How we think about construction and trades
Construction books work when each job is treated as its own small business. A builder might have three houses in Auguston at different stages, and an excavator might run a barn pad on Sumas Prairie and a subdivision lot in the same week. The bank balance says nothing about which is making money, so we code every cost to a job as it arrives. Progress draws, holdbacks and subcontractor payments each get their own place on the balance sheet until they settle.
What makes the books different
- Job costing for the work the Valley offers. Residential builds in growing areas such as Auguston and east Abbotsford sit beside agricultural work: barns, drainage, footings and site preparation on working farms. Each job is costed separately, so a farm contract and a house never share one margin.
- Holdbacks tracked by contract. Under the BC Builders Lien Act, the person primarily liable on a contract or subcontract keeps a holdback of 10% of the greater of the value of work and material provided and the payments made. Where a certificate of completion is issued, the holdback period ends 55 days after it is issued. We keep holdbacks payable and receivable in separate accounts and list each one with its expected release date.
- T5018 totals kept all year. If more than 50% of your business income comes from construction and you paid a Canadian-resident subcontractor more than $500 in the year, not counting GST, a T5018 return applies. It is due six months after the end of the reporting period you choose, calendar year or fiscal year, and the slips do not have to be given to subcontractors. We keep each sub's running total current.
- Equipment, aggregates and wet months. Excavation and gravel work is equipment-heavy, so each machine's loan or lease has its own account and interest posts apart from principal. Fill and aggregate bought for a job are costed to that job. Site work slows in the Fraser Valley's wet winters, and the books show that dip early enough to plan for it.
What a monthly close looks like for you
By the 10th of each month, every bank, card and equipment-loan account is reconciled for the month before. Supplier bills and subcontractor invoices are coded to jobs, progress billings are matched to the draws received, and holdbacks move to their own accounts. You receive a profit and loss, a balance sheet, a job report showing cost to date against the estimate on each open job, and a holdback schedule.
Anything out of place, such as a fuel charge with no job, comes back as a short question in the same note. Because winter and summer differ so much, we compare each month with the same month last year.
Tools we commonly use for construction and trades clients
QuickBooks Online or Xero as the ledger, with project tracking turned on so costs land on a job when they are entered. Dext to capture supplier bills and receipts from the truck. Plooto to pay subcontractors and suppliers once you approve them. Wagepoint for crew payroll. If you estimate or schedule in a construction management program, it stays your working tool, and we tie its job totals back to the ledger each month.
Partners we work with
Your CPA prepares the return and advises on structure. Construction and corporate lawyers come in when a lien, contract or dispute question arises. Lenders and equipment financiers want current statements before a new line or a new machine. At the end of the year, year-end preparation hands your accountant a job schedule, a holdback list and T5018 totals in one package.
A good fit if
- You build, excavate or run a trade in Abbotsford or nearby, with several jobs open at once
- You want to know what each job made before the next estimate goes out
- You pay subcontractors and want holdbacks and T5018 totals handled monthly, not found at year-end