If you’re a contractor in Carlsbad, Oceanside, Vista, or anywhere in San Diego County, job costing is everything.
It tells you:
- Which jobs are profitable
- Which crews are efficient
- Where material costs are creeping up
- Whether you actually made money
But here’s the hard truth:
Job costing completely falls apart when your books are messy.
As a business accountant and bookkeeper working with contractors throughout North County San Diego, we see this all the time.
Let’s break down why it happens — and how to fix it.
1. Job Costs Don’t Match the Bank
Many contractors rely on QuickBooks job costing, but:
- Bank accounts aren’t reconciled
- Credit cards are months behind
- Transactions are duplicated
- Deposits are posted twice
If your bank doesn’t reconcile, your job costs aren’t real.
We often see:
- Revenue double-counted
- Material costs uncategorized
- Subcontractors lumped into “Expenses” instead of job-specific COGS
When your books are wrong, your job profitability report is fiction.
2. Materials and Subs Aren’t Assigned to Jobs
Job costing only works when:
- Every material purchase is tied to a job
- Every subcontractor invoice is coded correctly
- Labor is tracked accurately
With messy bookkeeping:
- Home Depot runs go to “Supplies”
- Subcontractors get coded to “Professional Fees”
- Payroll isn’t allocated by project
Now your $250,000 remodel shows a 40% profit — but in reality you barely broke even.
That’s dangerous.
3. Change Orders Never Get Captured Correctly
In construction, change orders are constant.
But when bookkeeping is behind:
- Additional revenue doesn’t get tied to the correct job
- Extra materials get expensed incorrectly
- No one updates job budgets
The result?
You think the job went over budget — when it was actually profitable.
Or worse…
You think it was profitable — and it wasn’t.
4. Payroll Isn’t Allocated Properly
For many San Diego contractors, labor is the biggest cost.
If:
- Payroll isn’t split by job
- Owner draws are mixed with payroll
- Workers’ comp and payroll taxes aren’t allocated
Then your labor burden is wrong.
And if your labor burden is wrong, your bids will be wrong.
That’s how contractors slowly bleed profit year after year.
5. You Can’t Trust Your Gross Profit %
One of the first things we look at when cleaning up contractor books in Carlsbad is gross profit by job.
If:
- COGS is incomplete
- Revenue is duplicated
- Accounts aren’t reconciled
Then gross margin reports become meaningless.
We’ve seen contractors who thought they were at 35% gross margin — but after cleanup they were closer to 18%.
That difference determines:
- Hiring decisions
- Equipment purchases
- Expansion plans
- Tax planning strategy
Why This Is a Huge Risk for Contractors
Messy books don’t just hurt job costing.
They create:
- Incorrect tax filings
- Overpaid or underpaid sales tax
- Cash flow surprises
- Poor bidding decisions
- Stress
And in California — especially with FTB and IRS scrutiny — bad books create audit risk.
How to Fix Job Costing for Contractors
Here’s the right way to rebuild:
Step 1: Reconcile Everything
- Bank accounts
- Credit cards
- Loan accounts
No exceptions.
Step 2: Clean Up the Chart of Accounts
Separate:
- Materials (COGS)
- Subcontractors (COGS)
- Labor burden
- Equipment rental
- Overhead
Step 3: Use Proper Job Tracking in QuickBooks
- Every transaction assigned to a customer/job
- Payroll allocated by project
- Deposits recorded correctly (no duplicates)
Step 4: Monthly Close Process
Professional contractors don’t wait until tax season.
They close monthly.
At Accounting Fresh, our structured close process ensures:
- Accounts are reconciled
- Job cost reports are reviewed
- Financial statements are accurate
- Gross margin is monitored
If You’re a Contractor in San Diego…
And:
- Your QuickBooks is behind
- Job profitability reports don’t make sense
- Your CPA only talks to you once a year
- You’re not sure if you’re actually making money
It’s time to upgrade your bookkeeper to a real business accountant.
We specialize in:
- Contractor bookkeeping
- Catch-up and messy books cleanup
- Job costing setup and review
- Tax-ready financials
- Strategic guidance for growing construction companies
Serving Carlsbad, Oceanside, Vista, Encinitas, San Marcos, and all of San Diego County.
Work With the Best Business Accountant & Bookkeeper for Contractors in San Diego
At Accounting Fresh, we don’t just categorize transactions.
We rebuild financial clarity.
We help contractors:
- Price jobs properly
- Protect profit margins
- Reduce tax risk
- Make confident decisions
If your job costing is falling apart because your books are messy, let’s fix it the right way.
Schedule a consultation today and get a clear plan forward.