Contractors often face the challenge of managing multiple projects, tracking job-specific expenses, sending accurate invoices, managing payroll for subcontractors, and staying on top of tax compliance. The best bookkeeping software for contractors should make it easy to handle these tasks while giving you clear insights into project profitability and cash flow.
Here’s a rundown of the best bookkeeping software for contractors, starting with FreshBooks.
1. FreshBooks
FreshBooks is a user-friendly accounting software that’s ideal for independent contractors and small construction businesses. It offers robust invoicing, expense tracking, and project management features that make it easier to keep track of job-specific finances.
Key Features:
- Invoicing: Create and send professional invoices for clients, including line items for labor and materials. Set up recurring invoices for long-term projects.
- Expense Tracking: Track expenses for each project, such as tools, materials, and subcontractor payments, to monitor costs.
- Time Tracking: Log billable hours for different projects and easily add them to client invoices.
- Project Management: Assign expenses, time, and invoices to specific projects, helping you track project profitability in real-time.
- Mobile App: Access your finances on the go, allowing you to invoice clients and track expenses while at the job site.
- Reporting: Generate financial reports such as profit and loss statements, cash flow summaries, and expense breakdowns to stay on top of your business’s financial health.
Why It Works:
FreshBooks is perfect for small contractors or independent tradespeople who need a simple, easy-to-use solution to manage invoicing, expenses, and project costs. Its focus on user-friendliness and mobility makes it a good fit for contractors who spend a lot of time in the field.
2. QuickBooks Online (QuickBooks for Contractors)
QuickBooks Online is one of the most popular accounting solutions, and its contractor-specific version is tailored to meet the needs of contractors. It’s ideal for small to large construction businesses and independent contractors managing multiple projects and subcontractors.
Key Features:
- Job Costing: Track income and expenses for each project, giving you a clear view of how much you’re making (or spending) on each job.
- Invoicing & Estimates: Send professional invoices, estimates, and quotes to clients. Convert estimates into invoices as the job progresses.
- Expense Tracking: Automatically categorize expenses like materials, labor, and subcontractor fees to keep your books in order.
- Payroll Management: Handle payroll for employees and subcontractors, with automatic tax calculations and direct deposits.
- Bank Reconciliation: Link your bank accounts to reconcile transactions automatically and track income and expenses in real time.
- Customizable Reports: Generate reports such as job profitability, profit and loss, and tax summaries to help manage your finances.
Why It Works:
QuickBooks Online is ideal for contractors managing multiple projects and teams. Its job costing and payroll features make it perfect for contractors who need to keep track of labor and material costs and want detailed reports to monitor profitability. It’s also scalable, meaning it can grow with your business.
3. Xero
Xero is a cloud-based accounting software that’s known for its flexibility and integration options, making it an excellent choice for contractors who need a customizable solution to manage projects, track expenses, and send invoices.
Key Features:
- Job Costing: Track expenses and revenue for individual projects, helping you monitor job profitability.
- Invoicing & Payment Processing: Create customized invoices and accept payments online, helping you get paid faster.
- Expense Tracking: Categorize expenses by project and automatically track subcontractor payments.
- Bank Reconciliation: Link your business bank account to Xero for automatic transaction imports and reconciliation.
- Integration with Construction Tools: Xero integrates with popular construction project management tools like WorkflowMax and Tradify.
- Multi-Currency Support: For contractors working internationally, Xero offers multi-currency accounting and invoicing.
Why It Works:
Xero is a great solution for contractors looking for a flexible, scalable accounting tool that integrates with project management software. It’s especially useful if you need to manage multiple projects or work with international clients and contractors.
4. Sage 100 Contractor
Sage 100 Contractor is an advanced accounting solution built specifically for the construction industry. It offers detailed project management and financial tracking tools, making it ideal for mid-sized to large contractors who need advanced job costing and project management features.
Key Features:
- Job Costing & Estimating: Track all costs associated with a project, including materials, labor, and overhead, to ensure profitability.
- Payroll: Manage payroll for employees and subcontractors, with automated tax filings and compliance.
- Project Management: Track project timelines, budgets, and progress, helping ensure that projects stay on track financially and operationally.
- Document Management: Store important project-related documents such as contracts, permits, and compliance records.
- Reporting: Generate custom reports to analyze cash flow, job profitability, and overall project performance.
- Compliance Tracking: Keep track of compliance requirements such as insurance, safety regulations, and legal standards.
Why It Works:
Sage 100 Contractor is perfect for mid-sized to larger contractors managing complex projects with multiple employees or subcontractors. Its ability to handle detailed job costing, payroll, and compliance tracking makes it a powerful tool for contractors who need more than just basic bookkeeping.
5. Buildertrend
Buildertrend is an all-in-one construction management software that integrates project management with accounting features. It’s a great fit for contractors who want to streamline their project workflows while keeping track of job costs and financials.
Key Features:
- Invoicing & Payment Processing: Create invoices for milestones, time and materials, or project completions, and accept online payments.
- Job Costing: Track costs associated with each job, including labor, materials, and subcontractor fees, to monitor profitability.
- Project Management: Schedule jobs, manage timelines, and collaborate with your team and subcontractors.
- Budget Management: Keep track of project budgets in real time to ensure that projects stay on track financially.
- Subcontractor Management: Manage subcontractor contracts, payments, and communications directly within the software.
- Custom Reports: Generate reports on project performance, profitability, and expenses.
Why It Works:
Buildertrend is ideal for contractors managing multiple projects and teams who need both project management and accounting tools in one platform. It’s particularly useful for larger contractors who want to keep everything from project timelines to invoicing under one roof.
6. Jobber
Jobber is a service management software tailored for small to medium-sized contractors. It’s great for contractors who need to manage client relationships, send invoices, and keep track of project costs in a simple and organized way.
Key Features:
- Client Management: Keep track of client information, project history, and communication in one place.
- Invoicing & Payments: Send invoices, accept payments online, and track outstanding balances.
- Scheduling & Dispatching: Schedule jobs, assign them to team members, and manage project timelines.
- Expense Tracking: Track project expenses like materials, labor, and subcontractor payments.
- Time Tracking: Track billable hours for yourself or your crew and automatically add them to invoices.
- Reporting: Generate reports on project expenses, client payments, and overall business performance.
Why It Works:
Jobber is a great option for small contractors who need a straightforward system to manage clients, invoices, and project expenses. Its user-friendly interface and focus on client management make it ideal for tradespeople who want to keep things simple but organized.
7. Wave Accounting
Wave is a free accounting software that offers essential bookkeeping tools for contractors, making it perfect for those just starting out or working on a tight budget. Wave provides invoicing, expense tracking, and basic reporting without the need for a subscription.
Key Features:
- Invoicing: Create and send professional invoices for free, and accept payments via credit card or bank transfer.
- Expense Tracking: Track expenses for materials, subcontractor payments, and other project costs.
- Online Payments: Accept online payments from clients via credit card or ACH, with transaction fees applied only when payments are processed.
- Basic Reporting: Generate financial reports such as profit and loss statements, cash flow summaries, and tax reports.
- Mobile App: Access your finances on the go, including invoicing and expense tracking.
Why It Works:
Wave is a great choice for small contractors or freelancers looking for a cost-effective solution to manage their bookkeeping. It covers all the essentials without requiring a monthly fee, making it ideal for contractors who want to keep overhead costs low.
What to Consider When Choosing Bookkeeping Software for Contractors
1. Job Costing
Job costing is essential for contractors to track income and expenses on a per-project basis. Look for software that allows you to monitor labor, material, and overhead costs to ensure profitability for each job.
2. Invoicing & Estimates
Contractors often need to send estimates and quotes to clients, which later convert into invoices. Your software should allow you to create estimates, send invoices, and accept payments easily.
3. Expense Tracking
Being able to track project-related expenses is key to staying on budget. Look for software that allows you to categorize and track materials, labor, and subcontractor costs.
4. Payroll
If you have employees or subcontractors, consider software that includes payroll management, ensuring that taxes and deductions are handled automatically.
5. Integration with Construction Tools
If you use project management or scheduling tools, look for accounting software that integrates with these platforms to streamline your workflow and reduce manual data entry.
Comparison Table for Quick Review
| Software | Best For | Key Features | Price Range |
|---|---|---|---|
| FreshBooks | Small contractors, freelancers | Invoicing, expense tracking, time tracking, mobile access | Starts at $15/month |
| QuickBooks Online | Small to large contractors | Job costing, invoicing, payroll, expense tracking | $30+/month |
| Xero | Growing contractors | Job costing, invoicing, multi-currency, construction tool integration | $13+/month |
| Sage 100 Contractor | Mid-sized to large contractors | Job costing, payroll, project management, compliance tracking | Custom pricing |
| Buildertrend | Contractors managing multiple projects | Invoicing, project management, subcontractor management | Starts at $99/month |
| Jobber | Small to medium contractors | Invoicing, client management, scheduling, expense tracking | Starts at $29/month |
| Wave | Small businesses, freelancers | Free invoicing, expense tracking, online payments | Free |
My Top Recommendation
For small contractors or freelancers, FreshBooks is a great choice due to its ease of use, affordability, and ability to manage invoicing, expenses, and project costs in a simple interface. For contractors managing larger teams or more complex projects, QuickBooks Online or Sage 100 Contractor offer more advanced features such as job costing, payroll, and detailed reporting.
For those looking for a free option, Wave provides essential bookkeeping tools for contractors without any upfront costs, making it ideal for those on a tight budget.
Ultimately, the best choice depends on the size and complexity of your business, so take advantage of free trials to find the software that best suits your contracting needs!