A bookkeeper keeps your business’s financial records organized, accurate and up to date.
For contractors, this can include recording and categorizing transactions, reconciling bank and credit card accounts, managing accounts receivable and payable, tracking job-related costs and preparing financial reports.
The exact services depend on the business and its needs.
Good bookkeeping should do more than record transactions. It should give you a clearer picture of how your business is performing.
Not every contractor needs the same level of bookkeeping support.
If your business is small and your bookkeeping is simple, you may be able to manage some of it yourself.
But as revenue, employees, subcontractors, jobs and transactions increase, bookkeeping can become much more time-consuming and complicated.
A bookkeeper can help you keep your records organized and give you more reliable financial information without requiring you to spend your evenings doing the books.
The better question isn’t always “Do I need a bookkeeper?”
It’s:
“Is doing my own bookkeeping still the best use of my time?”
Ideally, bookkeeping should be maintained throughout the month rather than left until year-end.
Bank and credit card accounts should generally be reconciled monthly, while businesses with higher transaction volumes may benefit from more frequent processing and review.
Keeping your books current means you can access more useful financial information when you actually need it.
Waiting until tax time to catch up can make it much harder to identify problems while there’s still time to do something about them.
A contractor’s monthly bookkeeping routine may include:
- Reconciling bank accounts
- Reconciling credit cards
- Recording and categorizing transactions
- Reviewing accounts receivable
- Reviewing accounts payable
- Recording payroll-related transactions
- Tracking job-related costs
- Reviewing subcontractor expenses
- Reviewing financial statements
- Checking for unusual or missing transactions
- Reviewing cash flow
The exact process will depend on the size and complexity of the business.
If you’re not sure where to start, download the Contractor’s Monthly Bookkeeping Checklist from Bricked Bookkeeping.
GET THE FREE CHECKLIST
Job costing means tracking the revenue and costs associated with a specific job.
For example, a contractor may track:
- Labour
- Materials
- Subcontractors
- Equipment
- Other direct job costs
This allows you to compare what you expected a job to cost with what it actually cost.
Without job costing, you may know your business generated $500,000 in revenue but have very little insight into which jobs actually generated the best profit.
For contractors, that information can be extremely valuable when estimating and pricing future work.
You need to compare the revenue generated by a job against the costs associated with completing it.
A simple example:
Job revenue: $50,000
Direct job costs: $35,000
Gross profit: $15,000
But the real value comes from comparing estimated costs with actual costs.
If you consistently underestimate labour, materials or subcontractor costs, your actual margins may be much lower than expected.
Job costing helps you identify those patterns.
No.
Your bank balance tells you how much cash is currently in your account.
Profit measures the difference between your revenue and expenses according to your accounting records and accounting method.
You could have $40,000 in the bank while also having significant bills, payroll, GST obligations or other commitments coming due.
Likewise, you could have a profitable business but experience cash-flow pressure because customers haven’t paid their invoices yet.
That’s why contractors should look at profitability and cash flow, not just their bank balance.
Very important.
Contractors often complete work and incur costs before receiving payment from the customer.
If invoices aren’t followed up consistently, money can remain outstanding for weeks or months.
You should know:
- How much customers currently owe
- Which invoices are overdue
- How long they’ve been outstanding
- Which customers have the largest balances
- When you reasonably expect payment
Strong accounts receivable management can help you maintain better visibility over your cash flow.
Accounts payable is the money your business owes to vendors, suppliers, subcontractors and other businesses.
Keeping track of what you owe helps you understand your upcoming cash requirements.
For contractors, this can be especially important because you may have significant costs associated with materials, subcontractors, equipment and other project expenses.
Your books should make it easy to see what is outstanding and what needs attention.
QuickBooks Online can be a useful accounting platform for many contractors, particularly when the bookkeeping system is set up appropriately for the business.
The software itself, however, isn’t what makes your bookkeeping work.
Your chart of accounts, processes, job tracking, transaction categorization and reporting structure all matter.
In other words:
Good software + poor processes = poor information.
The goal is to build a bookkeeping system that gives you the information you actually need to run your business.
You can expect more than someone who simply categorizes transactions and sends you financial statements.
Bricked Bookkeeping is built to give contractors clean books, reliable financial information and a clear understanding of how their business is performing.
Once you’re onboarded, we take care of your agreed-upon bookkeeping services on a consistent monthly schedule. You’ll know what information we need from you, when your books will be completed and what to expect from your reporting.
Our goal is to make the financial side of your business feel organized and manageable. So you can spend less time chasing paperwork and more time running your business.
We’ll start with an onboarding process designed to understand how your business operates and make sure your bookkeeping is set up properly.
We’ll review your current bookkeeping, accounts, financial processes and reporting needs. If your books need cleanup or catch-up work, we’ll identify what needs to be addressed and discuss the scope with you before proceeding.
From there, we’ll establish a consistent monthly workflow so you know exactly what to expect.
Your books are maintained throughout the month according to your service package, with a monthly check-in to review your financial information and discuss anything that needs your attention.
You can also reach out between check-ins when questions or issues come up.
The goal isn’t to overwhelm you with financial information. It’s to make sure you understand what’s happening in your business and know where your attention is needed.
Your monthly check-in is a simple conversation about what’s happening in your business financially.
Depending on your business and service package, we may review:
- Your revenue, expenses and profit
- Cash flow and upcoming financial needs
- Outstanding customer invoices and bills
- Job or project profitability
- Important changes or unusual activity
- Any missing information or bookkeeping issues
- The key actions or decisions that need your attention
We’ll focus on the numbers that matter most to your business and explain what they mean in practical terms.
You leave the check-in knowing what happened, what matters and what needs to happen next.
Absolutely.
Your bookkeeper and CPA have different roles, and they can work together.
We’ll maintain organized financial records and provide the information your CPA needs for tax preparation and year-end work. If something falls outside the scope of bookkeeping or requires tax or accounting advice, we’ll flag it so you can discuss it with your CPA.
That’s okay.
You’re not the first contractor to fall behind on bookkeeping.
We’ll first assess the condition of your books and determine what needs to be cleaned up or brought current. If additional catch-up or cleanup work is required, we’ll explain the scope and cost before starting.
The goal is to get you from “I don’t even know where things stand” to a reliable financial baseline you can actually work from.
That’s exactly why the monthly check-in exists.
You don’t need to become an accountant to understand your business numbers.
We’ll explain what you’re seeing in practical terms and focus on the numbers that matter to your business.
You know how to run the job. We’ll help you understand the financial side of the business.
We’re not interested in handing you a pile of financial statements and telling you to figure it out.
The goal is to give you financial clarity.
That means maintaining accurate books, identifying issues, helping you understand your numbers and giving you the information you need to make better business decisions.
Because at the end of the day, bookkeeping should help you run your business—not become another job you have to manage.