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.
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More Questions
How do I set up job costing for my construction business?
Job costing tracks every cost against the specific project that incurred it so you know which jobs make money. Setup requires defining cost categories, configuring your accounting software for project tracking, and establishing consistent processes for capturing labor and expenses.
Read answerWhy are my construction job estimates always off?
Your estimates are probably off because you don't have accurate data on what past jobs actually cost. Without tracking actuals against estimates, you keep repeating the same mistakes on every bid.
Read answerHow do I know if a construction project is profitable?
A project is profitable when revenue exceeds all costs including allocated overhead. Most contractors undercount costs by missing their own time, vehicle use, and overhead allocation, making jobs look more profitable than they are.
Read answerWhat expenses should contractors track for each job?
Track labor hours, materials, subcontractor invoices, equipment costs, and permits for every job. Each expense needs a job code before it hits your books. Without this discipline, you won't know which projects actually make money.
Read answerHow do I track labor costs by project in QuickBooks?
Enable projects in QuickBooks, set up time tracking that assigns hours to each project, and connect it to payroll so hours convert to actual labor costs. The setup is straightforward but requires daily discipline from your crew.
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