Profit by job, not just profit by month
An electrical contractor can show a profit on the year-end return and still not know whether the service van calls, the tenant improvement jobs or the new construction rough-ins are carrying the business. Without job costing, materials, labor and subcontractor bills land in one bucket and every job looks the same.
We tag material purchases, payroll hours and sub invoices to the job they belong to, so you can see margin by job and by job type. Then you price the next bid with real numbers instead of a feeling.
Want to see what that looks like? Watch the 2-minute walkthrough.
WIP, over billing and under billing
On longer jobs you bill by schedule of values or progress, and the billing rarely matches the work done. Over billing means you have collected more than you have earned so far. Under billing means you have earned more than you have billed. Both are normal, but neither shows up on a basic profit and loss statement.
A work in progress schedule compares billed to earned on each open job and shows the over or under billing position. It is how you catch a job that is fading before the final invoice, and it is what a bank or surety will ask to see. We explain how the two tax methods differ in percentage of completion vs completed contract.
Retainage
When a customer holds back part of every progress payment, that money is real but it is not in your bank. Retainage receivable has to be tracked job by job so you know what you are owed and when it is due, and retainage you hold back from your own subs is a payable on the other side. When it sits outside the books, cash forecasts are wrong and old retainage gets forgotten.
Vehicles, tools and equipment
- Vehicles. Service vans and trucks are often your biggest depreciable assets. How a vehicle is classified and documented changes the deduction, so we plan it before you buy, not after
- Section 179 and bonus depreciation. Equipment generally has to be placed in service by December 31 to count for that year. A big deduction is not always the right move, and we run a projection first
- Mileage and logs. If you use a vehicle for business and personal driving, records decide what holds up
See our tax planning service for how the projection works.
S corp salary and payroll
Many electrical contractors operate as an LLC taxed as a sole proprietor or partnership and pay self-employment tax on all of the profit. An S corp can change that, but the IRS expects an owner who works in the business to be paid reasonable compensation through payroll. We set the salary using a documented study, set up payroll, and keep it consistent year to year. Our S corp salary checklist is a good starting point.
Sales tax on materials
How sales tax applies to the materials you buy and to what you charge a customer varies by state, and often depends on whether the work is a real property contract or a repair or service call. We check the rules for the state where you work and make sure your invoices and resale or exemption paperwork match.
What clients say
“Sargis is great to work with. This was my first time hiring a CPA instead of doing it myself, and I'm glad I did, thanks Sargis.”
“Sargis is a tax strategist who has supported my business’ growth and helps me spend more of my own time running the other aspects of my business. His team is responsive, professional, and thorough.”
“Sargis and his team have been a lifesaver for our business. We are incredibly grateful not only for the quality of work they deliver, but the customer service that they offer.”
Questions we get asked
Do you work with electricians outside North Carolina?
Yes. Everything is virtual, and we work with contractors in all 50 states. State rules on sales tax, licensing and payroll vary, so we confirm what applies where you work.
What is job costing for an electrical contractor?
Job costing means every material purchase, labor hour and sub invoice is tagged to the job it belongs to. It gives you margin by job and by job type, so you know which work to chase and which to price higher.
How do I know if I am over billed or under billed on a job?
A work in progress schedule compares what you have billed to how much of the job is complete. Over billing means billings are ahead of the work, and under billing means the work is ahead of billings. We prepare the schedule and book the entry.
Should my electrical business be an S corp?
It depends on profit, how you are paid today and what a reasonable salary would be for your role. We run the numbers before recommending a change, and if it makes sense we handle the election, the salary study and payroll setup.
Do I need to send 1099s to my subcontractors?
Generally yes, for subs who are individuals, sole proprietors, partnerships or most LLCs, once you pay them $2,000 or more in a year, starting with payments made in 2026. Collect a W-9 before the first payment.