Question 1

What is job costing and why is it important for contractors?

Accepted Answer

Job costing tracks income and expenses by individual project, allowing you to see exactly which jobs are profitable and which are losing money. Without job costing, contractors often find they're busy but not profitable. We set up job costing in QuickBooks or Xero so you always know where you stand on every project.

Question 2

How do holdbacks work in construction bookkeeping?

Accepted Answer

In Ontario, the Construction Act requires a 10% holdback on each progress payment. This holdback isn't released until the project is substantially complete and the lien period has expired. We track holdback receivables and payables separately, ensuring your financial statements accurately reflect your cash position.

Question 3

How do you handle subcontractor payments and T4A slips?

Accepted Answer

Subcontractor payments must be tracked and reported on T4A slips for CRA each year if the total paid exceeds $500. We track all subcontractor payments throughout the year and prepare T4A slips at year-end — eliminating a major compliance headache.

Question 4

Do construction companies need to charge HST on their invoices?

Accepted Answer

Yes, most construction work in Canada is subject to HST. However, some types of new residential construction may qualify for HST rebates. We ensure you're charging HST correctly on all invoices and claiming your ITCs on materials and subcontractors.

Bookkeeping that
understands job sites.

Know which jobs
make you money.

From GC to specialty trade.

Construction bookkeeping
questions answered.

Focus on the build.
We'll handle the books.

Bookkeeping thatunderstands job sites.

Know which jobsmake you money.

From GC to specialty trade.

Construction bookkeepingquestions answered.

Focus on the build.We'll handle the books.

Bookkeeping that
understands job sites.

Know which jobs
make you money.

Construction bookkeeping
questions answered.

Focus on the build.
We'll handle the books.