Industry
Bookkeeping for contractors: how job-site money gets away from you
Contractor books fail in 2 directions at the same time. Money leaks out through payables, a supplier or sub paid twice because nobody could tell which invoices were settled. And money never arrives through receivables, because a chunk of finished work never got billed. Both leaks come from the same cause: money moving on several jobs at once with no process underneath it.
Why contractor books get messy faster than most
A retail shop has 1 register. A contractor might have 4 open jobs, each with its own materials runs, its own subs, its own deposits and progress payments. Costs arrive from every direction: the supply house account, a card swiped at the big-box store, a sub’s invoice by text at 9pm. Client billing happens in pieces as phases finish, which means it’s easy for a phase to finish quietly and never turn into an invoice.
None of this is a character flaw. It’s what happens when a business built on physical work generates paperwork faster than the evening has hours.
A general contractor’s cleanup, from my desk
I worked with a busy general contractor, multiple job sites, materials moving, subs to pay. His nights were spent frantically chasing paperwork, and the chase still wasn’t working. When we dug into his payables and receivables, we found both leaks running at once: some subcontractor invoices had been paid twice, and several clients had never been billed for whole pieces of their projects.
Read that again as money. He was donating overpayments to his subs while leaving his own earned revenue uncollected, and working every night to keep the system that produced that outcome.
The fix is a process, not more effort
The cleanup wasn’t heroic. We streamlined payments and invoicing, and put one habit at the center: match every purchase order to its invoice, and every invoice to its payment, before money moves. That single habit eliminates overpayment, because a resent invoice gets recognized instead of paid again. Billing got the same treatment on the way out, so a finished phase turns into an invoice on a schedule, not when someone remembers.
The hours he’d spent chasing receivables dropped, the double payments stopped, and the books started telling him where each job stood. Payables and receivables are exactly the kind of work I take off an owner’s plate.
What good contractor books give you
- Payables that can’t double-pay. Every invoice checked against its PO and payment history before it’s paid.
- Billing that can’t skip work. Finished phases become invoices on a rhythm, so your receivables match reality.
- Cash you can see by job. Which jobs are feeding the business and which are eating it, while there’s still time to act.
- Evenings. The chase ends. That one doesn’t show up on a report, and it’s the one owners mention first.
If you’re a contractor around Greater Philadelphia, or anywhere in the US virtually, and your nights sound like the story above, see my dedicated bookkeeping for contractors or tell me about your jobs. I’ll look at your books, tell you honestly what I find, and I promise the pile is smaller than it feels.
Quick answers
What makes bookkeeping different for contractors?
Volume and simultaneity. A contractor has money moving on several jobs at once, materials bought from different suppliers, subs invoicing on their own schedules, and clients billed in pieces as work progresses. Without a process that ties each cost and each invoice to a job, the books turn into a pile of unrelated transactions.
How do contractors end up paying subcontractors twice?
Sub invoices arrive by email, text, paper in the truck, and a follow-up resend when payment is slow. With no system matching invoices to purchase orders and payments, the resend looks like a new bill and gets paid too. It's one of the most common leaks I find in contractor books.
What is purchase order to invoice matching?
It's the habit of checking every incoming invoice against the purchase order or agreement behind it, and against payments already made, before it gets paid. The match answers 3 things at once. Did we order this, is the price right, and have we already paid it?
How often should a contractor's books be updated?
With money moving on multiple jobs, monthly is the floor and busy seasons deserve more frequent attention. The point is catching an unbilled client or a doubled payment while the job is still open, because collecting gets much harder after everyone has moved on.