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Bookkeeping for Remodelers
A kitchen or whole-house remodel is a six-month project with a dozen decisions made after the contract is signed. Allowances get exceeded, selections change, the wall comes down and there is a surprise behind it. The books have to follow all of that, or the job closes and nobody can say what it made.
Allowances and selections
A contract with a $6,000 tile allowance and a client who chooses $9,000 of tile has a $3,000 billable difference that is easy to lose. Your bookkeeper tracks allowances by job against actual selection costs, so overages are billed as they happen rather than discovered, awkwardly, at the final invoice.
Change orders
Remodeling produces more change orders than any other kind of work and bills fewer of them. Agreed in the kitchen, done on Thursday, never written up. The firm keeps approved change orders against the job so the contract value is current, and lists work done without a signed change order so it is billed or consciously absorbed. On most remodeling companies this is the largest leak in the business.
Draws and the payment schedule
Deposit, draws at milestones, balance at completion. Each draw is a billing against the job, compared monthly with the revenue actually earned, so a job that has collected sixty percent and completed forty shows as over-billed before the cash runs out at the end.
Jobs that cross a year-end
A remodel that starts in October and finishes in March straddles two tax years, and how its revenue and costs fall between them depends on the contract accounting method your tax preparer applies. Your bookkeeper keeps the books so any method can be applied and produces the WIP schedule the preparer needs.
Send how many jobs are open and how far behind the change-order paperwork is. Your bookkeeper replies within a business day with what it would take to catch up and keep up.
Remodelers: common questions
Can the books track allowances?
Yes, by job, against the actual cost of the selections made, so overages are billed as they occur.
Design-build with a design fee?
The design phase is its own job or phase, so design profitability is visible separately from construction.
What about subs on a remodel?
Committed when the sub is engaged, drawn down by invoice, with W-9s and 1099-NECs handled.
What your bookkeeper handles
- Construction Bookkeeping Services
- Contractor Bookkeeping for Trades and Service Companies
- Construction Payroll Services
- Job Costing and WIP Reports for Contractors
- Construction Bookkeeping Cleanup and Catch-Up
Also written for General Contractors, Plumbers, HVAC Companies, Electrical Contractors, Landscapers, Roofers, Painters, Pool Builders, Handyman Businesses and Concrete & Excavation.
Request a quote for your remodeling company
Tell us about the company and the state of the books. Your bookkeeper replies within one business day with a plain answer: what it would take, and what it would cost. Requests answered within one business day · Calls Mon–Fri, 9am–5pm Eastern Or call (888) 720-4009 if you would rather talk it through first.