Payless Taxes LLC | Accounting and Tax Blog

Workflow for Commercial Construction Bookkeeping

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A well-structured bookkeeping workflow ensures accurate financial tracking, compliance, and profitability for commercial construction businesses. Below is a streamlined process covering all key aspects:

1. Project Setup & Budgeting

✅ Create a New Project in Accounting & Project Management Software

  • Set up a job number and assign it in QuickBooks and your project management software (e.g., Procore, Buildertrend, or Knowify).
  • Define the budget categories (labor, materials, equipment, subcontractors, overhead, etc.).

✅ Enter Initial Budget & Cost Codes

  • Establish project estimates and cost codes based on your chart of accounts.
  • Use AIA billing or progress invoicing for contract-based payments.

2. Accounts Payable (AP): Managing Expenses

✅ Purchase Order (PO) & Vendor Setup

  • Issue purchase orders (POs) for materials and subcontractors.
  • Sync vendor data in QuickBooks and the project management software.

✅ Invoice Entry & Matching

  • Receive & verify invoices against POs and job cost codes.
  • Categorize expenses in QuickBooks and attach receipts for audit trails.

✅ Payment Processing

  • Use Bill.com, Melio, or QuickBooks Bill Pay to pay vendors on time.
  • Track retainage (if applicable) and ensure correct deductions.

3. Accounts Receivable (AR): Billing & Payments

✅ Progress Invoicing & AIA Billing

  • Generate AIA G702/G703 payment applications (if required).
  • Ensure invoices align with project milestones and retainage rules.

✅ Client Payment Collection

  • Accept payments via ACH, wire transfer, or check and apply them in QuickBooks.
  • Send automated reminders for overdue invoices.

✅ Bank Reconciliation

  • Match deposits to invoices in QuickBooks for accurate tracking.

4. Payroll & Labor Costing

✅ Time Tracking & Job Costing

  • Use TSheets (QuickBooks Time) or ClockShark for field crew tracking.
  • Assign hours directly to jobs for accurate labor cost allocation.

✅ Payroll Processing

  • Run payroll via QuickBooks Payroll, ADP, or Gusto with proper tax deductions.
  • Categorize wages, taxes, and benefits correctly in QuickBooks.

5. Financial Reporting & Compliance

✅ Job Costing & Profitability Analysis

  • Compare actual costs vs. budgeted costs for each project.
  • Run P&L by job reports to assess profitability.

✅ Cash Flow Management

  • Monitor cash inflows/outflows to avoid project funding gaps.
  • Forecast upcoming payments and expenses.

✅ Tax & Compliance Filings

  • Track sales tax, subcontractor 1099s, and worker comp costs.
  • Prepare for quarterly and annual tax filings.

6. Monthly & Year-End Closing

✅ Bank & Credit Card Reconciliation

  • Reconcile all transactions to ensure no missing payments or expenses.

✅ Financial Review with CPA

  • Conduct a monthly/quarterly financial review for tax planning.

✅ Prepare for Year-End Reports & Tax Filings

  • Organize W-2s, 1099s, and P&L statements for tax submission.

Key Tools for Streamlined Workflow

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✅ Payroll & Compliance: accurate payroll, tax filings, and 1099 management.

✅ AIA Billing & Progress Invoicing: Get paid on time with structured billing.

✅ Cash Flow Management: Stay ahead of expenses and never miss a payment.

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