Why Accounting for Contractors Works Differently
Accounting for contractors should make your finances easier to manage. Clear records of income, expenses, payroll, and customer deposits help you understand cash flow, prepare for tax time, and plan for slower months.
- Seasonal cash flow. Contractors often earn most of their revenue in a few months and need it to last through the slow ones.
- Customer deposits. Money collected before a job starts is not fully earned yet, so it should be tracked apart from finished work.
- Vehicles, tools, and equipment. Trucks, trailers, and equipment purchases affect both your books and your tax outlook, so they need careful records.
- Texas payroll for crews. Texas paychecks have no state income tax withholding, but employers generally still pay state unemployment tax through the Texas Workforce Commission.
How Each Service Supports Contractors and Home Service Businesses
Each service is set up around how a trades business bids, spends, and grows. You can start with one and add others as your business changes.
01
Your chart of accounts is tailored to your trade, with income and expenses organized into categories that make your financial reports easier to understand.
02
Crew pay runs on your schedule through self-service or full-service payroll, with clear payroll records connected to your books.
03
Your business and personal returns are prepared from books that already reflect your vehicles, equipment, income, and expenses.
04
We help you time equipment purchases and review your entity setup before the year closes.
05
Financial consulting.
Profitability analysis, budgeting, and forecasting help you understand overall business performance and plan for the slow season.
Why DFW Trades Owners Work With FTG Financial
You spend your days on job sites, not waiting on hold for an accountant. Contractors, painters, landscapers, and handymen are among the owners this firm was built to serve. You get straight answers from someone who understands how a job gets bid, built, and billed.
Joseph Timothy started the firm in 2024 to give small businesses big-company accounting experience at an affordable rate. He works with trades businesses anywhere in Dallas-Fort Worth by phone or video, so you can meet from the truck or the office.
- Founded in 2024
- Custom charts of accounts
- Books closed on time
Common Questions About Accounting for Contractors
How should I record customer deposits in my books?
A deposit is money collected for work you have not finished yet. On an accrual basis, it is generally recorded as a liability until the job is done, then moved into income. On a cash basis, it counts as income when the money comes in, so it helps to know which method your books use.
Can you run payroll for a seasonal crew in Texas?
Yes, payroll can be set up for a crew that grows in the busy season and shrinks in the slow one. You can choose self-service or full-service, and full-service includes required payroll filings and year-end W-2s. Texas has no state income tax withholding, though employers generally still pay state unemployment tax through the Texas Workforce Commission.
Should my contracting LLC elect S corporation status?
It depends on your profit, how you pay yourself, and your plans, so there is no single right answer. A single-member LLC generally reports business income on Form 1040 (Schedule C), while an LLC that elects S corporation status files Form 1120-S. Tax planning reviews your numbers so you can weigh the trade-offs before making a change.
Do contractors need different bookkeeping than other businesses?
The basics are the same, but contractors may see sharper swings between busy and slow months. Clear records of income, payroll, customer deposits, and equipment expenses help you understand cash flow. Planning for slower months matters because truck and equipment payments continue year-round.
Get Books That Keep Up With Your Busy Season
Tell us about your trade, your crew, and how your books are kept today. We will explain how organized bookkeeping, payroll, and tax support could fit your business.