QuickBooks for Contractors: A Setup That Does Not Fall Apart

Updated 2026-10

Which QuickBooks

For most small contractors starting today, QuickBooks Online Plus or Advanced. Simple Start and Essentials lack Projects and class tracking, and without those there is no job costing worth the name. Plus adds both; Advanced adds more users, custom reporting and a few workflow tools that matter at a dozen staff and above.

QuickBooks Desktop Premier Contractor edition still runs in a great many offices and does job costing well. The catch: Intuit no longer sells new Desktop subscriptions to US customers apart from Enterprise, so a company on Desktop today is on a product with a finite future. That is not a reason to move this month, but it is a reason to plan the move rather than have it forced by a renewal notice.

The chart of accounts: shorter than you think

Resist the contractor template with two hundred accounts. A small contractor needs cost-of-sales accounts that mirror the cost codes (direct labour, materials, subcontractors, equipment, other direct), a short list of overhead accounts, and balance-sheet accounts for the construction-specific items: customer deposits, retainage receivable, retainage payable, costs in excess of billings, billings in excess of costs.

Everything job-specific lives in the job dimension, not in the account list. If you find yourself adding an account called "Materials, Smith residence", the structure is wrong.

Jobs: Projects, customers and sub-customers

In QuickBooks Online, each job is a Project under the customer. In Desktop, each job is a sub-customer. Either way, every transaction that belongs to a job gets the job on it: the bill, the time entry, the check, the invoice. A transaction without a job is overhead by definition, so a quick weekly check of "transactions with no project" catches what was missed.

Cost codes: items or classes

Two ways to carry cost codes. Products and services (items) can be set up as the cost codes and used on bills, time and invoices, which gives the cleanest estimate-versus-actual reporting. Classes can carry codes instead, or can carry a second dimension such as department or division. Most small contractors do best with items as cost codes and classes for the service-versus-construction split, if they have one.

Whichever you choose, the list should be your estimate lines, and it should be short enough that the crew lead codes time correctly without a lookup sheet.

What to connect, and what to be careful with

Bank feeds for every account, including loans and credit cards: non-negotiable. Payroll, whether QuickBooks Payroll or a provider, mapped so labour lands on jobs at the burdened rate. Field software (Buildertrend, Jobber, Housecall Pro, Procore, Knowify) connected for invoices and payments if the integration is reliable, and reconciled monthly either way.

The caution is duplicates. A bank feed plus an app that also pushes deposits, or an invoice received through an integration and keyed again by hand, produces doubled income or doubled expense that is tedious to unpick later. One source for each kind of transaction, and a monthly reconciliation that would catch a duplicate if one slipped through.

The five setup mistakes that become a cleanup

• Deposits posted as income on receipt, rather than to a customer deposit liability released as the job is earned
• Materials posted to an expense account with no job, so the job cost report shows labour only
• Owner draws and personal spending posted as expenses, understating profit and confusing the preparer
• Loan payments posted entirely to expense, so the loan balance never falls and interest is overstated
• Undeposited funds never cleared, so the bank will not reconcile and nobody knows which invoices are really paid

Each of these is a ten-minute fix at setup and a multi-hour fix per month of history later. If a file already has them, the cleanup page describes what fixing it involves.

The weekly routine that keeps it working

Code the bank feed, with jobs, at least weekly. Post time by job weekly from whatever the crew lead keeps. Enter sub and supplier bills when they arrive, with the job on them. Send progress invoices against the schedule of values on the dates the contract says. Reconcile every account at month-end and run the job cost report and the WIP schedule. None of it is hard; all of it is easy to postpone, and the postponement is what produces the shoebox.

Where to go next

• Job costing in QuickBooks Online, step by step
• Cleanup and catch-up, if the file is already a mess
• Construction bookkeeping services