A lot of paving companies set QuickBooks up once, years ago, with one income account and a pile of expenses. It pays the bills and files the taxes. It can't tell you whether sealcoating makes more money than paving, or which job lost it.
A few changes to how the books are set up fix that. Talk to your accountant before you restructure accounts mid-year. They'll want to know.
Income accounts by type of work
Set up a separate income account for each kind of work you sell:
- Paving
- Sealcoating and crack sealing
- Striping
- Concrete
- Other (equipment transport and setup, permits and fees you rebill)
Then your profit and loss shows revenue by type of work, and once costs are split the same way, the margin on each.
Products and services. Each item you put on an invoice points to an income account. Set up items for your types of work and point each one at the right income account. When invoices use the right items, revenue lands in the right place without anyone thinking about it.
Cost accounts that match how a job costs
Keep direct job costs in cost of goods sold, separated so you can see them:
- Materials: asphalt, aggregate, sealer, crack sealant, paint, concrete
- Direct labor: crew wages, payroll taxes and workers' comp for field crews
- Subcontractors: milling subs, trucking, striping or concrete subs
- Equipment: rentals, fuel, and repairs charged to jobs
- Trucking and material transport
Keep overhead below the line in expenses: office wages, insurance, rent, office vehicles, software, marketing. That split is what lets you calculate your overhead rate each year.
Track each job
QuickBooks Online Plus and Advanced let you track projects. Set one up per job, and assign every invoice, bill, expense and time entry for the job to it. The project report then shows the income, costs and profit on that job.
Classes or locations can add another layer, like a class per division or per crew, if you need it.
What you get out is only as good as what goes in. A plant bill entered without the project doesn't count against the job.
Subs, W-9s and 1099s
- Set up each sub as a vendor, with a W-9 on file, and mark them as a 1099 contractor.
- Map your subcontractor expense account to the right 1099 box (usually nonemployee compensation, 1099-NEC).
- At year end, QuickBooks lists the vendors who crossed the reporting threshold.
The 1099-NEC threshold was $600 for years. Federal law raised it to $2,000 for payments made starting in 2026. Payments to corporations are generally exempt, with exceptions such as attorneys. Confirm the details for your situation with your accountant.
Sales tax
Whether paving and sealcoating are taxable, and how, depends on your state, and sometimes on whether the work is new construction, repair, or for a tax-exempt customer. Some states tax the materials you buy instead of the service you sell.
Get it right with your accountant, set up the rates in QuickBooks, and mark tax-exempt customers, like schools, churches and government work, with their exemption certificate on file.
If your QuickBooks Online has Automated Sales Tax, you don't have to build the rates twice. With Pavr connected, finalizing an invoice asks QuickBooks for the tax on the taxable lines at the job site, and the invoice goes back carrying QuickBooks' figure, split by agency. Add a state's tax agency in QuickBooks once, and your accountant files from QuickBooks as always. Without Automated Sales Tax, or with Xero, Pavr works the tax out from the job site's tax group, which you build or let Pavr fill in, and sends it along.
Related articles
- Deposits and progress payments: getting paid before the job's done
- Managing subs: COIs, W-9s and payment terms
- Pricing paving work for profit: start from the margin you need
Pavr is job software for paving, sealcoating, striping and concrete contractors that connects to QuickBooks Online. Finalize an invoice in Pavr and it goes to QuickBooks with the customer. Every line uses one item, "Construction Services", so point that item at the income account you want. A check you record in Pavr goes to QuickBooks, a payment you record in QuickBooks comes back, and neither is counted twice. Try it free → Weighing that against the spreadsheet you price in now? Pavr vs spreadsheets and QuickBooks lays out what each one does and what moving costs.