Last updated: February 11, 2026
QuickBooks Online Projects gives you deeper job costing and customizable reports for tracking every dollar per job, while Xero Projects offers real-time profitability dashboards and unlimited users at every pricing tier. If you run a construction or contracting business in LA, the right project tracking setup can save you 5 to 10 hours a week and show you exactly which jobs are making money.
This post walks you through how each platform handles construction bookkeeping, what our setup and monthly services include, and which scenarios favor one system over the other.
What Our Construction Bookkeeping Services Include
We set up and maintain job-based accounting for contractors, subcontractors, and builders using both QuickBooks Online and Xero.
Here's what that looks like in practice.
Project setup: We create a project or job for each contract, estimate, or work order. This keeps all income, expenses, time, and materials tied to one place so you can see profit per job.
Job costing structure: We configure cost codes (labor, materials, subcontractors, equipment, permits) that match your bid structure. QBO lets you assign classes and customers together. Xero uses tracking categories and projects together.
Expense allocation: Every receipt, bill, and credit card charge gets assigned to the correct job and cost code. No guessing. This is the foundation of accurate construction bookkeeping services.
Time tracking integration: If you use QuickBooks Time, Homebase, or TSheets, we sync labor hours to the right job. Xero integrates with WorkflowMax and Tradify for time and job management.
Progress invoicing: We set up milestone billing or AIA-style invoicing so you can bill clients based on percent complete or approved progress.
WIP (work in progress) reports: These show you how much cost you've incurred versus how much you've billed. Critical for cash flow and knowing when to invoice.
Monthly close for contractors: We reconcile all accounts, review unbilled costs, flag over-budget jobs, and send you a profitability report by project. This is part of our monthly construction bookkeeping process.
CPA coordination: We prepare clean books and job cost reports so your CPA can handle income tax filings, depreciation, and entity planning. We do not provide income tax advice. Always confirm tax strategy with your CPA.
We're based in Los Angeles, certified in both QuickBooks Online and Xero, and we work with general contractors, electricians, plumbers, HVAC companies, and residential remodelers.
How Much Construction Bookkeeping Costs
Our construction bookkeeping pricing depends on transaction volume, number of active jobs, and whether you need cleanup first.
Monthly service: $400 to $900 per month for ongoing project accounting. This includes categorizing expenses, reconciling accounts, tracking job costs, running WIP reports, and coordinating with your CPA.
Cleanup before we start: If your books are behind or messy, cleanup typically runs $800 to $2,500 depending on how many months we're catching up and how many jobs need to be re-coded.
Project setup (one-time): $300 to $600 to configure job costing, cost codes, and project templates in QBO or Xero. This includes training you or your team on how to assign expenses to jobs.
Software cost (not included): QuickBooks Online Plus is $60/month (supports projects). Xero pricing starts at $42/month (Growing plan) and includes unlimited users.
Why Xero can cost less overall: If you have a field crew or multiple people who need access, Xero's unlimited user model can save you $20 to $50/month compared to QBO's per-user pricing.
Why QBO can be worth it: If you need advanced job costing reports, class tracking, and integration with QuickBooks Time for payroll, QBO Plus or Advanced is often the better long-term fit.
We'll walk you through both options during a free 20-minute call. Contact us here to talk through your setup.
How Long the Project Setup Takes
Most construction businesses are up and running with full job tracking in 2 to 3 weeks.
Week 1: Discovery and cleanup (if needed). We review your current chart of accounts, past jobs, and how you currently track costs. If your books are behind, we catch them up first.
Week 2: Build the structure. We create your cost codes, set up projects or jobs, configure invoice templates, and connect your bank feeds and credit cards. If you use a time-tracking app, we integrate it during this phase.
Week 3: Test and train. We run a test job through the system (from estimate to final invoice) and train you or your office manager on how to assign expenses, run reports, and track job profitability.
After that, we take over the monthly close and job cost reporting. You focus on bidding and building.
If you're switching from another bookkeeper or cleaning up years of backlog, add 1 to 2 weeks for historical project re-coding.
QBO vs Xero setup time: Both take about the same amount of time to configure. Xero's interface is a bit cleaner for first-time users. QBO has more report customization, but it takes longer to learn.
We handle the heavy lifting either way.
How Construction Bookkeeping Projects Track Your Profitability
This is where the magic happens. Once your jobs are set up correctly, you can see exactly which projects are making money and which ones are eating into your margin.
Job costing by category: Every expense gets tagged to a job and a cost code. You can see at a glance how much you've spent on labor, materials, subs, and permits per project.
Budget vs actual tracking: Both QBO and Xero let you set a budget per job (based on your estimate or contract amount). The system shows you how much you've spent versus how much you planned to spend.
Real-time dashboards: Xero Projects gives you a clean, real-time profitability view for each job. You see estimated hours, actual hours, costs, and invoiced amounts on one screen.
QBO Projects shows similar data, but you often need to create custom reports or use the Project Profitability report to get the full picture.
Work in progress (WIP) reports: This report shows unbilled costs and revenue. If you've spent $15,000 on a job but only invoiced $10,000, your WIP report flags it. This helps you bill on time and avoid cash crunches.
Alerts and thresholds: QBO can notify you when a job's cost ratio is off. For example, if labor costs hit 40% of the contract value but the job is only 25% complete, you get flagged.
Xero doesn't have built-in alerts, but we set up monthly profitability reviews to catch the same issues.
Why this matters: You can't fix what you can't see. Tracking job costs weekly (or at least monthly) lets you catch overruns early, adjust bids for future jobs, and know your true profit before the year ends.
We run these reports for you every month and flag anything that looks off. You get a simple PDF dashboard showing profit by job, overbudget alerts, and unbilled costs.
Frequently Asked Questions
Does QuickBooks or Xero handle job costing better?
QuickBooks Online offers more detailed job costing reports and lets you use classes and customers together for advanced tracking. Xero Projects is cleaner and easier to read, but has fewer customization options. If you need deep reporting and run 10+ active jobs, QBO is usually stronger. If you want simplicity and unlimited users, Xero wins.
Can I track labor hours by job in both systems?
Yes. QuickBooks integrates with QuickBooks Time (formerly TSheets) to track hours by employee and job. Xero integrates with WorkflowMax, Tradify, and other third-party apps. Both sync time to your job costs and can feed payroll. We help set up whichever integration fits your workflow.
How does progress invoicing work for construction projects?
Progress invoicing lets you bill based on milestones or percent complete instead of billing the full amount upfront. Both QBO and Xero support this. You create an estimate, then invoice a percentage (like 25% on contract signing, 50% at framing, 25% at completion). We configure templates that match AIA billing formats if your clients require it.
What is a WIP report and do I need one?
A WIP (work in progress) report shows costs you've incurred but haven't billed yet. It's critical for construction bookkeeping because it tells you when to invoice and helps forecast cash flow. Both QBO and Xero can generate WIP reports. We include this in your monthly close.
Can I assign payroll to specific jobs?
Yes, but it requires integration. QuickBooks Time tracks hours by job, then feeds those hours into QuickBooks Payroll so each paycheck is allocated to the correct project. Xero requires a third-party payroll app like Gusto or ADP that supports job costing. We help connect the right tools based on your setup.
How do I handle sales tax on construction projects?
Sales tax rules vary by project type and location. In California, labor is usually not taxable, but materials often are. Some jobs are exempt (like new construction), others aren't (like repairs). We track taxable vs non-taxable expenses per job and coordinate with your CPA to make sure you're filing correctly. We do not provide income tax advice, but we make sure your books are ready for tax time.
What are the biggest limitations of QBO and Xero for contractors?
QBO Projects doesn't let you track profitability across multiple entities or consolidate job costs if you run more than one company file. Xero Projects can feel too simple if you need complex cost allocation or detailed variance reporting. Both systems struggle with retainage tracking unless you use a third-party app. We work around these limits with custom reports and integrations.
Do I need a CPA if I use your construction bookkeeping services?
Yes. We handle your books, categorize transactions, track job costs, and prepare financial reports. Your CPA handles income tax filings, depreciation schedules, entity structure, and tax planning. We work directly with your CPA to make sure everything is clean and ready for year-end. Always confirm tax and entity decisions with your CPA.
Disclaimer: We provide bookkeeping and project accounting services. We do not offer income tax advice, tax preparation, or CPA services. All tax-related decisions should be confirmed with your CPA or tax advisor. We coordinate with your CPA to ensure your books are accurate and ready for filing.
