Bookkeeping for contractors, trades, and small businesses in Utah.

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How do I track subcontractors in QuickBooks?

Start by setting up each subcontractor as a vendor in QuickBooks. Go to Expenses, then Vendors, and add a new vendor for each sub you work with. Enter their legal business name exactly as it appears on their W-9, their address, and their tax identification number. Check the box that marks them as a 1099 contractor. If you skip this step, QuickBooks won’t track their payments for 1099 reporting and you’ll be scrambling in January.

Collect W-9s before you pay anyone. This is non-negotiable. Once you’ve paid a sub and they’ve moved on to another job, getting their tax info becomes a hassle. Make the W-9 part of your onboarding process before any work starts. Keep these on file because you’ll need them if the IRS ever asks.

The real value of tracking subcontractors properly shows up in construction job costing. When you enter a bill from a sub, assign it to the specific project or job. In QuickBooks Online, use the Projects feature. In Desktop, use Jobs under the customer name or Classes. Every invoice from every sub should hit a specific job, not a general subcontractor expense account.

This discipline lets you see exactly what subs cost you on each project. If you estimated $15,000 for drywall on a job and the actual sub invoices total $18,500, you know immediately. Without job-level tracking, that $3,500 overrun gets buried in your overall expenses and you never learn from it. Worse, you keep bidding drywall too low on future jobs.

Pay subcontractors through QuickBooks rather than writing checks outside the system. When you record payments in QuickBooks, the software automatically tracks cumulative amounts paid to each vendor. At year end, run the 1099 report to see who crossed the $600 threshold and needs a form. QuickBooks can generate and e-file the 1099s directly if you have the right subscription level.

Be consistent with expense accounts. Use a dedicated account like Subcontractor Expense or break it down further by trade if you want that level of detail. Some contractors prefer a single account with the job assignment doing the heavy lifting. Others want to see electrical subs separate from plumbing subs at the account level. Either approach works as long as you stick with it.

If you’re working as a contractor bookkeeper American Fork area and managing multiple subs across several active projects, review your subcontractor costs weekly. Waiting until the job is done means you find out about budget problems after there’s nothing you can do. Weekly reviews let you adjust on future phases or at least understand your true position before the project closes out.

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More Questions

Should I do my own bookkeeping or hire someone?

It depends on your transaction volume, industry complexity, and what your time is worth. DIY works for simple businesses with minimal transactions. Hiring makes sense when bookkeeping eats into revenue-generating time or when mistakes start costing you money.

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How do I know if my business is actually profitable?

Your bank balance doesn't tell you. Profit shows up on your income statement after accurate bookkeeping. Many owners also forget to account for their own labor, which makes the business look more profitable than it really is.

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What bookkeeping does a small business need?

Every small business needs transaction recording, monthly bank reconciliation, proper expense categorization, and basic financial statements. Additional needs like job costing or payroll depend on your business type and size.

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How 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.

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What financial reports matter for demolition contractors?

Job cost reports are the most important because they show profitability by project. Cash flow reports, equipment cost tracking, and accounts receivable aging also matter for demolition work.

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How do I handle warranty work in my books?

Track warranty work as a separate job or customer in your accounting software so you can see total warranty costs clearly. Code all labor, materials, and drive time to that job just like any other project.

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Utah bookkeeping firm for contractors, trades, and small businesses. We provide bookkeeping, construction job costing, payroll, and QuickBooks support. Locally owned in American Fork, serving Provo to Salt Lake City and the entire Wasatch Front.

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