Job costing for subcontractors working inside somebody else's building
New Rochelle rezoned its downtown around the train station and the towers arrived. For a contractor here that changed one thing above all: your customer is no longer an owner you can call. It is a construction manager working for a developer, and the money now moves on their schedule of values, through their portal, behind a pay-when-paid clause, with lien waivers attached to every requisition and retainage held until the building is finished. The work may be the same work you have always done. The cash cycle is not, and books built for owner-direct jobs will not survive a twenty-four month subcontract.
On the ground
Downtown New Rochelle, New York
Moving from owner-direct work to development subcontracts is a promotion in revenue and a demotion in control. Everything about how you get paid is now written by somebody else, and your books have to be able to read it.
They didn’t just record transactions and call it a day. They built a custom chart of accounts around how a remodeling company actually runs, did a full catch-up on years of bookkeeping inside QuickBooks Online, and now stay on top of my monthly bookkeeping and payroll. Every step, they broke it down in simple terms instead of burying me in accountant talk.
FinTruction rebuilt the whole thing from the ground up, with real job costing, work in progress, and retainage. They didn’t just hand me reports and disappear; they walked me through my numbers until I understood them.
Sahil and his team handle the bookkeeping and job costing for my painting business. They cleaned up my books and set up integrations that give me accurate, timely job costing with solid weekly data. Reliable, detailed, and genuinely invested in getting the numbers right.
FinTruction is the only bookkeeping team we’ve found that truly understands construction accounting and WIP reporting. They aligned our income and costs across 21 jobs and gave us full, monthly transparency. Fast, accurate, and an indispensable partner.
When I came to FinTruction I had no financial structure. No job costing, no WIP tracking, books behind. They did a full cleanup and rebuilt job costing and WIP tracking in QuickBooks. Now I know what’s billed, what’s owed, and where every job stands.
A couple of minutes from a contractor we support, sharing what working with FinTruction has been like and what changed once their numbers finally made sense.
New Rochelle made a decision that most small cities never make. Rather than approving buildings one at a time, it created a Downtown Overlay Zone with a generic environmental impact statement completed in 2015, amended it again in 2021 with a supplemental review, and wrote the plan explicitly around the connection between waterfront development and transit-oriented sites near the station. The stated aim was a healthier downtown economy and stronger social connectivity. The visible result is a skyline. A Long Island Sound city with a Metro-North station about half an hour from Grand Central now has residential towers where surface parking used to be.
For contractors, the interesting change is not the height of the buildings. It is who is buying construction. Work at that scale is bought by developers and their construction managers, frequently companies headquartered somewhere else, using their own subcontract forms, their own billing calendar and their own payment software. A trade contractor who spent twenty years working directly for building owners and homeowners now signs a document written to protect somebody else, and the terms inside it decide the shape of your cash flow for the next two years.
Meanwhile the older market has not gone anywhere. New Rochelle has a long, irregular shoreline on Long Island Sound and neighborhoods of substantial single family housing behind it, plus two private colleges, schools, houses of worship and a large stock of mid-century apartment buildings that need work. So a great many local firms are running two businesses at once: an owner-direct business where they set the terms and get paid in weeks, and a subcontract business where they do not and they will not. Averaging those two together in one profit and loss statement produces a number that describes neither of them.
One honest note about the metro. New Rochelle sits in the New York City metropolitan area, city-based contractors bid here and local firms take work in the boroughs, so the two markets touch constantly. If a real share of your work is physically performed in the five boroughs, read our page on construction accounting in New York City, because the city tax and permitting position genuinely differs. But the problem this page is about is not a New York City problem. It is what happens to a Westchester trade contractor the first time a national developer becomes the customer.
On a development job, getting paid is a process with dates in it. A requisition goes in on a cut-off, waivers go with it, an approval either happens or does not, and a statutory clock runs from that approval. Most subcontractors we meet cannot tell us when their last requisition was approved, which means they have no idea whether anybody is late.
Every construction platform claims to have a "QuickBooks integration." Most break the moment your books need to be accurate. Sales tax mismaps, retainage disappears, change orders create duplicates, and job costing reports stop matching project reality. We fix the integration so your software, your books, and your job‑level numbers all tell the same story.
Also work with Foundation, Sage 100, Bill.com, ADP, Gusto, Ramp, and more. See all platforms we integrate →
Your cost codes were built around how you run work. The schedule of values was built around how the construction manager wants to see the building billed. If those two structures do not reconcile, every month you are guessing at percentage complete, and every guess quietly moves your earned revenue.
An enrolled job changes the arithmetic of your bid and the arithmetic of your year-end insurance audit at the same time. Contractors take their first wrap-up job, price it the way they price everything else, and then spend the following twelve months discovering what that cost them.
A two-year subcontract is long enough to be badly wrong for a long time before anyone notices. We prepare a monthly work in progress schedule comparing cost to date against the current estimate, calculate earned revenue on percentage of completion, and put over and underbilling in front of you while the next requisition can still fix it.
Growing into development work is a working capital problem disguised as a sales success. Our controller services and CFO services cover how much of this work you can carry at once, what happens to you if one developer pauses, and whether your balance sheet supports the bond the next job will require.
We support the trades that staff a downtown build-out as well as the firms still doing waterfront and Sound Shore residential work, because in this city a lot of companies are quietly running both.
Running a Construction Company in New Rochelle?
Get Your Free AuditA general bookkeeper can record transactions. Construction accounting is a different job.
| What you need | Generic local bookkeeper | FinTruction |
|---|---|---|
| Job-level costing | Lumps all jobs into one P&L | Cost codes and margin per project |
| WIP & revenue recognition | Cash-basis, no WIP schedule | Monthly WIP with over/underbilling |
| Retainage tracking | Buried in AR/AP, often missed | Tracked receivable & payable by contract |
| Bonding & lender packages | Not equipped to produce them | Bonding-ready statements and backlog |
| Construction software | QuickBooks set up like a retail shop | QuickBooks + integrations tuned for contractors |
New York's prompt payment rules for private construction apply where the aggregate cost of the construction project, including all labor, services, materials and equipment to be furnished, equals or exceeds one hundred fifty thousand dollars. The article excludes public work and several residential categories, including an individual one, two or three family residential dwelling, a residential tract development of one hundred or fewer one or two family dwellings, and residential projects of four thousand five hundred square feet or less. A downtown residential development is comfortably inside the article and a waterfront single family renovation may well be outside it, which means the same company can hold two contracts governed by completely different payment regimes.
The owner has twelve business days after receiving an approved invoice to approve or disapprove it, and must pay no later than thirty days after approval of the invoice. Downstream, a contractor is required to pay each of its subcontractors within seven days after receipt of good funds for each interim or final payment. Those dates are only useful to you if somebody wrote down when the requisition went in and when it was approved. In our experience that single missing data point is why most subcontractors never assert the rights they already have.
Within the scope of article 35-E, an owner may retain no more than five per centum of the contract sum as retainage, and retainage shall be released by the owner to the contractor no later than thirty days after the final approval of the work. Plenty of subcontractors here are still working to a ten percent assumption inherited from an older era of contracting. We are not attorneys and the contract chain on any given tower matters, so read your own subcontract with counsel. What we can guarantee is that you will know precisely how much is being held, by whom, and against what condition, which is the only footing from which that conversation ever goes well.
There is no statute that tells you how to account for an owner-controlled or contractor-controlled insurance program. There is a program manual, an enrollment form, a set of deducts and a year-end audit from your own carrier. The financial consequences are entirely yours: bid net of the coverage the program provides, keep enrolled payroll separated from the rest of your payroll all year, and get your carrier and broker to confirm in writing how enrolled payroll will be treated at audit. Every part of that is an accounting task, and none of it can be fixed in arrears.
Funds received on a New York construction contract are trust assets held for the beneficiaries of that improvement, and section 75 requires the trustee to keep books or records for each trust, including an allocation record where several trusts share one bank account. Failure to keep them is presumptive evidence that trust funds were applied outside the trust. When a large draw lands on one tower while three other jobs are behind on payables, the temptation is obvious and the rule exists precisely to catch it. We keep the trust record as a monthly close item.
Downtown development in New York frequently comes with some form of public participation, and New York can extend prevailing wage obligations to privately contracted construction where public funds make up a large enough share of project costs. Whether any particular project is covered depends on its funding stack rather than on what the site looks like, and the determination is not yours to make. Ask the question in writing before you price the work, because a wage schedule discovered after award is a margin event, not a paperwork event.
A reasonable question if you already have a CPA who files the return and a bookkeeper who keeps the bank reconciled. Here is the honest answer.
Contractors who were behind, off the bank, or heading into an audit. Same work, different trades.
$1M+ Rebuild
"FinTruction rebuilt the whole thing from the ground up, with real job costing, WIP, and retainage."
Built From Scratch
"FinTruction set the accounts up properly first, then cleaned up everything I never entered."
Most New Rochelle contractors do not need a new platform. They need the general contractor's system and their own accounting to stop describing the same job two different ways.
The files we inherit from growing subcontractors usually still reflect the owner-direct business they used to be. Jobs are customers, there is no retainage account, progress billing is a manual invoice someone types, and nothing anywhere records that a job is enrolled in a wrap-up program.
Is your QuickBooks file still set up for the company you used to be?
When the general contractor runs the job in a platform and you run the money in another, someone ends up retyping. We connect the two so budgets, commitments and change orders arrive in the accounting as data, and then we reconcile the two positions every month rather than assuming they agree.
One set of numbers that the field, the office and the general contractor all recognize.
Once the systems are connected, the month closes on decisions rather than on data entry. These are the reports New Rochelle subcontractors use to decide what to bid and what to walk away from:
See how we have done this for other contractors in our construction accounting case studies.
Almost certainly yes, and most subcontractors here have never read it. General Business Law article 35-E applies to a construction contract where the aggregate cost of the project, including all labor, services, materials and equipment to be furnished, equals or exceeds one hundred fifty thousand dollars. It excludes public work and a list of small residential situations, none of which describe a downtown residential tower. Under section 756-a the owner has twelve business days to approve or disapprove an invoice and must pay no later than thirty days after approval, and a contractor must pay its subcontractors within seven days after receipt of good funds. Those are dates you can hold someone to, but only if your requisition dates are recorded.
Look at the statute before you accept it. General Business Law section 756-c says an owner may retain no more than five per centum of the contract sum as retainage, and that retainage shall be released by the owner to the contractor no later than thirty days after the final approval of the work. That provision sits inside article 35-E, so it governs contracts within that article's scope, which a downtown New Rochelle development ordinarily is. We are not your attorney and the specific chain of contracts matters. What we will do is make sure you know exactly how much is being held, on which contracts, and against what release condition, so the conversation is about a number rather than a feeling.
On many large residential developments the owner or the construction manager buys one insurance program covering the enrolled trades on that site, commonly called an OCIP or a CCIP. If your job is enrolled, you are expected to bid net of the general liability and workers compensation you would normally carry for that work, and the difference is credited off your price. Contractors who bid their normal loaded rate and then get the wrap-up deduction applied afterwards have just given away several points of margin. This is a costing question before it is an insurance question, and it has to be answered while you are estimating, not when the deduct appears on the first requisition.
It can, and this is the single most common expensive surprise we see on subcontractors who have just taken their first enrolled job. Payroll performed on a wrap-up site is treated differently from your ordinary payroll, and if your books cannot separate the two, your carrier prices the whole year as though you carried the risk on everything. The fix is boring and it works: enrolled jobs are flagged in the payroll system from day one, hours are attributed by job rather than by week, and the audit package is assembled from job-level payroll data. Confirm the treatment with your carrier and broker in writing before the audit rather than arguing about it afterwards.
Because on a developer job the waiver is part of the payment mechanism, not a legal formality that happens somewhere else. A requisition typically goes up with a conditional waiver for the amount being requested and an unconditional waiver for the amount already received, and if the paperwork is wrong or missing the requisition does not get processed and your money slips a full cycle. That is a bookkeeping failure with a cash consequence. We keep the waiver status attached to the requisition record so you can see which draw is stuck and why, instead of finding out when the wire does not arrive.
No, and treating it as though it does is how subcontractors end up with two versions of the truth. The portal holds what the general contractor has approved. Your accounting has to hold what you have actually spent, what you have earned, what has been billed and what is still sitting unbilled, and those numbers are not the same thing. Where the two disagree, the disagreement is the useful information. We connect the systems so cost and commitment data flows through, and then we reconcile the portal position against your own books every month so the difference is a number you can explain to a lender or a surety.
It is good business and a real risk at the same time, and in a city where a handful of projects account for a large share of the work it is very easy to drift into. The problem is not the concentration itself, it is that most contractors cannot measure it. If you cannot say tonight what percentage of your backlog, your open receivables and your retainage balance sits with one customer, you cannot make a decision about it either. We report backlog and receivables by customer so the number is in front of you before a slowdown makes it urgent.
Yes, and arguably more than the general contractor does. On a twenty-four month building you can be well ahead of your billing for months at a time without noticing, which means you have spent real money on work you have not asked to be paid for. A monthly work in progress schedule compares cost to date against the current estimate, calculates earned revenue on percentage of completion, and shows over and underbilling by job while there is still time to correct the next requisition. It is also the document your surety and your bank will ask for the first time you want a larger bond or a bigger line.
It is, and it is worth handling deliberately rather than discovering at filing time. New York City imposes its own tax on unincorporated businesses carrying on business in the city, and city work brings permitting, insurance and wage rules that Westchester work does not. Our page on construction accounting in New York City covers that side. The practical requirement here is that every job is tagged with where the work is physically performed from the day it opens, because allocating a year of revenue by location after the fact is guesswork that you will be asked to defend.
Start with the free Audit. Send your current file, your most recent requisition on your largest job and your retainage schedule if you have one, and we will tell you what is wrong, what it is costing you, and how much of your money is currently being held by other people. No obligation. After that it is a flat monthly fee based on transaction volume, active jobs and reporting needs, so asking a question does not start a clock. Sahil Ahmad, CPA reviews the work.
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If the subcontract terms are already understood and what you actually need is someone keeping requisitions, retainage, payables and job costs current between now and the next draw, that is our construction bookkeeping service.
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