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What bookkeeping do general contractors need to do?

Job costing is the foundation of contractor bookkeeping. Every expense, material purchase, labor hour, and subcontractor payment needs to be tracked to a specific project. Without job-level tracking, you might know your overall profit but have no idea which jobs made money and which ones lost it. That information changes how you bid future work.

Track expenses by job as they happen. Materials from the lumber yard, equipment rentals, permit fees, and fuel for the work truck all need to be coded to the project they belong to. Waiting until month-end to sort through receipts means guessing, and guessing leads to inaccurate job costs that make your profitability reports useless.

Bank and credit card reconciliation should happen weekly for contractors and construction companies. High transaction volumes mean errors and duplicate charges slip through if you wait a month. Weekly reconciliation also keeps your books current so you can pull a job profitability report whenever you need one.

Accounts payable management matters when you’re paying subcontractors and suppliers across multiple jobs. Track what’s owed to whom, which jobs those costs belong to, and when payments are due. Late payments to subs damage relationships you depend on for future projects.

Invoicing and accounts receivable need consistent attention. Send invoices on schedule, track what’s outstanding, and follow up on late payments. If you’re working with retainage, track the held amounts separately so you know what’s coming and when you can expect it.

If you have employees, payroll records and tax deposits must be accurate and on time. California has strict requirements and the penalties for mistakes add up quickly. Crew time should be tracked by job so labor costs show up in your project reports alongside materials and sub costs.

Collect W-9s from subcontractors before you pay them and track payments throughout the year. This is a year-round job, not a January scramble. Chasing paperwork for 1099s at tax time wastes hours you don’t have.

Keep digital copies of every receipt, contract, and invoice. Paper gets lost, fades, or sits in the cab of your truck for months. A simple system for scanning and organizing documents saves headaches during tax prep or if you’re ever audited.

The bookkeeping that actually matters for contractors goes beyond categorizing transactions. You need to see profit margins by project, understand which types of work are most profitable, and have reliable numbers when bidding future jobs. Small business bookkeeping in Los Angeles that doesn’t track by job gives you half the picture and leaves money on the table because you’re flying blind on which work is worth pursuing.

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More Questions

How do I find a bookkeeper who understands healthcare accounting?

Look for bookkeepers with direct experience in medical practices, not just general small business experience. Ask specifically about insurance reconciliation, patient billing, and integration with practice management software.

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What does it mean to close the books at month end?

Closing the books means finalizing all financial activity for a period so your records are accurate and complete. This includes reconciling bank accounts, categorizing transactions, making adjusting entries, and generating financial statements you can rely on.

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What is accrual vs cash basis accounting and which should I use?

Cash basis records income when you receive payment and expenses when you pay them. Accrual records both when they're earned or incurred. Most small businesses use cash basis because it's simpler and offers tax timing flexibility.

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How long does it take to catch up on a year of bookkeeping?

For most small businesses, catching up on one year of bookkeeping takes two to four weeks. More complex situations with multiple accounts, high transaction volumes, or missing documentation can take six weeks or longer.

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What is the difference between revenue and profit?

Revenue is the total money your business brings in from sales. Profit is what remains after subtracting all expenses. A business can have strong revenue and still lose money if costs exceed income.

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How do I track marketing expenses for my real estate business?

Separate listing-specific marketing costs from general brand marketing and track them in different categories. Set up subcategories in QuickBooks for photography, staging, advertising, and similar expenses. For property-level analysis, use classes or projects to see costs per listing.

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Villa Group is a San Marino accounting firm serving small businesses across Los Angeles County. We handle bookkeeping, payroll, CFO services, and business sale preparation. Led by Christian Villalba, MBA, with over a decade of experience and 400+ clients served.

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