Accounting & Tax
For Contractors in California

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Running a contracting business in California means juggling job sites, crews, materials, permits—and taxes. Whether you're a general contractor, architect, electrician, plumber, or remodeler, your financial systems need to be just as strong as your framing. At Steve CPA, we specialize in helping construction professionals streamline their accounting, stay compliant, and minimize tax burdens.

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Why Contractors Need Specialized Accounting

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Construction accounting isn’t like other industries. You deal with:

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• Project-based income

• Variable labor and material costs

• Progress billing

• Sales and use tax complexities

• Work-in-progress (WIP) reporting

• Percentage-of-completion revenue recognition

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Without proper systems, you risk underbilling, overpaying taxes, or losing track of profitability. We help you avoid those pitfalls with tailored solutions built for contractors.

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QuickBooks Setup & Job Costing That Works

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Job costing is the backbone of construction profitability. We’ll help you set up QuickBooks Online or Desktop to:

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✅ Track income and expenses by job
✅ Allocate labor, materials, and subcontractor costs accurately
✅ Create estimates and progress invoices
✅ Generate job profitability reports in real time​

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Sales & Use Tax in California: What Contractors Must Know

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California contractors face unique tax rules:

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• Materials vs. Fixtures: Materials you install may be taxable at purchase; fixtures may require sales tax collection at installation.

• Seller’s Permit: If you sell or lease tangible property (e.g., cabinetry, HVAC units), you may need to collect and remit sales tax.

• Contract Type Matters: Lump sum vs. time-and-materials contracts affect your tax obligations

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We help you navigate CDTFA regulations, structure contracts properly, and stay audit-ready.

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Work-in-Progress (WIP) Accounting

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WIP accounting tracks costs and revenue as work is performed—not just when a job is complete. This is critical for:

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• Accurate financial statements

• Cash flow forecasting

• Billing accuracy

• Project monitoring and risk management

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We prepare detailed WIP schedules that align with your project milestones and help you avoid overbilling or underbilling issues.

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Percentage-of-Completion Revenue Recognition

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For long-term projects, the IRS and GAAP require revenue to be recognized as work progresses. We use the cost-to-cost method to:

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• Calculate percent complete

• Recognize revenue and expenses monthly

• Adjust for change orders and scope shifts

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This method gives you a more accurate picture of profitability and helps you stay compliant with tax laws.

 

Additional Services for Contractors

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• Bookkeeping & Payroll: Clean books and compliant payroll for crews and subs

• Entity Structuring: Business structure review for tax efficiency​

• Cash Flow & Budgeting: Forecasting tools to keep your business solvent and scalable

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Let’s Build Your Financial Foundation

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Whether you're just starting out or scaling up, your accounting systems should support your growth—not slow you down. ​

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📞 Ready to get started?

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Contact Steven Mayorga, CPA today and let’s build a financial system that works as hard as you do.