know your overall profit margin but can't tell which jobs made money and which ones quietly lost it. We set up class or customer-level tracking in QuickBooks Online or Xero so that labor, materials, and subcontractor costs are allocated to the right job from the start. Over time that gives you real data to price future work: what the job actually cost versus what you estimated, broken out by category.

If you pay subcontractors $600 or more in a year, they need a 1099-NEC. The catch is that the records to support that have to be kept all year, not assembled in January from a stack of checks and Venmo screenshots. We track subcontractor payments throughout the year with proper vendor records, so 1099 prep is a straightforward export rather than a reconstruction project. We also make sure payments are categorized correctly as subcontractor costs rather than labor, which matters for how your books read to a CPA or lender.

Material purchases are one of the most commonly miscategorized costs in a trades business. A supply run for a specific job gets posted to a general expense account and disappears from any job-level view. We categorize materials by job where it matters, handle the distinction between consumable supplies and capitalized equipment, and make sure vehicle and tool expenses are tracked in a way that supports depreciation schedules and deductions at year-end. If your business uses company vehicles, we track those costs properly for either actual expense or mileage deduction, depending on what makes sense for your situation.

Larger jobs typically involve a deposit upfront, one or more progress invoices during the work, and a final payment on completion. That payment structure creates timing differences in the books that need to be handled correctly. A deposit isn't revenue until the work is done, and partial payments need to clear against the right invoice. We keep receivables current so you always know what's been invoiced, what's been collected, and what's still outstanding by job. That matters both for cash flow and for knowing when it's worth making a follow-up call.

Trades businesses have deductions that require good records throughout the year to claim properly: tools and equipment, vehicle use, home office if applicable, and continuing education or licensing fees. Quarterly estimated taxes also require reasonably current books, not a year-end catch-up. We keep your books current month to month, so quarterly estimates are based on real numbers and year-end is a handoff to your CPA rather than a weeks-long cleanup. If you don't have a CPA, we're happy to refer you to one who works with trades businesses regularly.