Construction & Contractors
Bookkeeping and job costing for LA County general contractors, home builders, remodelers, and commercial construction.
The Industry
LA County’s construction market runs on constant motion. Residential builds across the San Gabriel Valley, mid-rise commercial work along the 210 and 10 corridors, infrastructure projects, and a steady stream of high-end remodels in Pasadena, Arcadia, and San Marino. The volume of work is large, the margins are tight, and the accounting underneath it all looks nothing like a typical service business.
Construction moves money differently. You pay for materials and labor before the customer pays you. You bill progress payments based on work completed. Retention gets held back until final acceptance, sometimes for months after the job is done. Subcontractors need to be managed, paid, and tracked for 1099s. A project that looks profitable on paper can still create a cash crunch because the timing of receipts and disbursements rarely lines up.
Who This Covers
Who This Covers
General contractors, home builders, custom residential, commercial construction, tenant improvement firms, and design-build operators working across LA County. Any construction business juggling multiple active projects, a mix of employees and subs, and progress billing against signed contracts.
What Makes It Complex
What Makes It Complex
Job costing by project and cost code. Progress billing tied to a schedule of values. Retention tracked on both the receivable and payable sides. Subcontractor compliance including W-9s, insurance certificates, and year-end 1099s. Change orders that have to flow through to billing. Payroll that may blend union and non-union labor across multiple job sites.
How We Handle It
Construction accounting is the deepest part of Dennis’s background. Nearly a decade managing development accounting and construction draw packages at Alexandria Real Estate Equities, an S&P 500 REIT. Years building the accounting function at a real estate development firm, including project costing, budgets, and reforecasts. Before that, direct construction accounting work managing payroll for 200-plus union and non-union field employees and building job cost reporting systems from the ground up.
That experience translates directly to how we set up contractor books. QuickBooks gets configured for construction, not as a generic service business. Every project becomes a job. Every expense gets coded to the right project and cost code. Labor hours flow into the correct buckets. You can pull up any open project and see actual versus budget at any point in the month, not just at close-out.
Job Costing and Project Profitability
Job Costing and Project Profitability
Labor, materials, subcontractors, equipment, and permits coded to the specific project and cost code. Budget versus actual reporting available on every open job. Work-in-progress schedules that reflect where each project actually stands. Historical cost data that makes the next bid grounded in what similar work really costs, not what it felt like.
Progress Billing, Retention, and Subs
Progress Billing, Retention, and Subs
Progress billing set up around the schedule of values so pay applications match the work in place. Retention tracked as a separate receivable on customer contracts and a separate payable on what is owed to subs. W-9s collected before first payment. Year-end 1099 preparation that runs as a reporting task, not a document hunt in January.
Common Problems
Most construction accounting problems trace back to the same root. Projects get lumped together instead of tracked individually. Material invoices get coded to a generic “Materials” account instead of the job they belong to. Subcontractor payments hit the books without a project attached. At month end, the P&L tells you the company made or lost money, but you cannot see which projects drove the result. Bidding the next job becomes a guess.
Retention is the other quiet problem. You hold a percentage back from every subcontractor payment, and your customers hold the same back from your draws. Without a system to track it, retention balances drift. Subs call asking when they will get paid out. Owners sit on your retention longer than the contract allows because no one is following up. Real money quietly ages in both directions.
Bidding Based on Guesswork
Bidding Based on Guesswork
Without clean job cost history, every new bid is a fresh estimate. You remember the last remodel felt tight but you cannot pull up what it actually cost once every expense was counted. You bid the next one at a similar rate and hope. Jobs that seemed profitable at close-out turn out to have lost money, and the pattern repeats because the data needed to break it never gets produced.
Retention and 1099 Compliance Gaps
Retention and 1099 Compliance Gaps
Retention receivables sit uncollected because nobody is tracking when they come due. Subcontractor payments go out without W-9s on file, creating a 1099 problem at year end. Certificates of insurance expire and nobody notices until something goes wrong on a job site. None of these are hard problems to solve, but they require a system most small construction operations have never put in place.
What Changes
Job cost reports show real profitability by project, by customer type, and by project manager. You can see that the custom home builds run a consistent margin while tenant improvement work comes in tighter. Bidding starts getting directed toward the work that actually makes money. Historical cost data gives every new estimate a grounded starting point instead of a number pulled from memory.
Cash flow becomes readable. Progress billing goes out on schedule. Retention gets released when contract terms are met because someone is watching for it. Subcontractor payments flow with the right documentation behind them. Year-end 1099 filing becomes routine. The back office stops being the bottleneck that keeps projects from closing cleanly.
Bids Grounded in Real Data
Bids Grounded in Real Data
Past project costs become the foundation for future bids. You stop underbidding work because labor always runs over budget. You stop overbidding and losing jobs on price. Project managers get visibility into their own jobs and can flag problems before they eat the margin. The business shifts from reacting to finishing jobs to planning how the next ones go.
Clean AP, AR, and Retention
Clean AP, AR, and Retention
Progress billing processed on schedule with pay applications that match the work in place. Retention tracked both directions so you know what is coming in and what is going out. Subcontractor documentation collected before payment so 1099 season is quiet. The accounting side stops being the reason projects stall at close-out.
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