How contractor bookkeeping usually works
Start with a quick review: structure (sole trader, company, trust), GST method (cash/accrual), current software, job costing approach, payroll and upcoming deadlines. This shows what to fix first and which processes to standardise.
Work typically runs in three layers:
- Immediate triage: reconcile bank feeds, fix GST coding, clear suspense, lodge any overdue BAS and set super and STP back on track.
- Process design: standardise quotes, purchase orders, timesheets and subcontractor bills; enable projects/jobs; create monthly close checklists.
- Ongoing review: month‑end reconciliations, job profitability, WIP, TPAR data capture and a simple owner report pack.
If payroll, super or contractor payments are part of the mix, coordinate with contractor payroll services so time and cost flow cleanly into jobs and STP.
Australian context to keep in view
- BAS and GST: pick cash or accrual to suit your invoicing pattern; ensure progress claims and deposits are coded correctly.
- TPAR: if you pay contractors in building and construction, cleaning, courier, IT, road freight or security, lodge by 28 August.
- Super and STP: super usually quarterly and STP every pay run; some contractors may be entitled to super even with an ABN.
- PSI: where income is mainly for your labour, PSI may affect deductions—maintain strong job and contract records.
- Assets and vehicles: keep registers for tools, utes and equipment; use logbooks where required.
Need help with compliance? See our BAS agent services or speak with a tax accountant for contractors.
Common contractor bookkeeping tasks
- Quoting, progress claims, variations, retentions and RCTIs where applicable.
- Timesheets and labour costing, subcontractor bills and insurance/induction checks.
- Materials and plant tracking, fuel and travel coding, small tools vs capital assets.
- Job/project setup, WIP and simple monthly job profitability reports.
- TPAR data capture during the year so the August report is a click, not a cleanup.
If you also need broader advice beyond bookkeeping, the contractor accountant overview explains how bookkeeping, tax and payroll tie together.
Software that fits contractors
Most contractors use a core ledger plus a job/field tool:
- Core ledger: Xero, MYOB Business or QuickBooks Online with Projects/Jobs enabled.
- Field/job tools: Xero Projects, WorkflowMax by BlueRock, QuickBooks Time, simPRO, AroFlo, ServiceM8, Buildxact.
- Document capture: Dext, Hubdoc for bills, receipts and compliance docs.
- Payments and approvals: Pay super via SuperStream, use purchase orders and track approvals for subcontractors.
Choose based on quoting, scheduling, mobile workflows and the level of job profitability reporting you need. We can help map your process to the right stack.
What to compare before you commit
Scope
Confirm the scope covers reconciliations, job/project setup, BAS, TPAR, payroll support, monthly close and owner reports—not just coding.
Software fit
Check experience with your tools and integrations and ask for a simple workflow diagram for quotes-to-cash and purchase-to-pay.
Turnaround and communication
Agree on processing cadence (weekly/fortnightly), month‑end dates, who signs off, and how urgent issues are escalated.
Commercial fit
Compare fixed price vs hourly, inclusions/exclusions, meeting rhythm and whether you need compliance only or advisory support.
Key dates for contractors
- BAS: monthly or quarterly depending on registration—don’t leave reconciliations to quarter‑end.
- Super guarantee: generally due 28 days after quarter end.
- STP: on or before each pay run.
- TPAR: due 28 August each year for applicable industries.
- Income tax: due dates vary by lodgement program—coordinate with your contractor tax accountant.
DIY vs outsourcing
DIY can work when transactions are low and jobs are simple. Outsourcing helps when you have multiple jobs, subcontractors, payroll, or strict reporting. Many contractors keep quoting and approvals in‑house but outsource reconciliations, BAS and month‑end reporting.
If you plan to keep some tasks in‑house, ask for a split‑role design so your team and your bookkeeper work from the same checklist and calendar.
Best next steps
Write down the outcome you want: faster month‑end, clean BAS, accurate job margins, simple payroll, or a software switch. Then shortlist providers against that outcome—not just the title.
Use these related pages to go deeper, then make contact:
- Contractor accountant overview for the full picture.
- Contractor payroll services if timesheets and STP are the pain point.
- Tax for contractors if PSI or deductions are in question.
- Bookkeeping services to compare general approaches.
Frequently asked questions
Do contractors need to register for GST?
Register when your GST turnover reaches $75,000 (or earlier if it helps claim credits). Some activities, like rideshare driving, require GST registration regardless of turnover. Choose cash or accrual based on your invoicing and cash flow.
Do I need to pay super to contractors?
Sometimes. If a contractor is paid mainly for their labour, super may be required even if they have an ABN. Review contracts and use the ATO employee vs contractor guidance. Good records protect you.
Who needs to lodge TPAR?
Businesses that pay contractors in building and construction, cleaning, courier, IT, road freight or security generally lodge TPAR by 28 August each year. Capture contractor details and ABNs in your software during the year to make this easy.
How does PSI impact my deductions?
If most income is for your personal effort or skills, PSI rules may limit some deductions and affect how income is treated. Keep clear job records and get advice from a tax accountant for contractors.
Which software is best for job costing?
Xero, MYOB and QuickBooks all support projects or jobs. Add field tools like simPRO, AroFlo, ServiceM8 or Buildxact depending on scheduling, mobile use and reporting depth. The best choice fits your quoting, timesheets and purchasing flow.