Control scope
Use one job ID and approve changes before extra work begins.
Contractor business resources
Price the work.Protect the profit.
A practical finance and bookkeeping guide for Texas contractors.
The profit map
See what the job really earned.
Keep revenue, cost, overhead, profit, and cash separate.
The profit formulas, job-cost structure, close cadence, cash forecast, and internal controls below are management-system recommendations. They are not statutes, tax-return instructions, legal requirements, or conclusions under GAAP.
01
Approved job revenue
Original scope + signed changes − credits
Keep billed, earned, and collected amounts separate.
02
Direct job cost
Labor + burden + subs + materials + field costs
Include owner field labor at a replacement-cost view for management decisions.
03
Gross profit
Revenue − direct job cost
Gross margin = gross profit ÷ revenue.
04
Operating overhead
Office + management + sales + facilities + systems
Recover overhead through pricing; do not hide it inside random job costs.
05
Operating profit
Gross profit − overhead
Then plan taxes, debt service, reinvestment, and owner distributions.
Key formulas
Gross margin
(Revenue − direct cost) ÷ revenue
Markup
Gross profit ÷ direct cost
Working capital
Current assets − current liabilities
Margin and markup are not interchangeable. Price from the margin your business needs, then confirm that the price covers job cost, overhead, risk, and capacity.
Operating controls
Six habits keep profit visible.
Use one job record from estimate through closeout.
Price the full cost
Include labor burden, overhead, equipment, risk, and rework.
Track commitments
Compare estimate, ordered cost, actual cost, and cost to finish.
Separate cash stages
Keep earned, billed, collected, retained, and deposited amounts distinct.
Close monthly
Reconcile cash, cards, debt, payroll, tax, receivables, and payables.
Keep the proof
Attach receipts, time, approvals, tax forms, insurance, and payment records.
Close cadence
Keep the books current.
Every day
- Code time and receipts to the job.
- Record approved changes before work starts.
Every week
- Review job cost, billing, collections, and cash.
- Resolve missing subcontractor documents.
Every month
- Reconcile every balance-sheet account.
- Review job margin, cash forecast, and tax reserve.
Quarterly / yearly
- Update tax and compliance projections.
- Review major elections and purchases before acting.
What to verify
Find the decision. Then confirm the current rule.
Know which decisions need current guidance and professional review.
Official links reviewed Aug. 17, 2026
Educational only.
Do not rely on this page alone to file a return, make an election, classify a worker, set payroll, collect sales tax, bid regulated work, or decide insurance coverage.
Books and accounting method
Confirm before year-end
Document the method in use and review changes before applying them.
Entity, owner pay, and tax reserves
Model before electing
Model owner pay, distributions, and tax reserves before electing.
Workers, payroll, and reporting
Confirm before first payment
Classify the relationship and set payroll records before the first payment.
Vehicles, equipment, and deductions
Review before buying
Confirm business use, records, timing, financing, and cash impact before buying.
Texas contract tax and filings
Classify before pricing
Classify the property, work, contract, customer, and location before pricing.
Insurance, bonds, and public work
Review before signing or bidding
Match coverage, classifications, bonds, and public-work duties to the contract.
Texas contract-tax logic
Classify the job before pricing it.
Property, work, contract, and evidence can change the Texas tax result.
1. Property
Residential, nonresidential, new, existing, or mixed.
2. Work
Construction, repair, remodeling, maintenance, or taxable service.
3. Contract
Lump-sum, separated, exempt, or mixed scope.
4. Evidence
Keep the scope, location, certificates, invoices, and tax treatment.
Insurance and labor risk
Match coverage to the real work.
Keep contracts, payroll, subcontractors, and insurance classifications aligned.
Liability and audit
Confirm coverage, exclusions, insured parties, and the payroll or sales used for premium audit.
Workers’ compensation
Check legal, project, and contract requirements before work starts.
Worker classification
Status follows the real working relationship—not a label or 1099.
Bonds and public work
Price bonding, wage, payroll, and reporting duties before bidding.
Failure-pattern check
Avoid the leaks. Get help before the risk grows.
Common leaks
- 01Calling bank balance profit.
- 02Confusing markup with margin.
- 03Posting cost without a job code.
- 04Doing change work before approval.
- 05Waiting until tax season to reconcile.
When to escalate
Bring in a professional before the decision becomes expensive to unwind.
- Choosing or changing an entity or accounting method.
- Hiring workers or changing their classification.
- Buying major equipment or taking new financing.
- Pricing unfamiliar Texas or public work.
- Signing new insurance, bond, or indemnity terms.
Contractor finance questions
Quick answers.
What is the minimum bookkeeping system a contractor should have?
Separate business accounts, job and cost codes, daily time and receipt capture, written changes, monthly reconciliations, and job-profit reports.
How do I know whether a job was actually profitable?
Put approved revenue and every direct cost on one job, compare estimate to final cost, then subtract overhead. Measure cash separately.
How much cash should I reserve for taxes?
There is no universal percentage. Use a current projection, separate the cash, and update it after each monthly close with professional guidance.
Does issuing a 1099 make a worker an independent contractor?
No. Status comes from the real working relationship, not a label, LLC, invoice, agreement, or tax form.
Is Texas contractor labor subject to sales tax?
Sometimes. Property, work, contract form, exemptions, and location can change the result. Classify the job before quoting.
Can Completa replace my accounting or tax system?
No. Completa Pro connects project records; it does not replace accounting, payroll, tax, insurance, or professional advice.
Primary-source library
Open the source that owns the rule.
Independent, unpaid links. Review dates show when Completa checked each page—not whether a rule applies to you.
Books & profit
5
Books & profit
5Internal Revenue Service
Publication 583 — Starting a Business and Keeping Records
Record systems, supporting documents, separate accounts, reconciliations, and retention rules.
Reviewed Aug 17, 2026
U.S. Small Business Administration
Manage your finances
Balance sheets, cash versus accrual, bookkeeping responsibilities, and financial-management help.
Reviewed Aug 17, 2026
Federal Deposit Insurance Corporation
Money Smart for Small Business
Free modules for statements, profitability, recordkeeping, cash flow, financing, and insurance.
Reviewed Aug 17, 2026
Internal Revenue Service
Construction Industry Audit Technique Guide
Construction contracts, retainage, WIP, book-versus-tax differences, and contract accounting. The guide is dated; use current sources for thresholds.
Reviewed Aug 17, 2026
Internal Revenue Service
Publication 538 — Accounting Periods and Methods
Federal rules for cash, accrual, inventories, tax years, and accounting-method changes.
Reviewed Aug 17, 2026
Federal tax
11
Federal tax
11Internal Revenue Service
Revenue Procedure 2025-32 — 2026 inflation adjustments
Official annual inflation adjustments for QBI, expensing, and small-business tax tests.
Reviewed Aug 17, 2026
Internal Revenue Service
General Instructions for Certain Information Returns
Current information-return thresholds, exceptions, filing rules, and recipient-delivery requirements.
Reviewed Aug 17, 2026
Internal Revenue Service
Publication 505 (2026) — Withholding and Estimated Tax
Official estimated-tax triggers, payment timing, penalty rules, and annualized-income method.
Reviewed Aug 17, 2026
Internal Revenue Service
Standard mileage rates
Official business mileage rates and links to the records and vehicle rules that affect their use.
Reviewed Aug 17, 2026
Internal Revenue Service
Publication 463 — Travel, Gift, and Car Expenses
Generally applicable guidance for vehicle methods, expense substantiation, meals, and accountable reimbursements.
Reviewed Aug 17, 2026
Internal Revenue Service
Additional first-year depreciation guidance
Current guidance on additional first-year depreciation, eligible property, timing, and elections.
Reviewed Aug 17, 2026
Internal Revenue Service
Topic 554 — Self-employment tax
Who may owe self-employment tax and how its Social Security and Medicare components work.
Reviewed Aug 17, 2026
Internal Revenue Service
Business structures
Federal return structure for sole proprietorships, partnerships, corporations, S corporations, and LLCs.
Reviewed Aug 17, 2026
Internal Revenue Service
Paying yourself
General IRS guidance on owner compensation, corporate officers, distributions, partner treatment, and worker status.
Reviewed Aug 17, 2026
Internal Revenue Service
S corporation compensation and medical insurance issues
Reasonable compensation must precede non-wage distributions to a shareholder-employee who provides services.
Reviewed Aug 17, 2026
Financial Crimes Enforcement Network
Beneficial Ownership Information Reporting
Current federal beneficial-ownership reporting status, definitions, filing guidance, and official alerts.
Reviewed Aug 17, 2026
Texas tax
4
Texas tax
4Texas Comptroller of Public Accounts
April 2026 Tax Policy News — Franchise Tax
Current Texas franchise-tax filing changes, information-report duties, and federal-tax conformity.
Reviewed Aug 17, 2026
Texas Comptroller of Public Accounts
Real Property Repair and Remodeling
Texas sales-tax treatment for new construction, residential work, nonresidential work, and mixed scopes.
Reviewed Aug 17, 2026
Texas Comptroller of Public Accounts
Homebuilders and Real Property Services
How lump-sum versus separated contracts change the contractor’s sales- and use-tax position.
Reviewed Aug 17, 2026
Texas Comptroller of Public Accounts
Valuing Property — Business Personal Property Renditions
Current business-personal-property rendition duties, filing timing, extensions, exemptions, and penalties.
Reviewed Aug 17, 2026
Payroll & classification
6
Payroll & classification
6Internal Revenue Service
Employment tax recordkeeping
The employment-tax records employers must keep and the events that affect retention.
Reviewed Aug 17, 2026
Internal Revenue Service
Publication 15 (2026) — Employer’s Tax Guide
Current federal employer rules for withholding, deposits, returns, and payroll reporting.
Reviewed Aug 17, 2026
U.S. Department of Labor
Construction Industry under the FLSA
Construction coverage, workweek records, minimum wage, and overtime after 40 hours for covered nonexempt employees.
Reviewed Aug 17, 2026
Texas Workforce Commission
Classifying Employees and Independent Contractors
Texas direction-and-control analysis for distinguishing employees from independent contractors.
Reviewed Aug 17, 2026
Texas Workforce Commission
Unemployment Insurance Tax Rates
Current Texas unemployment-tax rates, taxable wages, account rates, and employer guidance.
Reviewed Aug 17, 2026
Texas Workforce Commission
New Hire Reporting
Texas new-hire and rehire reporting requirements, submission methods, and employer resources.
Reviewed Aug 17, 2026
Insurance & risk
4
Insurance & risk
4Texas Department of Insurance
Commercial General Liability Insurance
CGL coverage categories, exclusions, occurrence versus claims-made, carrier types, and premium audits.
Reviewed Aug 17, 2026
Texas Department of Insurance
Workers’ Compensation Employer Resources
Texas coverage choices, reporting duties, employer protections, claims, and workplace-safety help.
Reviewed Aug 17, 2026
Texas Department of Insurance
Employer E-File and Non-subscriber Reporting
Required notices and injury reporting for Texas employers that do not carry workers’ compensation.
Reviewed Aug 17, 2026
Texas Department of Insurance
Bond Resources
Construction performance and payment bonds, license bonds, surety resources, and public-work requirements.
Reviewed Aug 17, 2026
Make the project record do more
Run cleaner projects.
Completa Pro connects scope, approvals, costs, payments, and project history.