How it runs for construction companies and contractors
Deposits, stored materials and allowances are billed under the contract terms. For UK clients, applications for payment and CIS deduction statements are prepared in the same routine, and the billing calendar is built backwards from each customer's cut-off date.
What are outsourced invoicing services?
Outsourced invoicing services mean a remote billing team prepares, checks and sends your customer invoices instead of your office staff doing it between other tasks. The team works inside your accounting or billing software, follows your rate cards and contract terms, and issues credit notes and corrections. You keep control of pricing, approvals and the customer relationship.
What we handle for construction companies and contractors
- Progress billings prepared on G702 and G703 or the owner's own template
- Change orders billed only after written approval is on file
- Retainage calculated per line and reconciled to cumulative billings
- T&M invoices built from approved timesheets and rate schedules
- Conditional lien waivers attached to every pay app before submission
The KPI that matters here
Pay apps submitted within 2 business days of each owner's billing cut-off.
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
Invoicing and billing in other industries
Frequently asked questions
What is the difference between progress billing and T&M invoicing?
Progress billing invoices a fixed-price contract by percentage complete against a schedule of values, with retainage withheld. T&M invoicing bills actual labor hours and materials at agreed rates, usually with a markup and often a not-to-exceed cap. Many contractors run both, and the accountant sets up separate invoice templates and approval steps for each.
How do you handle change orders on the invoice?
Approved change orders are added as new lines on the schedule of values so cumulative billings stay accurate. Pending change orders are tracked on a separate log and never billed until the owner's written approval is on file. Work performed on unapproved changes is flagged in the monthly report so you can decide how to pursue it.
Can you invoice stored materials and deposits?
Yes, when the contract allows billing for stored materials, we include them on the pay app with supporting invoices and, where required, evidence of insurance and storage location. Deposits and mobilization billings are set up as separate lines and drawn down across later applications. This keeps the cumulative billed amount tied to the contract value.
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