Bookkeeping for Contractors: The Simple Guide to Clear, Stress-Free Finances

ContractorsTradesQuickbooks OnlineBookkeeping Tips
Written By Dustin

Introduction

Contractors are some of the hardest-working people in business — but also some of the most overwhelmed when it comes to bookkeeping.

If you’re an electrician, plumber, HVAC tech, landscaper, or any other trades contractor, you already know the feeling:

  • Your bank account doesn’t match what you think your profits should be.

  • Expenses pile up without a clear place to put them.

  • QuickBooks feels like a distraction from “real work.”

  • Tax time brings anxiety, not clarity.

This guide is a calm, no-judgement introduction to bookkeeping for contractors, written to help you understand what actually matters and what you can safely ignore.

Why Bookkeeping Is Harder for Contractors

Contractors deal with financial challenges that most businesses never experience:

  • Irregular payment schedules

  • Materials bought job-by-job

  • Unpredictable cash flow

  • Fuel, tools, subcontractors, and receipts everywhere

  • Jobs that run long or go over budget

  • Seasonal slowdowns or rush seasons

It’s no wonder bookkeeping feels overwhelming.

But the truth is: contractor bookkeeping becomes simple once you sort expenses into the right places.

What Contractors Really Need to Track (Only the Essentials)

Here’s the good news — you don’t need complicated systems to get clarity.

You only need five things:

1. Income (Money In)

Track what each job brings in. Not every contractor separates income properly, but doing so gives you visibility.

2. Job-Related Expenses

This includes:

  • materials

  • subcontractors

  • equipment rentals

  • fuel (when tied to specific job activity)

  • dump fees

  • job supplies

Poorly tracked job costs are the #1 reason contractors feel confused about their profits.

3. Overhead Costs

These are your business-running expenses:

  • software

  • phone bill

  • marketing

  • general vehicle expenses

  • tools

  • insurance

4. Labor (If Applicable)

If you have employees, labor costs often determine whether a job is profitable.

5. Cash Flow

Even profitable contractors struggle if collections are slow.

The Simplest Chart of Accounts for Contractors

If your Chart of Accounts is too complex, you will avoid categorizing.

Here’s a clean and simple version:

  • Materials

  • Subcontractors

  • Tools & Equipment

  • Fuel

  • Job Supplies

  • Equipment Rental

  • Vehicle Expenses

  • Insurance

  • Software

  • Marketing

  • Owner’s Draw / Equity

This removes clutter and gives you a clean financial picture.

QuickBooks Online Tips for Contractors

Here are a few calm, straightforward tips:

  • Keep income and expenses separate by job (when possible). It doesn’t need to be perfect. Just consistent.

  • Reconcile your accounts monthly. It keeps mistakes from piling up.

  • Use rules to automate recurring transactions. Fuel, software, subscriptions — save your time and energy.

  • Don’t overthink things. Messy books can always be cleaned up. Perfection is not the goal.

When Contractors Should Hire a Bookkeeper

You don’t need a bookkeeper to start. But most contractors hire one when:

  • bookkeeping steals time from jobs

  • expenses get confusing

  • tax time becomes stressful

  • you want clarity about profit

  • you want someone who understands your industry

If you’re nodding at any of these, support is available.

Calm, No-Judgement Support for Contractors

If you’re ready to have someone take bookkeeping off your plate, or simply want clarity without pressure, I’m here to help.

Not ready for a consultation? You can contact me with questions beforehand here.

Dustin