Job costing that actually works
Revenue, materials, subs, and labor rolled up per project — so you know which jobs make money and which ones quietly don't.
GuideBookkeeping for Contractors
QuickBooks Online setup for contractors.
A practical, opinionated setup for contractors, subcontractors, and small service businesses. Structured around the work you actually do — jobs, materials, subs, and monthly close — not a generic QuickBooks tour.
01What contractors actually need
Clean material and vendor tracking
Every bill tied to the right job and the right COGS account, with receipts attached, so tax season and audits are uneventful.
Reliable monthly financials
A closed month, a real P&L, and a balance sheet that ties out — the foundation for pricing, hiring, and bidding decisions.
02The setup, step by step
- 01
Pick the right QuickBooks Online plan
For most contractors, QuickBooks Online Plus is the minimum practical tier — it unlocks classes, locations, and project (job) tracking, which are the features that make contractor bookkeeping actually useful. Simple Start and Essentials lack project profitability. Advanced is only worth it above roughly $1M in revenue or when you need custom user roles.
- 02
Build a contractor-friendly chart of accounts
Keep it flat and job-costable. Separate Cost of Goods Sold accounts for Materials, Subcontractors, Direct Labor, Equipment Rental, and Job Supplies. Keep general operating expenses (office, software, insurance, vehicle) in Expenses — not COGS. A short, disciplined chart of accounts is easier to close each month than a sprawling one built out of habit.
- 03
Turn on Projects and use them for every job
Projects are how QuickBooks tracks revenue, cost, and margin per job. Create a Project for every meaningful engagement, tag every bill, expense, timesheet, and invoice to that Project, and you get real job profitability without a separate system. This is where most contractors leave money and clarity on the table.
- 04
Track material costs and vendor bills the right way
Enter materials as Bills or Expenses tied to the Project, not as generic credit-card charges. Attach the vendor invoice or receipt to the transaction. If you use progress billing, invoice from the estimate so change orders and materials flow through cleanly. This one habit is the difference between a job that looks profitable and one that actually is.
- 05
Set up payroll or 1099 workflows deliberately
Employees go through QuickBooks Payroll (or a connected payroll provider) with direct-labor mapped to a COGS account. Subcontractors get set up as 1099 vendors from day one — collect the W-9 before the first payment, mark them as 1099-eligible, and QuickBooks will build the year-end 1099-NEC filing for you. Fixing this in January is far more expensive than doing it now.
- 06
Reconcile monthly and close the books
Every bank, credit card, and loan account gets reconciled every month against the statement — not against QuickBooks' running balance. After reconciliation, lock the period with a closing date and password. A monthly close is what turns bookkeeping into decision-ready financials: a real P&L, real job margins, and a balance sheet you can trust.
03A note on doing this yourself
A clean setup is worth doing once. Job costing and a disciplined monthly close are what turn QuickBooks from an expensive receipt drawer into a real financial system. If you'd rather not spend evenings inside QuickBooks, we handle setup, cleanup, and monthly close for contractors and service businesses directly.
Want us to set it up for you?
We set up QuickBooks Online for contractors, clean up prior periods, and run the monthly close so you get real financials without the evenings inside QuickBooks.