Catch-up, coding and a close that actually lands every month
Most contractors who call us from Chattanooga are behind. Three months of bank feed sitting uncategorised, a QuickBooks file where every job was set up as a customer and nothing has a cost code, and a crew that spent Tuesday in Ringgold, Georgia and Thursday back in Hamilton County with the payroll never split between the two. Construction bookkeeping in Chattanooga carries a border problem on top of the usual one. We catch you up, recode the file to jobs and cost codes, get withholding and use tax landing in the right state, and close every month on a fixed date.
On the ground
The Tennessee River at downtown Chattanooga
If your bookkeeper left, or the file has not reconciled since spring, this is where we start. We work forward from the last month that genuinely ties to the bank, recode the backlog to real jobs and cost codes, and rebuild the file so a Chattanooga contractor can read job profitability without exporting anything to a spreadsheet.
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 →
Tennessee takes no withholding on wages, so the payroll burden here is everything else: workers' compensation class codes, unemployment insurance assignment, and the Georgia and Alabama withholding that starts the moment a crew works south or west of the line. We process payroll so the state travels with the hours.
A contractor in this market buys material in three tax jurisdictions and installs it in a fourth. Because Tennessee generally treats the contractor as the consumer of materials for a realty improvement, the tax decision happens at the supplier bill, which makes it a bookkeeping job rather than a tax-season one. We build the coding so the accrual falls out of the entry.
On plant and warehouse work a Chattanooga general contractor can carry dozens of sub-tier vendors at once, several of them licensed in a different state. Vendor setup is a control, not admin. We collect the paperwork before the first cheque goes out, which is also what supports the Tennessee business tax subcontractor deduction later.
Industrial and commercial owners in this market hold retention for long stretches, and retention nobody recorded is retention nobody chases. We enter every progress draw and AIA G702 and G703 pay application properly, post the retained amount to its own receivable, and finish the month with a reconciled statement package on a fixed date.
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.
Chattanooga is a three-state labor market pretending to be a mid-size metro. Downtown sits a short drive from the Georgia line, Alabama is not much further, and three interstates meet here, which is why the distribution and warehouse work exists in the first place. For a contractor that geography is normal until it reaches the office. One week of timesheets can carry a Hamilton County job, a Catoosa County job and a run out toward Bridgeport, and unless somebody recorded the state next to the hours, that week is unreconstructable three months later.
The automotive base makes it worse in a specific way. Work around the Volkswagen assembly plant and the supplier plants that feed it is often scheduled into shutdown windows, so a job that would take six weeks gets compressed into two with heavy overtime and a wave of rental equipment and expedited material. The revenue is good. The transaction volume in those two weeks is what buries a bookkeeper who was already a month behind, and the overtime premium usually ends up in one lump nobody has coded to a job.
Around that sit the other three markets: riverfront and downtown redevelopment, the hospitality and outdoor tourism work that follows it, and steady residential and remodeling demand out through Ooltewah, Hixson and East Brainerd. Each has a different billing rhythm. Industrial owners bill by draw with retention held long. Hospitality fit-outs move fast with change orders arriving mid-scope. Residential runs on deposits and allowances. One general bookkeeper trying to code all four the same way is why the file stops making sense.
The damage from falling behind is quiet. You cannot tell which job made money, so you keep bidding the same way. Use tax accrues on out-of-state material purchases and nobody records it. Retainage sits inside receivables and ages past its release date. Then your accountant will not file until the books are clean, and the cleanup costs more than the bookkeeping would have. We take the backlog off you and keep the records current afterwards, so the next close is a routine job rather than an event.
Chattanooga sits directly on the Georgia state line with Alabama a short run further west, so a local crew routinely bills work in two or three states inside one week. That single fact turns ordinary contractor bookkeeping into a jurisdiction problem: which state withholds on the wages, which state account the unemployment insurance belongs in, and which rate the material was actually taxed at before it landed on the job.
Multi-State Payroll Withholding: Tennessee levies no state income tax on wages, so a Tennessee-only contractor has no state withholding to run at all. Georgia and Alabama both do, administered by the Georgia Department of Revenue and the Alabama Department of Revenue, and both use their own employee withholding certificate rather than the federal Form W-4. Once a Chattanooga crew performs work across the line, those wages can become subject to nonresident withholding in the state where the work was done, subject to a limited day and income exemption in Georgia. That obligation is only manageable if the payroll records show the state alongside the hours, every day, which is a bookkeeping design decision and not a payroll-service default.
Unemployment Insurance State Assignment: State unemployment wages are reported to one state per employee, not split by jobsite, and the states apply a four-part localization test in order: where the service is localized, then the base of operations, then the place of direction and control, then the employee's residence. For most Chattanooga contractors the answer is the Tennessee Department of Labor and Workforce Development, even for employees who spend weeks on Georgia or Alabama jobs. Getting this wrong produces duplicate contributions to the Georgia Department of Labor or the Alabama Department of Labor and a refund claim that takes far longer to recover than it took to create.
Tennessee Sales and Use Tax on Contractor Materials: Tennessee generally treats a contractor as the consumer of the materials it furnishes and installs in an improvement to real property, so the tax attaches when the contractor buys the material rather than when the owner is invoiced. Tennessee's state rate is 7 percent with a local rate on top, and the combined rate in Hamilton County is higher than the combined rate in the Georgia and Alabama counties nearby. Material purchased across the line at a lower rate and installed in Tennessee generally leaves Tennessee use tax owed on the difference. That accrual is created at the point the supplier bill is entered, which is why we code purchases with the state of use.
Tennessee Business Tax and the Subcontractor Deduction: The Tennessee business tax is a gross receipts tax administered by the Tennessee Department of Revenue, and contractors fall into their own classification for it. Contractors can generally deduct amounts paid to subcontractors who hold a valid contractor or business license, but the deduction depends on having the subcontractor's license number on record and the payments identified as subcontract cost rather than absorbed into a general job expense account. That makes it a vendor setup control: capture the license number with the W-9 when the vendor is created, or spend a week reconstructing it later.
Contractor Licensing Across Three States: The Tennessee Board for Licensing Contractors requires a state license for construction work valued at 25,000 dollars or more including labor and materials, and it sets a monetary limit on each license tied to the contractor's financial statement, which means your books directly determine how large a job you are allowed to take. Cross into Georgia and the Georgia State Licensing Board for Residential and General Contractors applies; cross into Alabama and the Alabama Licensing Board for General Contractors does. Three licenses means three sets of renewal fees, bonds and insurance premiums, and those belong in overhead where they can be recovered in your burden rate rather than scattered across job costs.
Workers' Compensation, Class Codes and the Exemption Registry: Tennessee requires construction employers to carry workers' compensation coverage at a much lower employee count than other industries, and owners and officers in construction who want to be exempt have to appear on the state's construction services provider exemption registry. Premium is driven by payroll by class code, and the annual premium audit reconciles directly to your payroll records, so payroll that was never split by class code becomes an audit bill. Crews working Georgia and Alabama jobs also need the policy endorsed for those states, and that endorsement is priced off the same payroll data.
Certified Payroll on Federally Funded Work: Tennessee has no state prevailing wage requirement for general building construction, and the state prevailing wage law that remains in force applies to state highway work. Federal funding is what triggers the obligation. Davis-Bacon Act coverage requires payment of the applicable prevailing wage determination by trade and a certified payroll submission every week, typically on Form WH-347. This is a weekly bookkeeping task rather than an annual one, and the labor reported on the filing must equal the labor posted to job cost for the same week, because that is the first thing a compliance review compares.
A 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 |
We handle contractor bookkeeping across Hamilton and Bradley counties and over the line into North Georgia, from industrial crews working the automotive supplier base to remodelers and residential builders in Ooltewah and East Brainerd.
Behind on the Books in Chattanooga?
Get Your Free AuditA fair question if you already have a bookkeeper, a payroll service, or a cousin who does it on weekends. 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 Chattanooga contractors do not need another system. They need the QuickBooks file rebuilt for construction and connected to the field software the crews are already using, so the office stops retyping what the project managers have already entered.
Almost every file we inherit was configured for a business that sells products off a shelf. For a contractor that means jobs are customers, cost codes do not exist, retainage hides in receivables and material purchases carry no state of use, so the use tax accrual is invisible.
Not sure how far your QuickBooks file has drifted?
If your project managers are already entering commitments, change orders and daily logs somewhere, the office should not be typing them again into the accounting system. Double entry is where coding errors are born, and it is the main reason a month takes three weeks to close.
One set of numbers the field and the office both recognize.
Once the coding is right, the close stops being an argument. This is what arrives on the same date every month, formatted for construction and ready to hand to your CPA, your bank or your surety:
See what this has looked like for other contractors in our construction bookkeeping case studies.
Yes. Catch-up work is how most Chattanooga contractors start with us. We begin at the last month that actually reconciles, pull the bank and card feeds forward, recode transactions to the correct job and cost code, sort out the subcontractor and supplier payments that were posted to a generic expense account, and clear the undeposited funds and duplicate bills that build up when nobody is watching the file. Most contractors who are three to nine months behind are current inside two to four weeks, and your accountant gets a set of books that does not need rebuilding first.
Tennessee does not tax wages, so there is no Tennessee withholding to run. Georgia does, through the Georgia Department of Revenue, and Alabama does through the Alabama Department of Revenue. The moment a Chattanooga crew works a job in Catoosa or Walker County, those wages can fall under Georgia withholding, and Georgia applies only a limited exemption for nonresidents below a day and income threshold. The practical answer is that your timesheets have to record a state as well as a job, every day. We set payroll up so the state comes off the same timesheet entry that drives job cost, rather than being reconstructed at quarter end.
Often yes. Tennessee generally treats a contractor as the consumer of the materials it furnishes and installs in a realty improvement, so the tax attaches to the purchase rather than to the customer invoice. If you bought that material in Georgia or Alabama at a lower combined rate and installed it on a Hamilton County job, Tennessee use tax is owed on the difference. This is a bookkeeping decision made hundreds of times a month at the point the supplier bill is entered, not a year-end adjustment. We code purchases with the job and the state of use so the accrual is calculated rather than guessed.
One state per employee, not one state per jobsite. The state unemployment agencies use a four-part localization test applied in order: where the service is localized, then the base of operations, then the place of direction and control, then the employee residence. For a Chattanooga contractor whose crews rotate between Tennessee, Georgia and Alabama jobs, that usually lands the wages with the Tennessee Department of Labor and Workforce Development rather than the Georgia Department of Labor or the Alabama Department of Labor. Getting it wrong means paying the same wages into two state accounts and then trying to get one of them back.
Yes, and it is one of the most common things we inherit. When jobs are customers there are no cost codes, committed costs are invisible, retainage sits inside ordinary accounts receivable, and a job profitability report cannot be produced without exporting to a spreadsheet. We rebuild the chart of accounts for construction, restructure customers and jobs properly, create an item and cost code list that matches the work you actually take, move retainage into its own account, and re-reconcile the affected periods so the corrected file still ties to the bank.
The Tennessee business tax is a gross receipts tax administered by the Tennessee Department of Revenue, and contractors can generally deduct amounts paid to subcontractors who hold a valid contractor or business license. The catch is documentary: you need the subcontractor license number on file, and you need the payments identified as subcontract rather than buried in a general job cost account. That makes it a vendor setup control. We capture the license number alongside the W-9 and the certificate of insurance when the vendor is created, so the deduction is supportable when the return is prepared.
Only on federally funded work. Tennessee has no state prevailing wage requirement for general building construction, and the state prevailing wage law that remains applies to state highway work. Federal money changes that. Davis-Bacon Act coverage brings prevailing wage determinations by trade and a weekly certified payroll submission, typically on Form WH-347. The bookkeeping burden is weekly rather than annual, and the number that gets filed has to equal the labor sitting in job cost for the same week. We run both from the same payroll entry so they cannot disagree.
We record retainage the day the draw is entered, not when someone notices the money never arrived. Each progress billing posts the retained amount to a retainage receivable account tagged to the contract, with the release condition and expected date recorded against it. Retainage withheld from your own subcontractors goes to a matching retainage payable account. That gives you an aging you can chase and a balance sheet that shows what is genuinely collectible now versus what is held. Buried inside ordinary accounts receivable, retainage is money nobody is following up on.
Bookkeeping is the daily and monthly work: coding every transaction to a job and cost code, running accounts payable and receivable, processing payroll and getting the labor onto the right job, reconciling the bank and card accounts, and delivering a close on a fixed date. Accounting sits on top of that and needs it to be right first. WIP schedules, percentage of completion, over and under billing analysis, bonding capacity and franchise and excise tax planning all come from our construction accounting service in Chattanooga. Plenty of contractors start here and add that later.
We work with contractors across Hamilton and Bradley counties and the surrounding tri-state area, including Chattanooga, Red Bank, East Ridge, Soddy-Daisy, Signal Mountain, Hixson, Ooltewah, Collegedale and Cleveland, plus crews running jobs across the line in Catoosa and Walker counties in Georgia. Our work is fully remote. Start with the free Audit: send us your QuickBooks file and your last bank reconciliation and we will tell you how far behind you actually are and what it takes to fix. After that it is a flat monthly fee, so asking a question does not start a clock.
FinTruction handles construction bookkeeping across Tennessee. Pick your city for catch-up work, QuickBooks cleanup, job cost coding and a monthly close in your market, or start from the <a href="/construction-accounting-tennessee">Tennessee construction accounting</a> overview.
Bookkeeping keeps the coding, the reconciliations and the close on track. When you need WIP schedules, percentage of completion, bonding-ready statements and franchise and excise tax planning, that is the construction accounting service for Chattanooga.
Construction Accounting in Chattanooga
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Working across the state? Construction accounting in Tennessee
Send us your QuickBooks file and your last completed bank reconciliation. We will tell you which months do not tie, what is coded to the wrong job, whether your out-of-state payroll and use tax have been handled, and what it takes to bring it current. No charge and no obligation for the Audit.
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