California AB5 worker classification
The subcontractor-classification detail behind your construction books — books-only, educational.
AB5 classificationCalifornia · Construction Accounting
California construction accounting that knows which job made money.
In California, a construction contractor is the consumer of the materials it furnishes and installs but the retailer of the fixtures it furnishes and installs (CDTFA Regulation 1521), so materials and fixtures belong on separate lines in the books. We code them apart on every job, set up real job costing, WIP, AIA billing, and retainage, handle California prevailing-wage and certified payroll, keep books CSLB-aware, and sort subcontractor 1099s under AB5 — prepared by a senior bookkeeper who works in your software, or by a signed specialist practice when your books need one.
Monthly bookkeeping: $500–$2,500+ a monthWhat sets the price
If your file needs our paid diagnostic first, its fee is credited in full against the cleanup. Either way, you get a fixed fee in writing before any work starts.
§ The short version
California construction accounting from TechBrot shows which job made money: job costing, WIP, AIA billing and retainage in your own QuickBooks file, plus prevailing-wage and certified-payroll records for public works. Materials and fixtures sit on separate lines, because CDTFA Regulation 1521 taxes them differently. Monthly bookkeeping runs $500–$2,500+/mo.
They took something that felt overwhelming to me as a first-year business owner and made it simple.
What stood out the most was TechBrot Inc’s attention to detail.
Intuit QuickBooks Certification Level 2 and QuickBooks Workforce Certification,
§ 01 · Why California contractor books break
Three places California contractors lose the numbers.
Profitable-looking contractors go under when these go unmanaged. Knowing which one you’re in tells us where to start.
01Job costs
Jobs that quietly lose money
Without real job costing and a WIP schedule, a contractor can look profitable while individual jobs bleed — the loss only shows up after the job (and the cash) is gone.02Payroll
Prevailing wage & certified payroll
Public-works jobs require prevailing wage and certified payroll under the DIR. Books that aren’t set up for it turn certified payroll into a scramble and a compliance risk.03Subs & AB5
Subcontractors as exposure
A sub-heavy roster doing core work is exactly what AB5’s Prong B reclassifies — and what 1099 records hide until the EDD or a workers’-comp audit looks.§ 02 · What TechBrot handles
How we cost a California contractor’s jobs.
Every engagement is scoped to your jobs and crew, delivered in your own QuickBooks file by your TechBrot team, with every close reviewed by a Certified QuickBooks ProAdvisor.
01
Real job costing
Labor, materials, subs, and equipment tied to each job so true job margin is visible, not a blended number.
QuickBooks accountant02
WIP schedules
Costs vs billings tracked per job so over- and under-billings and real margin are visible before the job closes.
Monthly bookkeeping03
AIA billing & retainage
Progress billing (AIA G702/G703) and retainage receivable/payable tracked so cash and billings stay straight.
QuickBooks accountant04
Prevailing-wage payroll records
Payroll and job coding kept clean for certified payroll under the DIR — you (or your provider) submit; we keep the records right.
Payroll05
Subcontractor 1099 & AB5
Sub records and 1099s kept clean with AB5 exposure surfaced for your advisors.
AB5 classification06
CSLB-aware, CPA-ready books
Books kept clean for CSLB licensing and bonding and ready for your CPA to file from.
Financial statements§ 03 · Tools we work alongside
Connected to how you build.
- Procore, Buildertrend, and construction-management platforms
- Knowify and job-costing tools
- Certified-payroll / prevailing-wage tools (eCPR)
- Gusto, ADP, and construction payroll providers
- Bill.com for subcontractor and vendor AP
- QuickBooks Online or hosted Desktop — your file
We reconcile alongside the project-management and payroll tools you already run — the books read from how you build.
§ 04 · How engagements work
From guesswork to job-level profit.
Every California construction engagement follows the same rhythm — books accurate first, job-profit visibility second, advisory third.
- Step 1
Free job & payroll review
A QuickBooks ProAdvisor reviews your jobs, WIP, and California payroll requirements — at no cost. - Step 2
Written fixed-fee scope
A written scope and fixed fee within 3 business days — setup, cleanup, or monthly. - Step 3
Build job costing & WIP
Job costing and a WIP schedule set up, AIA billing and retainage tracked, payroll records cleaned. - Step 4
Monthly job profit
A monthly close showing job-level profit and WIP, CPA-ready and bonding-ready.
§ 05 · Beyond the books
Accurate job costs are the start. Winning the right bids is the point.
When job costs are accurate and WIP is visible, the decisions get real: which work to bid, which crews and job types make money, whether to take the bonded public-works job — answered from numbers that tie.
That’s where fractional-CFO advisory picks up, on cleaned-up books, in coordination with your CPA and bonding agent.
Checked against California DIR and CSLB guidance.
§ 07 · Around this page
Around California.
California QuickBooks ProAdvisor & bookkeeping
The state page: services, industries, cities and the California tax terms in one place.Construction accounting, nationally
The national engagement this page is the California version of — same scope, same written fixed fee.Also in California
Other California industries
California cities
Not sure where your file stands? Start with the free QuickBooks file review · how California compares: state-by-state tax quirks.
§ 08 · FAQ
California construction accounting questions.
What does California construction accounting include?
Real job costing, WIP schedules (costs vs billings), AIA progress billing and retainage, California prevailing-wage and certified-payroll record-keeping, subcontractor 1099 and AB5 tracking, and CSLB-aware, CPA-ready books — in your own QuickBooks file.
How does California prevailing wage and certified payroll work?
Public-works (government-funded) projects in California require paying prevailing wage and submitting certified payroll records electronically (eCPR) to the Department of Industrial Relations / DLSE. We keep the payroll records and job coding clean so accurate certified payroll can be produced; the submission and labor-compliance obligations are yours or your payroll provider’s. We keep the books behind it right; we don’t submit certified payroll or represent you before the DIR.
How do job costing and WIP schedules work?
We tie labor, materials, subcontractors, and equipment to each job and maintain a WIP schedule comparing costs incurred to amounts billed. That surfaces over- and under-billings and shows real job margin before the job closes — so a job that’s bleeding gets caught while you can still do something about it, not at year-end.
How does AB5 affect my subcontractors?
California’s ABC test can reclassify subcontractors doing core work as employees, with payroll-tax and workers’-comp exposure. We keep 1099 sub records clean and surface the exposure in the books so your advisors can act. The classification determination and any EDD or workers’-comp audit are handled by your CPA or employment attorney; see our AB5 page.
Do you keep books CSLB-ready for licensing and bonding?
Yes — we keep clean, organized financials that support CSLB licensing requirements and the financial statements your bonding agent needs. The license and bond are yours to maintain; we make sure the books behind them are accurate and current so renewals and bonding aren’t a scramble.
Do you work in my own QuickBooks file?
Yes — your file, your data, in QuickBooks Online or hosted Desktop, with a senior bookkeeper assigned to your file, and every close reviewed by a Certified QuickBooks ProAdvisor before it reaches you, connected to your construction-management and payroll tools rather than proprietary software.
Do you work with subcontractors and specialty trades, not just GCs?
Yes — subs and specialty trades (electrical, plumbing, HVAC, concrete) share the construction challenges: job costing, retainage, prevailing wage on public work, and AB5 on their own subs and labor. We handle the same job-cost discipline whether you’re the GC or the sub.
California contractors start here