Bookkeeping for Construction and Builders: Job Costing, Progress Claims and Retention

Why Construction Bookkeeping Is Different

Building and construction businesses deal with a level of complexity that most small businesses don’t — progress payments, retention money, subcontractor invoices, variations, and materials that need to be tracked against specific jobs. Generic bookkeeping that just records income and expenses misses the detail builders actually need to run a profitable business.

Progress Claims and Retention Money

Progress payments need to be tracked against each job so you know what’s been claimed, what’s been paid, and what’s still outstanding. Retention money — the portion a client holds back until practical completion or the defects liability period ends — needs to be recorded separately so it doesn’t get lost in your general cash flow and forgotten about.

Job Costing: Know What Each Job Actually Makes

One of the biggest gaps we see in trade and construction businesses is not knowing which jobs are actually profitable. Materials, labour and subcontractor costs need to be allocated to the right job in Xero or MYOB, not just lumped into general expense categories. Without this, it’s easy to keep quoting the same way on jobs that are quietly losing money.

Subcontractor Payments and TPAR

If you pay subcontractors in the building and construction industry, you’re likely required to lodge a Taxable Payments Annual Report (TPAR) each year, reporting the payments you’ve made to them. Keeping subcontractor payment records organised throughout the year — rather than trying to reconstruct them at TPAR time — makes this a non-event instead of a scramble.

Cash Flow Timing

Construction cash flow is often lumpy — a big progress payment comes in, then nothing for weeks while materials and subbies still need paying. Good bookkeeping gives you visibility over this pattern so you can plan around it instead of being caught out.

How We Help

We set up job costing, track retention and progress claims properly, and keep subcontractor payment records organised throughout the year so your TPAR and BAS are straightforward when they’re due.

GoBookaroo provides bookkeeping and BAS preparation support. We are not a registered BAS Agent, Tax Agent or accountant unless stated otherwise, and we’re happy to work alongside your existing accountant or BAS Agent.

Book a free chat to get your construction business’s books properly organised.