Bookkeeping, payroll, and accounting services for small businesses across Northwest Arkansas.

Call or Text: (479) 685-9673

How do I handle progress payments in my construction books?

Progress payments require a different approach than simple invoicing because the work happens over time and payment comes in stages. Getting this right means you’ll always know where each job stands financially.

Start by setting up each project as a separate job in your accounting system. In QuickBooks, this means creating a project or customer sub-job for each contract. Every invoice you send, every material purchase, every labor hour, and every subcontractor bill should be coded to that specific job. Without this separation, you have no way to know if a project is making or losing money until it’s too late.

When you submit a draw request or payment application, record it as an invoice to the customer for that specific job. If you’re billing $45,000 for completed foundation work, create an invoice for $45,000 coded to the foundation phase of that project. When the payment arrives, apply it against that invoice. This keeps your receivables accurate and shows what’s been billed versus what’s been collected.

Retainage needs its own tracking. Most commercial and larger residential jobs hold back 5 to 10 percent until final completion. When you invoice $45,000 but only receive $40,500 because of 10% retainage, you need to record that $4,500 somewhere. Create a retainage receivable account and track it by job. At project closeout when you receive the holdback, you’ll apply that payment and clear the retainage balance.

Match your costs to the same job and phase. If you’re invoicing for foundation work, your books should show the concrete, rebar, labor, and forming subcontractor costs against that same job. This is where most construction contractors struggle. The invoicing happens, but costs end up in generic expense accounts with no job assignment. You think you’re making money, but you can’t prove it.

Review your work in progress regularly. Compare what you’ve billed to what you’ve spent plus what’s committed. A job that looks profitable based on billings received might actually be underwater once you factor in the invoices sitting on your desk and the work remaining to complete the scope.

The goal is knowing your true position on each project at any moment. A bookkeeper near Gentry who understands construction can help you set up job costing correctly from the start. The structure matters as much as the data entry. Get it right and your books become a management tool, not just a tax compliance exercise.

Northwest Arkansas's Dedicated Bookkeeping Partner

The Next Step:
A Quick Conversation

Tell us about your business and where you need help. We'll listen, ask a few questions, and give you a clear plan and honest price.

More Questions

How do I set up QuickBooks Online for my small business?

Start by choosing the right plan and entering your business information. The key is configuring your chart of accounts to match how you actually operate, not using generic defaults that won't give you useful reports.

Read answer

What insurance costs can I deduct as a trucking company?

All insurance premiums you pay to protect your trucking business are deductible. This includes primary liability, cargo, physical damage, bobtail, workers' comp, and general liability coverage. The key is ensuring the insurance is for business purposes and keeping proper documentation.

Read answer

How do I set up payroll for my first employee?

Setting up payroll for your first employee requires an EIN, Arkansas state tax registration, unemployment insurance registration, and workers' comp coverage. Most small businesses use payroll software or outsource it entirely to avoid costly mistakes.

Read answer

How do I track deadhead miles for tax purposes?

Deadhead miles are fully deductible business miles. Track them daily using a mileage app or log, recording the date, route, purpose, and odometer readings separately from your loaded miles.

Read answer

What bookkeeping mistakes do new restaurant owners make?

New restaurant owners often mix personal and business funds, fail to track food costs properly, and struggle with cash handling and tip reporting. These mistakes compound quickly because restaurants generate so many daily transactions.

Read answer

How do I separate overhead costs from job costs?

Overhead costs are general business expenses like rent and insurance. Job costs can be traced directly to specific projects. Set up your chart of accounts to separate them and code every transaction consistently.

Read answer

Oliver Bookkeeping Solutions offers monthly bookkeeping, payroll, and accounting services to small businesses in Benton County and across Northwest Arkansas.

Client Reviews

5-Star Rated Firm

Social

  • QuickBooks Level 1 Certified badge
  • QuickBooks Level 2 Certified badge
  • QuickBooks Payroll Certified badge
  • Intuit Bookkeeping Certified badge

© 2026 Oliver Bookkeeping Solutions, LLC