Construction Bookkeeping in Grand Rapids, MI

Catch-up is the most common reason a Grand Rapids contractor calls us, and it is a defined piece of work rather than an open-ended project. We start at the last month that actually reconciled, pull bank and card statements forward, recode transactions to the correct job and cost code, enter the subcontractor and supplier bills that never got logged, fix retainage that was recorded as ordinary receivable, and reconcile every account through to today. A contractor six to nine months behind is usually current within two to four weeks, and your CPA receives a file they can file from instead of one they have to rebuild.

Grand Rapids levies a local income tax under Michigan's City Income Tax Act, at 1.5 percent for residents and 0.75 percent for non-residents, and non-resident withholding is based on where the work was actually performed. That makes it a payroll-processing problem, not a year-end one. A crew that spends Monday and Tuesday on a Michigan Street job and the rest of the week in Byron Center has to be withheld accordingly. Grand Rapids is one of more than twenty Michigan cities with a local income tax, and several West Michigan neighbors are on the same list, so a crew can cross two taxing cities in a week. We record hours by job and job location so the withholding and the job-cost labor come from the same timesheet.

Michigan generally treats a contractor as the consumer of materials it affixes to real property, so the contractor pays the 6 percent sales tax at purchase and does not charge tax to the owner on the improvement itself. Where the supplier did not collect Michigan tax, typically an out-of-state or online purchase, the contractor owes 6 percent use tax instead, reported to the Michigan Department of Treasury on the Sales, Use and Withholding return. That is a coding decision made hundreds of times a month at the point the invoice is entered, not a year-end adjustment. We set up the item and vendor coding so taxed and untaxed purchases separate automatically and the use tax accrual is already there when the return is due.

Federally funded work in Grand Rapids, including projects carrying federal highway, transit, housing or infrastructure dollars, falls under the Davis-Bacon Act, which requires the applicable wage determination to be paid and a weekly certified payroll to be submitted, usually on US Department of Labor Form WH-347. Michigan also restored a prevailing wage requirement on state-financed construction in 2023, administered through the Department of Labor and Economic Opportunity, so confirm the position written into any state contract. From a bookkeeping standpoint the requirement is weekly, not monthly, and the filed payroll must agree to the labor sitting in your job cost. We produce both from one payroll run so they cannot disagree.

Yes, and most files we inherit in West Michigan were set up for a business that sells products rather than one that builds things. The usual symptoms are jobs entered as customers with no sub-jobs, no cost codes at all, materials and subcontractor costs pooled into one expense account, retainage buried inside accounts receivable, undeposited funds sitting for a year, and owner draws mixed with job costs. We rebuild the chart of accounts around job costing, create the item and cost code structure your trades actually use, move retainage to its own account, clear the reconciliation discrepancies, and then keep the file that way with a fixed monthly routine.

The exterior season in Grand Rapids realistically runs from spring thaw to freeze-up, so concrete, site work, roofing, paving and masonry crews earn most of the year's revenue in a compressed window while overhead runs twelve months. Bookkeeping cannot create cash, but current books are what make the winter survivable. We keep accounts receivable aged and chased while collections still matter, track retainage as its own receivable so you know what is sitting out there, keep payables scheduled against real bank balances, and get the close done fast enough that a January decision is based on December numbers rather than a guess.

The Michigan Construction Lien Act runs on documents your books have to produce. A Notice of Furnishing is generally due within 20 days of first furnishing labor or material, and a claim of lien must be recorded within 90 days of last furnishing. On residential work in particular, payment flows against a sworn statement listing every subcontractor and supplier with the contract amount, the amount already paid and the balance owing, and payment is made against lien waivers. All of that comes straight out of accounts payable by job. We keep the AP subledger accurate enough that a sworn statement is printed rather than reconstructed, and we hold the waiver file against each payment.

Yes, and we do it during the year rather than in January. We collect the W-9 before the first payment is released, code every subcontractor payment to the vendor and the job as it happens, and flag anyone crossing the current IRS reporting threshold for 1099-NEC filing. We also track certificate of insurance expiry dates against your vendor list, because an expired certificate on an open-shop West Michigan job is both an insurance exposure and a worker-classification exposure if the Unemployment Insurance Agency or your workers compensation auditor ever looks at who you treated as a subcontractor.

Bookkeeping is the daily and monthly work: coding every transaction to a job and cost code, entering AP and AR, reconciling bank and credit card accounts, processing payroll onto the right jobs, recording retainage, and closing the month. Accounting is the layer that sits on top: WIP schedules, percentage of completion revenue, over and underbilling analysis, statements a surety or a bank will lend against, and tax planning. Accurate accounting is impossible without accurate books. Many Grand Rapids contractors start here to get current, then add construction accounting in Grand Rapids as bonding and lender demands grow.

We work with contractors across Kent and Ottawa counties and the wider West Michigan region, including downtown Grand Rapids and the Michigan Street corridor, East Grand Rapids, Kentwood, Wyoming, Walker, Grandville, Byron Center, Caledonia, Cascade, Ada, Rockford, Hudsonville, Holland, Zeeland and Muskegon. Everything we do is remote, which means you get construction-specific bookkeeping without paying toward an office, and it also means the file is available to you and your CPA at the same time rather than living on one machine in a back room.