How it runs for construction companies and contractors
You approve and release every payment; we prepare, match and document.
What is accounts payable outsourcing?
Accounts payable outsourcing means a remote specialist runs the process from vendor invoice to approved payment run: capturing bills, coding them to the ledger, matching them to purchase orders and receipts, chasing approvals and preparing payments for release. The business keeps control of the bank account and the final release. The provider works in the company's own software.
What we handle for construction companies and contractors
- Three-way match of supplier invoices to purchase orders and delivery tickets
- Subcontractor draws released only with waivers and current insurance on file
- Retainage payable held per subcontract and released at closeout
- Payment runs scheduled around draw funding and supplier discount dates
- Joint-check requests and back charges tracked per vendor
The KPI that matters here
100% of subcontractor payments backed by a matching lien waiver and current certificate of insurance.
Construction compliance notes
Sales tax on materials
In most US states a contractor pays sales tax on materials at purchase and does not charge tax on the finished job. A few states, including Arizona and Washington, tax the contract itself, and many states have separate rules for repair work versus new construction. We set up tax codes per state and contract type and track exempt purchases with resale or project certificates on file.
Retainage
Retainage withheld by owners is recorded as retainage receivable, and retainage you withhold from subcontractors is recorded as retainage payable. Several states cap retainage on public work, commonly at 5%, and set release deadlines after completion. We track the release date per contract so closeout billing goes out on time.
Job costing and WIP
Bonding companies and lenders expect a work-in-progress schedule that ties to the general ledger, with contract value, costs to date, estimated cost to complete and billings to date. We maintain the schedule monthly and book over and under billing entries so the P&L reflects percentage of completion.
CIS in the UK
Under the Construction Industry Scheme, UK contractors deduct 20% from registered subcontractors and 30% from unregistered ones, and file a monthly CIS return with HMRC. We verify subcontractors, prepare the deduction statements and CIS return workings, and reconcile deductions suffered against your PAYE liability. Your accountant or the business submits the return.
Construction software we work in
- QuickBooks Online
- QuickBooks Desktop
- Xero
- Bill.com
- Gusto
- Sage 50
- Buildertrend
- Procore
- All 50 platforms
More for construction companies and contractors
Other services for construction
Frequently asked questions
How do you make sure a subcontractor is paid only when it is safe to pay?
Each subcontractor draw is checked against the signed subcontract, the percentage complete confirmed by the project manager, a current insurance certificate and the required lien waiver. Any missing item holds the payment in a pending queue with the reason listed. You see the hold list before every payment run and decide whether to release.
Can you take supplier early-payment discounts into account?
Yes, supplier terms such as 2% 10 net 30 are recorded on each vendor, and the payment schedule shows the discount available if a bill is paid early. Your accountant lists the savings against the cash position so you can decide per run. Discounts taken are posted to a separate account so the effect is visible.
Do you handle joint checks and back charges?
Joint-check arrangements are recorded on the vendor and subcontractor records, and the payment is prepared with both payees for your approval. Back charges against a subcontractor are logged with supporting documents and applied to the next draw. Both are reported monthly so the project ledger and the subcontractor's balance agree.
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