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Accounting for trades and construction

You know what a job cost you when it’s over. The useful version is knowing while it’s still running.
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The problem

Job costing exists on paper or not at all

Materials go to one account, labour to another, and nothing ties back to the job. So you find out a job lost money after you’ve already bid three more like it.

Subcontractor reporting has its own rules

If construction is your main business activity and you pay subcontractors, you likely have a T5018 filing obligation. It’s separate from T4A, it has its own deadline, and it’s a common miss.

Holdbacks distort
everything

Revenue you’ve earned but can’t collect for months. It shows up in your profit and not in your bank account, which is exactly how a profitable contractor runs out of cash.

What I do

  • Job costing structure that ties labour, materials, and subcontractors back to the job
  • Materials classification, so cost of sales reflects what jobs actually consumed
  • T5018 subcontractor reporting, prepared and filed on time
  • Holdback tracking, separated from regular receivables
  • Progress billing and work in progress treatment
  • Cash flow forecasting built around your billing cycle and your CRA remittances
  • Corporate year-end, T2, and GST/HST

What's different

Anyone can produce a year-end for a contractor. The useful part is a gross margin number you can trust by job type, so you know whether your bidding is right before the season is over.

I’ll also say plainly what I don’t do. WSIB registration and reporting, Construction Act lien and holdback compliance, and your contract obligations stay with you and your lawyer. I’ll flag when something looks off, but that isn’t my file.

Questions

We're small. Four guys and a truck.
That’s fine, and honestly it’s when job costing pays off most, because one bad bid is a bigger share of your year.
Yes. I’d rather improve how they’re coding things than replace them.
You’ll get more out of it, but no. Some clients run on spreadsheets I maintain. Depends on your volume.
Usually when income exceeds what you’re taking out personally, or when liability makes it worth it on its own. Both worth a real conversation rather than a rule of thumb.

Mark Garcia, CPA · Kitchener-Waterloo, Ontario · Serving clients across Canada · CRA authorized representative