Construction Company Bookkeeping for Frisco, McKinney, and North Dallas Contractors

The construction industry in the northern Dallas Metroplex is extraordinary. Frisco, McKinney, Prosper, Celina, and Allen are among the fastest-growing cities in the country. General contractors, specialty subcontractors, remodelers, and custom home builders in this area are working at a pace that leaves little time for anything but the work itself. The bookkeeping and financial management of a construction business, however, is one of the most complex in any industry.

Job Costing Is the Core of Construction Accounting

Standard bookkeeping tracks money in and money out. Construction accounting tracks money in and money out by job. Every project needs its own cost bucket: materials, labor, equipment, subcontractors, permits, and overhead allocation. Without job costing, you may know that your business made money overall, but you have no idea which projects were profitable and which ones drained your margin.

A construction company in Frisco that completes twelve projects in a year and does not track by job is essentially flying blind. When the owner bids next year's work, they have no data to inform their estimates. When one project runs over budget, they often do not realize it until the project is complete and the damage is done.

Retainage and Revenue Recognition

Most construction contracts include retainage, typically 5 to 10 percent of each draw that is withheld until project completion. On large projects, retainage balances can be substantial. Retainage held by general contractors from subcontractors, and retainage held by property owners from general contractors, needs to be tracked separately and recognized correctly for both financial reporting and tax purposes.

Managing Subcontractor Compliance

Construction companies often coordinate dozens of subcontractors across multiple projects simultaneously. Each subcontractor paid more than $600 in a calendar year requires a 1099-NEC. Each must have a W-9 on file. Workers' compensation insurance certificates need to be current for all on-site subs. Lien waiver documentation needs to be collected at each pay application. Keeping all of this organized is its own part-time job, and it is one we help construction companies across North Dallas manage.

Texas Sales Tax on Construction

The Texas sales tax rules for construction are layered. In Texas, contractors generally pay sales tax on materials they purchase and incorporated into real property. The treatment differs for new construction versus repair and maintenance work, and for residential versus commercial properties. Navigating these distinctions incorrectly can result in either overpaying taxes or being assessed additional taxes during a Comptroller audit.