# QuickBooks and Bookkeeping for General Contractors

Bookkeeping for general contractors centers on job costing: every dollar of revenue and cost tied to a specific project, including change orders, progress billings, retainage and sub payments. QuickBooks can do this with projects, items and classes set up correctly. Without that setup, a GC knows whether the year was profitable but not which jobs made the money.

## Key takeaways

- Track every project as its own job in QuickBooks, with costs split into labor, materials, subs and other.
- Bill progress draws on schedule and invoice change orders separately so none get lost in the final.
- Retainage is money you've earned but can't collect yet. Track it as its own receivable.
- Collect W-9s and certificates of insurance from subs. The 1099-NEC threshold is $2,000 for payments made after Dec. 31, 2025.
- BRIX keeps invoices, payments and categorized expenses synced with QuickBooks. It doesn't file taxes or give tax advice.

## What makes GC bookkeeping different?

GC bookkeeping is different because one project can run for months, get billed in stages, change scope halfway through and hold back a percentage until closeout. A service business can look at monthly profit and loss. A general contractor needs to know, job by job, whether the money collected so far matches the work done so far.

## Setting up QuickBooks for a general contractor

1. **Turn on projects** (QuickBooks Online) or use customer:job (Desktop) so each remodel or build is its own job. See [classes vs. projects](https://www.brix.so/learn/quickbooks-classes-vs-projects).
2. **Build cost codes as items or accounts:** demo, framing, plumbing, electrical, HVAC, drywall, finish carpentry, flooring, paint, permits. Match how you estimate so you can compare estimate to actual.
3. **Separate sub costs from your own labor and materials.** It makes 1099s, workers' comp audits and job costing cleaner.
4. **Add accounts for retainage receivable and customer deposits** so those balances never hide inside regular receivables or income.
5. **Use a contractor chart of accounts.** See [chart of accounts](https://www.brix.so/learn/chart-of-accounts) and [how to do job costing in QuickBooks](https://www.brix.so/learn/how-to-do-job-costing-in-quickbooks).

## Progress billing and draws

Progress billing means invoicing in stages as work is completed instead of waiting for the end. Residential remodels usually bill by milestone (deposit, rough-in, drywall, cabinets, final). Commercial work often bills by percentage complete against a schedule of values, sometimes on AIA G702/G703 forms.

> **Illustrative draw schedule: $72,000 kitchen remodel**
>
> Deposit at signing: $7,200 (10%). Rough-in complete: $21,600 (30%). Drywall and cabinets set: $21,600 (30%). Counters and trim: $14,400 (20%). Final after punch list: $7,200 (10%).
>
> Change order #1 (relocate island outlet, add pendant circuit): $1,350, invoiced separately on approval.
>
> Example numbers only. Deposit limits vary by state; see [contractor deposit laws](https://www.brix.so/learn/contractor-deposit-laws).

See [progress billing](https://www.brix.so/learn/progress-billing), [AIA billing](https://www.brix.so/learn/aia-billing) and [percentage of completion](https://www.brix.so/learn/percentage-of-completion) for the details.

## Change orders and retainage

Change orders should hit the books as their own line or invoice, tied to the job, the day they're approved. If they only show up in the final bill, homeowners forget agreeing to them and you end up negotiating your own margin. See [change order](https://www.brix.so/learn/change-order).

Retainage is a percentage of each payment held back until the job is complete, common on commercial and some larger residential contracts. It's earned income you can't collect yet, so track it as a separate receivable and follow up the day closeout is signed. See [retainage](https://www.brix.so/learn/retainage).

## WIP reports: are your jobs over- or under-billed?

A work-in-progress report compares what you've billed on each job with what you've earned based on costs to date. Over-billing means you've collected ahead of the work (a cash cushion that's really a liability). Under-billing means you've done work you haven't invoiced. Banks and bonding companies often ask for WIP reports. See [WIP report](https://www.brix.so/learn/wip-report) and [surety bond](https://www.brix.so/learn/surety-bond).

## Subcontractors: W-9s, 1099s, COIs and lien waivers

Collect a W-9 before the first payment. For payments made after Dec. 31, 2025, the IRS requires a Form 1099-NEC for non-employees you pay $2,000 or more in a year ($600 for 2025 payments). If a sub won't provide a taxpayer ID, the IRS backup withholding rate is 24%. Keep certificates of insurance current, and collect a lien waiver with each payment. See [1099 for subcontractors](https://www.brix.so/learn/1099-for-subcontractors), [certificate of insurance](https://www.brix.so/learn/certificate-of-insurance) and [lien waiver](https://www.brix.so/learn/lien-waiver).

## Taxes general contractors should plan for

- **Quarterly estimated taxes** if you're a sole proprietor, partner or S corp owner. See [quarterly estimated taxes for contractors](https://www.brix.so/learn/quarterly-estimated-taxes-for-contractors) and the [quarterly estimated tax calculator](https://www.brix.so/tools/quarterly-estimated-tax-calculator).
- **Sales and use tax on materials,** which differs by state and by whether the job is a capital improvement. See [sales tax on labor vs. materials](https://www.brix.so/learn/sales-tax-on-labor-vs-materials) and [use tax for contractors](https://www.brix.so/learn/use-tax-for-contractors).
- **Entity choice** as you grow. See [S corp vs. LLC for contractors](https://www.brix.so/learn/s-corp-vs-llc-for-contractors).
- **Equipment and vehicle deductions.** See [Section 179](https://www.brix.so/learn/section-179-deduction) and [contractor tax deductions](https://www.brix.so/learn/contractor-tax-deductions-list).

## What BRIX automates in a GC's books

**General contractor bookkeeping and BRIX**

| Task | BRIX | Still yours (or your accountant's) |
| --- | --- | --- |
| Deposit, draw and change order invoices | Creates invoices and chases unpaid ones | Deciding the draw schedule |
| Getting invoices and payments into QuickBooks | Syncs customers, invoices and payments | Reviewing the job cost reports |
| Expense categorization | Keeps expenses categorized | Approving cost codes |
| 1099 subs | Tracks payments to 1099 subcontractors | Filing the 1099s (or your preparer) |
| Quarterly estimated taxes | Reminds you of the dates | Calculating and paying |
| WIP and AIA pay apps | Keeps invoice data clean | Producing the WIP report and AIA forms |

_BRIX does not file taxes, act as a CPA or give tax advice._

The jobs that feed these books start with [the AI receptionist](https://www.brix.so/for/general-contractor/ai-receptionist) and [bid follow-up](https://www.brix.so/for/general-contractor/sales). Overview: [general contractor software](https://www.brix.so/for/general-contractor).

BRIX turns deposits, draws and change orders into invoices and chases them, syncs customers, invoices and payments with QuickBooks, keeps expenses categorized, tracks 1099 subs and reminds you of quarterly estimated tax dates. It doesn't file taxes or give tax advice.

- [Invoicing and payments](https://www.brix.so/features/invoicing-payments): Turns finished jobs into invoices and politely chases unpaid ones until the money is in your account.
- [QuickBooks sync](https://www.brix.so/integrations/quickbooks): Syncs customers, invoices and payments with QuickBooks so the books match the jobs.
- [Bookkeeping and tax help](https://www.brix.so/features/bookkeeping-taxes): Keeps expenses categorized, tracks 1099 subcontractors and sales tax, and reminds you of quarterly estimated tax dates. BRIX does not file taxes or give tax advice.

## Frequently asked questions

### Is QuickBooks good for general contractors?

QuickBooks works well for most small and mid-size GCs if it's set up with projects, cost codes and separate accounts for retainage and deposits. Larger contractors with heavy AIA billing and WIP needs sometimes move to construction-specific accounting software.

### Should general contractors use cash or accrual accounting?

It depends on your size, contracts and what your bank or bonding company needs. Accrual gives a truer picture of job profitability; cash is simpler. IRS rules on which methods you can use depend on factors like average gross receipts, so decide with your CPA.

### How do I track change orders in QuickBooks?

Add each approved change order as its own line or invoice tied to the project, using the same cost codes as the original estimate. That keeps estimate-vs-actual reports honest and prevents changes from disappearing into the final bill.

### What is a good profit margin for a general contractor?

We don't cite a single industry figure because margins vary by project type, region and how much work you sub out. Track gross margin per job and net margin for the business, and price new work with your real overhead using the overhead rate and markup calculators.

### Do I need to send 1099s to my subs?

Generally yes for unincorporated subs you pay for services above the IRS threshold: $2,000 for payments made after Dec. 31, 2025 ($600 for 2025 payments). Most payments to corporations are exempt. Collect a W-9 before paying and confirm specifics with your tax preparer.

### Can BRIX produce AIA pay applications or WIP reports?

No. BRIX creates and chases progress invoices and keeps invoice and payment data clean in QuickBooks, which makes WIP and pay apps easier for you or your accountant to produce.

## Related

- [General Contractor Software That Runs the Office While You Run the Job](https://www.brix.so/for/general-contractor)
- [AI Answering Service for General Contractors and Remodelers](https://www.brix.so/for/general-contractor/ai-receptionist)
- [General Contractor Sales: Following Up and Winning More Bids](https://www.brix.so/for/general-contractor/sales)
- [What Is Progress Billing?](https://www.brix.so/learn/progress-billing)
- [What Is Retainage in Construction?](https://www.brix.so/learn/retainage)
- [What Is a WIP Report (Work-in-Progress Schedule)?](https://www.brix.so/learn/wip-report)
- [How to Do Job Costing in QuickBooks Online](https://www.brix.so/learn/how-to-do-job-costing-in-quickbooks)
- [QuickBooks for contractors: the right version, real job costing and a sync that keeps the books matched to the jobs](https://www.brix.so/integrations/quickbooks)
- [Bookkeeping for contractors that keeps your books tax-ready all year](https://www.brix.so/features/bookkeeping-taxes)
- [AI Receptionist & CRM for General Contractors in Rochester, NY](https://www.brix.so/for/general-contractor/rochester-ny)

## Sources

- [IRS — Form 1099-NEC and independent contractors FAQ ($600; $2,000 for payments made after Dec. 31, 2025)](https://www.irs.gov/faqs/small-business-self-employed-other-business/form-1099-nec-independent-contractors/form-1099-nec-independent-contractors) (checked 2026-10-12)
- [IRS — Instructions for the Requester of Form W-9 (backup withholding rate 24%)](https://www.irs.gov/instructions/iw9) (checked 2026-10-12)

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Written by BRIX Editorial Team. Last updated 2026-10-12. General information, not tax, legal or financial advice.
Canonical: https://www.brix.so/for/general-contractor/bookkeeping