The short answer
Bookkeeping for general contractors in Arizona covers progress billing, retainage, a work in progress schedule, over and under billing, subcontractor 1099s and financials for bonding. AZ Easy CPA in Chandler sets this up in QuickBooks and keeps it current, so your profit reflects the work actually done.
How does progress billing work in QuickBooks?
Progress billing means invoicing a job in stages, usually by percent complete or by line item on a schedule of values. QuickBooks can track the contract amount, each progress invoice and what is left to bill, as long as the estimate and job are set up correctly from the start.
We set up each contract as a project with its estimate or schedule of values, then create progress invoices from it. That gives you a running view of billed to date and remaining contract on every job.
Change orders get added to the contract as they are approved, so the numbers keep up with the real scope of the work.
What is retainage and how is it recorded?
Retainage is the portion of each progress payment the owner or general contractor holds back until the job is complete, often to make sure punch list items get done. It is money you have earned but not yet collected, so it belongs in its own receivable account.
If retainage is not tracked separately, it tends to get forgotten or written off by accident. We record it as retainage receivable on each job, and if you hold retainage from your own subs, we record that as retainage payable.
- Retainage receivable by job and customer
- Retainage payable to subcontractors
- A list of retainage due at closeout
- Follow-up reminders when jobs reach completion
What is a WIP schedule, and what are over and under billing?
A work in progress schedule lists every open job with its contract amount, estimated total cost, cost to date and billed to date. From that, it shows whether you have billed more than the work completed (over billing) or less (under billing), which changes what your true profit is.
Here is the idea in plain terms. If a job is 40 percent complete based on cost but you have billed 60 percent of the contract, you are over billed. That extra cash is real, but the profit has not been earned yet, so it sits on the balance sheet as a liability.
| Situation | What it means | Where it shows |
|---|---|---|
| Over billed | Billed ahead of the work done | Liability on the balance sheet |
| Under billed | Work done but not yet billed | Asset on the balance sheet |
| Even | Billing matches progress | No adjustment needed |
Sureties and lenders pay close attention to the WIP schedule, and steady under billing can be an early sign of cash trouble. Chris will walk you through yours each month.
How do you track subcontractors and 1099s?
General contractors rely on subs for much of the work. We collect W-9s, track every payment by sub and by job, keep an eye on lien waivers and insurance certificates as you provide them, and have 1099 totals ready at year-end.
Sub bills should be coded to the job and cost code they belong to, so job costs are complete. Paying a sub without a W-9 on file is one of the most common year-end headaches, so we help you get that habit in place early.
Make a W-9 part of your sub onboarding, before the first check goes out. It is far easier than chasing it in January.
What do bonding companies need from a general contractor?
Surety companies usually want CPA prepared financial statements, a current WIP schedule and evidence of working capital. AZ Easy CPA prepares GAAP format compiled financial statements and can talk through whether your surety needs a review or audit instead.
Bonding capacity is often tied to what your financials show, so clean monthly books and an accurate WIP schedule make the conversation with your agent easier. See our compiled financial statements page for how compilations work.
Arizona transaction privilege tax for prime contracting has its own rules. That is something to get right with your tax partner, and we keep your contract income organized so the reporting is straightforward. Tax and payroll are handled through our trusted partners.
Can you help a contractor with messy or outdated books?
Yes. Many contractors come to us with jobs mixed together, retainage never recorded or progress invoices that do not tie to contracts. We start with a cleanup to sort out open jobs, then build the job structure and move into monthly bookkeeping.
Learn about our bookkeeping cleanup process, or see how we help other contractors and trade businesses. For growing contractors who want help with cash flow and planning, our fractional CFO service is another option.
How do we get started?
Free phone call
Tell Chris about your jobs, contract types, subs and bonding needs.
Review open jobs
We look at your current contracts, billing and how jobs are set up in QuickBooks.
Build the job structure
We set up projects, progress billing, retainage accounts and sub tracking.
Monthly close with WIP
Each month we reconcile, update the WIP schedule and review it with you.
Statements when needed
When your surety or lender asks, we prepare compiled financial statements.
General Contractors questions
Do I need a WIP schedule if I am a small contractor?
If your jobs run longer than a month or span year-end, a WIP schedule is worth having. Even a simple one shows whether billing is keeping up with the work.
What is the difference between over billing and under billing?
Over billing means you have billed more than the work completed, and under billing means you have completed more than you have billed. Both affect your true profit and your balance sheet.
Can QuickBooks Online handle progress billing?
Yes, QuickBooks Online supports progress invoicing from estimates and project tracking. For larger or more complex operations, we can talk through whether other tools fit better.
Will you prepare statements for my bonding agent?
Yes, we prepare compiled financial statements in GAAP format. If your surety asks for a review or audit, we will talk through what they need.
Do you handle prime contracting TPT?
We do not prepare tax filings. We keep your contract income organized so your tax partner can handle transaction privilege tax correctly.
How much does contractor bookkeeping cost?
Monthly bookkeeping plans typically start around $300 a month. Contractors with many open jobs and a WIP schedule usually need more, so we quote after a free call.
Do you work with contractors across Arizona?
Yes. We are based in Chandler and work with contractors throughout Arizona using a secure upload portal and cloud tools.
Bookkeeping near you
From our Chandler office we work with businesses across the East Valley and Arizona, in person or online.
