Short answer: Construction bookkeeping in Los Angeles tags every material charge, sub payment and labor hour to a job in QuickBooks, Xero and more, so you can see profit by job. It also tracks progress billing, change orders, retention and customer deposits. Subcontractor W-9s stay on file, so 1099-NEC forms are ready in January.
Why contractor books go wrong first
Most contractors start with one bank account and a pickup truck. Deposits from three jobs land on the same day, a supplier charge at the lumber yard covers two projects, and a sub gets paid by Zelle from your personal phone. The bank balance looks fine until a big job stalls and the money you thought was profit turns out to be next month's payroll.
Construction books break in specific ways. Costs are recorded by vendor, not by job. Change orders never make it into the invoice. Retention sits in a spreadsheet nobody updates. When you ask whether the kitchen remodel in Silver Lake made money, nobody can answer without a weekend of digging.
What we set up for a construction business
- Job costing in QuickBooks, Xero and more, so every material charge, sub payment and labor hour is tagged to a project.
- Progress billing that matches your contract, including change orders and the retention you hold back or are owed.
- A retention receivable you can see on the balance sheet, not in a notebook.
- Vendor records with W-9s on file, so 1099-NEC forms for subcontractors are ready in January.
- Separate tracking for deposits you collected before work started, so you do not spend money you have not earned yet.
- Monthly reconciliation of every bank and card account, including the card you use at the supply house.
Licensing and paperwork that touch the books
California requires a CSLB license for most work. Since January 1, 2025, the minor work exemption covers jobs under $1,000 in combined labor and materials, with no permit required and no employees on the job. Splitting a bigger job into small invoices to stay under that line is not allowed, and clean job records make it easy to show what each contract really was.
Inside the City of Los Angeles, your business also needs a Business Tax Registration Certificate from the Office of Finance, and the annual renewal is reported on gross receipts. Permit fees from LADBS, bond premiums and insurance renewals belong on the job or in overhead, and we keep them in the right place so your margins are honest.
We keep the books. Licensing questions go to CSLB, and tax filing goes to your CPA.
Reports a contractor can actually use
A profit and loss for the whole company tells you whether last year worked. It does not tell you which jobs to bid again. We send three reports each month that answer the questions contractors ask most: profit by job, so you can see which kinds of work carry the business; accounts receivable aging, so you can chase the general contractor who is 60 days late before it turns into 120; and a cash view that shows what is owed to suppliers and subs in the next few weeks.
If you use a bonding company or a bank line of credit, they will eventually ask for financial statements. Books that are reconciled every month, with retention and deposits shown correctly, make that conversation shorter.
How a typical month works
- Connect accounts Bank feeds, cards and your billing tool come into one ledger. Receipts can be forwarded by email or snapped from a phone.
- Code to jobs Each transaction is tagged to a project or to overhead. Anything unclear goes on a short list of questions for you.
- Reconcile and review Every account is tied out to the statement. Retention, deposits and unpaid invoices are checked against your contracts.
- Send the reports You get a profit and loss by job, an aging report of who owes you, and a list of anything that needs a decision.
If you are already behind
Plenty of contractors call after a slow year of no bookkeeping, or after the CPA sends back a shoebox with a note. We can rebuild past months first, then keep you current. Catch-up work starts with the bank statements, because they are the one record that is always complete, and then layers on job detail where your invoices and supplier statements allow it.
Where we work
We keep books for businesses across the City of Los Angeles, the Westside, the Eastside, the San Fernando Valley, the San Gabriel Valley, the Gateway Cities and the South Bay.
- Alhambra
- Arcadia
- City of Industry
- Commerce
- Diamond Bar
- Downey
- Downtown Los Angeles
- East Los Angeles
- El Monte
- Koreatown
- Lincoln Heights
- North Hollywood
- Pasadena
- Pomona
- San Fernando Valley
- Santa Fe Springs
- Santa Monica
- Sherman Oaks
- South Bay
- Van Nuys
- Vernon
- West Covina
- West Los Angeles
- Whittier
- Woodland Hills
Questions
Do you do certified payroll for public works jobs?
Certified payroll reports are prepared in your payroll system. We record the payroll in the books and make sure wages and taxes tie out, but we do not file certified payroll reports.
Can you track profit by job if I have never done it before?
Yes. We set up projects or tracking categories going forward and, where your records allow, tag past costs to jobs during catch-up.
Which software do you use for contractors?
Whatever you use now, including QuickBooks Online, QuickBooks Desktop and Xero. We work in it. If you use a field tool for estimates and invoices, we connect it where it supports that.
Do I need a license for small handyman jobs?
CSLB says jobs under $1,000 total, with no permit and no employees, fall under the minor work exemption. Check with CSLB for your situation.