Construction Company Setup

• Business structure decision framework (LLC vs. sole prop vs. S-Corp — non-legal framing)
• State formation coordination checklist with step-by-step filing guidance
• EIN acquisition walkthrough and documentation
• Business banking setup checklist — account types, separation requirements, initial funding
• Payment acceptance setup — credit cards, ACH, checks — selection and activation guidance

• Accounting software selection and initial configuration (QuickBooks Online or equivalent)
• Construction-specific chart of accounts — installed and configured (not the default template)
• Job costing enabled — Projects configured, cost codes set up
• Expense categorization rules documented (materials, labor, subs, overhead)
• Invoicing structure: standard terms, deposit requirements, progress billing setup
• AR aging tracker and weekly cash review habit installed

• Weekly owner meeting agenda template (15–30 min, field + office review)
• Simple KPI scoreboard (Revenue / Job Margin / Cash) — configured for your first 90 days
• Role clarity one-pager for each active role
• One SOP template per critical process identified during engagement
• 90-day maintenance guide — what to review weekly and monthly
• Handoff package: complete documentation, all credentials organized

What business structure is best for a construction company?

Most new construction companies start as a single-member LLC or multi-member LLC. An LLC provides personal liability protection — critical when you're working on job sites, dealing with subcontractors, and carrying significant equipment. S-Corp election can offer tax advantages once revenue grows, but that decision belongs with a licensed CPA or attorney. We help you understand the tradeoffs and navigate the formation process; the final legal and tax decisions should be confirmed by your advisors.

How do I set up a business bank account for a construction company?

To open a business bank account, you'll need: your state-issued LLC registration documents, your EIN letter from the IRS, and a form of ID. Most banks also require an initial deposit. Choose a bank with strong business banking features — mobile deposit, high deposit limits, integration with accounting software, and ideally construction or contractor-specific features. Do this before you take your first job payment.

What should a construction company chart of accounts include?

A contractor-specific chart of accounts includes standard income and expense categories plus construction-specific accounts: Materials (by job or trade), Labor (direct and labor burden), Subcontractors, Equipment Costs, Job Costs vs. Overhead, AR and AP Retention, and Work in Progress (WIP). The default QuickBooks chart of accounts doesn't include these — it must be configured for construction from the start.

Do I need a separate bank account for each construction project?

Not required, but some contractors use sub-accounts or multiple accounts for large jobs. What's required is that all project income and expenses run through your business account (not personal), and that your bookkeeping tracks costs by job — that's job costing, not account separation. QuickBooks Projects feature handles this at the software level without needing separate bank accounts.

What accounting software do construction companies use?

QuickBooks Online is the most common for small to mid-size construction companies — it supports job costing, progress billing, subcontractor management, and integrates with tools like Buildertrend, Jobber, and Procore. For larger operations, Sage 300 Construction or Foundation Software are used. For very early-stage, Wave is free and functional. The platform matters less than correct setup — job costing enabled, contractor chart of accounts configured, and categories right from day one.

How do I set up job costing in QuickBooks for a construction company?

In QuickBooks Online, enable Projects under Settings → Account and Settings → Advanced → Projects. Once enabled, create a Project for each job and assign income and expenses to it. For accurate job costing, you need your chart of accounts to include job-level cost categories (materials, labor, subs) and you need to code every expense to the correct job from day one. This is part of the bookkeeping setup we handle in Phase 2 of the Foundation Install.

How long does it take to set up a construction company properly?

DIY, expect 6–10 weeks: state filing takes 1–4 weeks, bank account setup takes a few days, QuickBooks setup takes hours if you know what you're doing (and weeks if you're learning). Our Foundation Install compresses this to 21 days with correct setup across all five foundations — entity through operating cadence — delivered and documented.

What's the biggest mistake construction companies make when setting up?

Three mistakes we see in almost every engagement: (1) Mixing personal and business finances — fatal to your LLC's liability protection and makes bookkeeping useless. (2) Setting up QuickBooks with the default chart of accounts, which has no construction-specific categories and makes job costing impossible. (3) Starting with no invoicing process — they invoice whenever they remember and then wonder why cash flow is always a problem.

Do I need a general contractor license to form my construction company?

You can form your LLC before getting licensed, but you cannot legally take on jobs in most states without the required license. Requirements vary widely by state and trade — your state's contractor licensing board or Department of Consumer Affairs is the authoritative source. Licensing is outside our scope; we handle the business foundation. Check your state's requirements before taking your first paid job.

Can I set up my construction company in a different state than where I work?

You can form your LLC in any state (Delaware, Wyoming, and Nevada are popular for their business-friendly laws), but if you're doing business in a different state, you'll typically need to register as a foreign LLC in that state and may face additional tax obligations. For most small contractors who work primarily in one state, forming in your home state is simpler and cheaper. This is a question for a business attorney.