What accounting should a siding contractor do?
Start with the basics that apply to any business. Keep business and personal finances completely separate. Use a dedicated business bank account and credit card for every business transaction. This makes tax time easier and protects you if you ever get audited.
The accounting that actually matters for siding contractors is job costing. Generic bookkeeping tells you how much money came in and went out last month. Job costing tells you whether the Johnson vinyl siding job made money or lost it. Without tracking costs by project, you have no idea which jobs are profitable and which ones you should stop bidding.
Track materials by job from the start. Siding materials are expensive. Vinyl, fiber cement, wood, metal. Each has different cost structures. When you buy materials, code them to the specific project in your accounting software. Waiting until month end to allocate costs means you’ll guess wrong or forget entirely.
Labor tracking matters just as much. If you have a crew, track hours worked on each job. This is how you know your actual labor cost per project, not just what you estimated when you bid it. The difference between your estimate and actual hours is where profit disappears without you noticing.
Handle subcontractors correctly if you use them. Get W-9s before you pay anyone. Track payments by job so you know your true sub costs per project. Issue 1099s at year end for anyone you paid over $600. The IRS matches 1099s to tax returns, so skipping this step creates problems for both of you.
Reconcile your bank and credit card accounts weekly. Catching errors while you remember the context is easier than reconstructing transactions three months later. Weekly reconciliation also helps you spot cash flow issues before they become emergencies.
Invoice promptly and track receivables. Many siding contractors wait too long to bill or don’t follow up on unpaid invoices. Set up a system to invoice as soon as work is complete and follow up at 30, 45, and 60 days. A construction bookkeeper in American Fork can handle this if you don’t have time.
Plan for seasonality. Exterior work slows down in winter along the Wasatch Front. Your accounting should help you see this coming. Review cash flow projections quarterly so you’re not surprised when January arrives and you have payroll to cover but fewer active jobs.
Pay quarterly estimated taxes if you’re profitable. Utah and the IRS both expect quarterly payments. Waiting until April to pay everything at once results in penalties and interest. Your bookkeeper or accountant can calculate the amounts based on your year-to-date profit.
Construction job costing is the piece most siding contractors skip or do poorly. They track revenue and expenses overall but can’t tell you which jobs made money. That’s the difference between running a business and guessing. Set up job costing correctly from the start, or get help fixing it if your current system doesn’t give you project-level profitability.
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More Questions
How do I track costs for each construction project?
Assign every expense to a specific job at the time it happens using cost codes that match how you estimate. Track labor, materials, and subcontractor costs separately by phase, then compare budget to actual weekly.
Read answerHow do I track costs for a roofing company?
Track every roof as a separate job with costs broken into materials by type, labor hours, dump fees, and subcontractors. Compare actual cost per square to your estimate after each job to improve future bids.
Read answerWhy do my financial statements never make sense?
Financial statements that don't make sense usually stem from unreconciled accounts, inconsistent categorization, or mixing personal and business transactions. Sometimes the statements are accurate but require practice to interpret correctly.
Read answerWho handles contractor bookkeeping in Orem Utah?
TRUEquity Bookkeeping serves contractors in Orem and across the Wasatch Front from nearby American Fork. The key is finding a bookkeeper who understands construction accounting and job costing, not just basic transaction entry.
Read answerWhy are my job cost estimates always wrong?
Job cost estimates typically miss because you're not learning from completed projects. Without tracking actual costs by phase and cost code, every new estimate relies on gut feeling rather than real data from your own jobs.
Read answerWhat accounting do concrete contractors need?
Concrete contractors need job costing at the center of their accounting. Material tracking, equipment accounting, and labor costs all need to be coded by project to see which jobs actually make money.
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