What is the best bookkeeping software for contractors?
For most small to mid-size contractors, QuickBooks Online is the answer. It handles job costing, integrates with nearly everything, and every accountant and bookkeeper knows how to work with it. That last point matters more than you might think when tax time rolls around or you need help cleaning up your books.
What makes contractor bookkeeping different from other small businesses is job costing. You need to know which jobs made money and which ones ate your profit. Generic bookkeeping tracks income and expenses by category. Contractor bookkeeping tracks them by project so you can see that the Thompson remodel brought in $45,000 and cost $38,000 while the Garcia addition brought in $60,000 and cost $52,000. Without job costing, you only know your total profit for the month. You have no idea which jobs contributed to it.
QuickBooks Online Plus or Advanced includes project tracking features that work for job costing when configured properly. You can assign income and expenses to specific projects, track labor by job, and run profitability reports. The Simple Start and Essentials plans lack the project features contractors need, so don’t cheap out on the wrong tier.
Construction-specific software like Buildertrend, CoConstruct, or Foundation exists for larger operations. These tools combine project management, estimating, and accounting in one platform. They’re powerful but come with higher costs and steeper learning curves. Most contractors under $2 million in revenue don’t need that complexity. The integration between your estimating software and QuickBooks usually works fine.
Xero is a solid alternative to QuickBooks with similar features. It’s popular with some accountants and has good project tracking. The main drawback is fewer contractors use it, which means fewer integrations with contractor-specific tools and potentially more friction if you switch accountants.
FreshBooks and Wave work for freelancers and simple service businesses but fall short for contractors who need real job costing. They’re designed for invoicing and basic expense tracking, not tracking costs across complex multi-month projects.
The software matters less than how it’s set up. QuickBooks out of the box doesn’t automatically organize your books for job costing. Someone needs to configure your chart of accounts, set up your items and services correctly, and establish a workflow for consistently assigning transactions to jobs. Most contractors who think their software isn’t working actually have a setup problem, not a software problem.
If you’re already using something that’s working, switching probably isn’t worth the disruption. If you’re starting fresh or your current system is a mess, QuickBooks Online Plus is the safe choice. Small business bookkeepers in New Mexico who work with contractors can help you configure it properly from the start so you’re actually getting useful job cost data instead of just another software subscription you don’t fully use.
Santa Fe's Small Business Bookkeeper
The Next Step:
A Quick Conversation
Tell us about your business and what you're dealing with. We'll listen, ask a few questions, and give you a straightforward quote.
More Questions
What is the difference between job costing and process costing?
Job costing tracks expenses by individual project or customer. Process costing tracks expenses by department or production phase for companies making identical products in continuous batches. Most small businesses need job costing.
Read answerWhat bookkeeping mistakes do contractors commonly make?
The biggest mistake is not tracking costs by job, which makes it impossible to know which projects actually make money. Other common errors include mixing personal and business expenses, mishandling subcontractor 1099s, and waiting too long to reconcile accounts.
Read answerShould I have a separate bank account for each rental property?
Not necessarily. If all your properties are in one LLC or your personal name, a single operating account with proper bookkeeping can track each property separately. But if properties are in different LLCs, you need to keep the accounts separate to maintain legal protection.
Read answerHow do I track tenant payments and late fees?
Treat each property or unit as a separate customer in your accounting software and invoice for rent monthly. When payments come in, apply them against open invoices so you always see who owes what.
Read answerHow do I track equipment costs across multiple job sites?
Track equipment hours or days on each job site, then allocate depreciation, fuel, and maintenance costs proportionally. Set up your accounting software to assign these allocated costs to specific jobs.
Read answerHow do I handle retainage in construction bookkeeping?
Track retainage as a separate receivable on your balance sheet, not as regular accounts receivable. Set up dedicated accounts for both retainage you're owed and retainage you're holding from subcontractors.
Read answer
