How it runs for construction companies and contractors
Deposits taken before work begins are held as customer liabilities until earned. Payouts are reconciled weekly so the bank feed, the processor dashboard and the job ledger agree.
What is payment processor reconciliation?
Payment processor reconciliation is the work of proving that the money a processor or marketplace deposits equals your gross sales less its fees, refunds, chargebacks, reserves and adjustments for the same settlement period. Each payout is broken into its parts and posted so revenue, fees and sales tax are correct and the bank deposit matches to the cent.
What we handle for construction companies and contractors
- Stripe, Square and QuickBooks Payments payouts matched to customer payments
- Processing fees posted separately rather than netted from revenue
- Customer deposits held as liabilities until the related billing is earned
- Refunds, disputes and chargebacks tracked per job with the reason
- Buildertrend payment-link receipts synced and reconciled to the ledger
The KPI that matters here
Every processor payout matched to its transactions within 3 business days of settlement.
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
Payment processor reconciliation in other industries
Frequently asked questions
Why does the Stripe payout never match my invoices?
Stripe pays out the net of processing fees and groups several customer payments into one transfer, often across two calendar days. The accountant uses the balance transaction report to split each payout into gross payments, fees, refunds and disputes, then applies each piece to the right invoice and job. The fees are then visible as a cost rather than hidden in revenue.
How are customer deposits treated when taken by card?
A deposit taken before work starts is recorded as a customer liability, not as revenue, and is applied to the first progress billing or as the contract states. The processing fee is expensed when the deposit is received. This keeps revenue tied to work performed and avoids overstating profit in the month the deposit lands.
Do you handle chargebacks on construction payments?
Yes, a chargeback is posted against the original job with the dispute reason, and the accountant assembles the contract, signed change orders and payment history to support your response through the processor's dispute process. The outcome is recorded when the processor rules, and any fee is expensed to the job so the margin reflects it.
Ask an AI assistant to summarize this page
Opens the assistant with a prefilled prompt so you can check our claims against the page yourself.