How much does bookkeeping cost for contractors?
General bookkeeping cost guides do not answer this well, because contractor books are not just more transactions, they are a different shape. Here is the honest version, with the vocabulary that actually drives the price.
The short answer
Contractor and trades bookkeeping typically runs a little higher than a simple service business at the same revenue. Our own plans are quoted after a diagnostic rather than listed on a rate card, and every level includes the business tax return. Where a contractor lands in that range depends less on revenue than on how the jobs themselves are structured.
One number worth holding onto: retainage on a typical construction contract runs 5 to 10 percent of each progress payment, held back until the job closes out. That is real money already earned that has to be tracked as owed to you, not money that simply has not shown up yet.
The vocabulary that changes the number
Job costing
Tracking income and expense by job rather than just by month, so you can see which jobs actually made money instead of guessing from the total.
Retainage
The 5 to 10 percent a customer or general contractor withholds from each payment until the job is substantially complete. It sits on your books as a receivable, not as a gap in revenue.
Progress billing
Invoicing by percentage of completion instead of one lump sum. Revenue lands in pieces that rarely line up with when the cost actually hit.
Crew payroll
Multiple W-2 employees or 1099 subs, often both, each with their own filing and reporting requirements.
Equipment and vehicles
Trucks, tools, and equipment carry their own depreciation and maintenance tracking, and they move between jobs in ways that complicate simple expense categories.
1099 subcontractors
Every sub paid over the threshold needs a W-9 on file and a 1099 issued on time. Missing one is a compliance problem, not just a bookkeeping one.
What we actually do, and what we do not
We keep clean, CPA-reviewed books that track income and cost by job, which is what most owners actually need to answer "did that job make money." We do not build deep project-cost accounting systems the way a dedicated project office would. If your operation needs that level of detail, we will say so honestly rather than take on work we cannot do well. We wrote more about how we work with trades on the contractor bookkeeping page, and about the mechanics of tracking job cost itself in job costing for contractors.
How we price it
We quote a flat monthly fee after looking at your books rather than publishing a rate card. Foundations includes quarterly strategy meetings. Growth adds monthly meetings and your personal return. Partner adds bi-weekly meetings and priority access. Every level includes clean CPA-reviewed books, the pay-yourself-first cash system, and your business tax return. The pricing page explains how we arrive at your number.
We are based in Knoxville and work with contractors and trades across East Tennessee, Nashville, and remotely nationwide.
Answers before you ask.
How much does bookkeeping cost for a contractor or trade business?
Contractor bookkeeping typically runs a little higher than a simple service business at the same revenue, because the work includes tracking income and cost at the job level, not just the business as a whole. Smoky Mountain CPAs quotes a flat monthly fee after a diagnostic of your actual books, each level including clean CPA-reviewed books, a pay-yourself-first cash system, and the business tax return.
What is job costing and do I need it?
Job costing means tracking income and expenses by job or project, not just by month, so you can see which jobs actually made money instead of guessing from the total. Most contractors need it at some level. How much detail you need depends on how many jobs run at once and how tight your margins are.
What is retainage and how should it be tracked?
Retainage is the portion of each progress payment, commonly 5 to 10 percent, that a customer or general contractor withholds until the job is substantially complete or the punch list is closed. It is money you have already earned but cannot spend yet, and it needs to sit on your books as a receivable, not disappear from the numbers until it lands.
Does progress billing change how my books are kept?
Yes. Progress billing means you invoice by percentage of completion rather than one lump sum at the end, so revenue lands in pieces that do not line up with when the cost was actually incurred. Books built for progress billing track what has been billed, what has been collected, and what is still owed, separately.
Do you provide job costing or full project-cost accounting?
We keep clean, CPA-reviewed books that track income and cost by job, which covers what most owners actually need to see which jobs paid off. We do not build deep project-cost accounting systems the way a project office would. If that is what your operation needs, we will tell you honestly rather than take on work we cannot do well.
Ready when you are
Want your own numbers instead of the general answer?
The In-Depth Diagnostic Review goes inside your actual QuickBooks and puts it in writing, with a recorded walkthrough. $497, credited toward your first month, report back in about a week.