Why small habits cause big distortions
Most contractor bookkeeping problems are not dramatic errors. They are small, repeated shortcuts that compound until job reports stop matching reality and nobody trusts the numbers.
1. Coding job costs to overhead
Materials, subs or equipment posted to general expense make finished jobs look more profitable and overhead look bloated. Every cost tied to a job should carry that job.
2. Leaving labor burden off the job
Payroll taxes, workers' comp and benefits are real job costs. Charging only gross wages to jobs overstates labor margin, often by 20–35% of the labor line.
3. Not tracking change orders separately
Extra work done without an approved, billed change order shows up as cost with no matching revenue. Track pending change orders until they are approved and invoiced.
4. Treating retainage as cash
Retainage is a receivable that may sit for months. Booking it as collected, or forgetting it, distorts both cash planning and the balance sheet.
5. Months of unreconciled accounts
Bank, credit card and loan accounts that are not reconciled monthly hide duplicate entries, missing deposits and personal spending, and they make every report unreliable.
6. Undeposited funds that never clear
Payments recorded but never matched to a deposit inflate receivables and cash on paper. A growing undeposited funds balance is a classic cleanup warning sign.
7. No monthly close
Without a defined close, numbers are never final, and job reports change every time someone looks. A simple monthly checklist fixes more than most software changes.
When to get help
If your numbers raise more questions than they answer, a short outside review usually shows where the gaps are and which fix matters first. A 20-minute financial review looks at where your books, job reporting and cash visibility stand today — no pressure, and no commitment to an engagement.
Want this reviewed against your actual numbers?