Best Accounting Software for Contractors

Whether you're a general contractor managing construction projects or an independent contractor filing 1099s, your accounting needs go beyond basic income and expense tracking. You need job costing to know which projects are profitable. You need progress billing and retainage tracking. You need to manage subcontractor payments and generate 1099s at year-end. And you need a tool that handles the irregular cash flow patterns that come with project-based work — big deposits, slow payments, and seasonal gaps. Here are seven accounting tools that contractors are actually using, from solo operators to mid-size construction firms.

Detailed Reviews

QuickBooks Online Plus — $115/mo

QuickBooks Plus is the default recommendation for contractors because of its project tracking (job costing) feature. Create a project for each job, assign expenses, labor hours, and income to it, and see profitability per project in real time. Progress invoicing lets you bill clients in stages as milestones are completed. The 1099 contractor tracking feature manages subcontractor payments and generates 1099 forms at year-end. Integration with construction estimating tools, time tracking apps, and payroll services rounds out the feature set. The limitations: QuickBooks doesn't handle AIA billing forms natively, retainage tracking requires workarounds, and the project profitability reports — while useful — aren't as detailed as construction-specific tools. For a GC running $500K–$2M in annual projects, it's a solid choice. Beyond that, construction-specific software scales better.

Verdict: Best for general contractors and small construction firms needing job costing without construction-specific pricing.

FreshBooks — $33–$60/mo

For independent contractors who bill hourly or per project (IT consultants, electricians, plumbers doing residential work), FreshBooks offers a clean, intuitive experience. Time tracking feeds directly into invoices, project-based billing organizes your work by client, and expense tracking with receipt capture keeps your deductions documented. The proposals feature lets you send estimates that convert to invoices with one click. At $33/month (Plus plan), you get 50 clients, time tracking, and bank reconciliation. Premium ($60/mo) removes client limits. The limitations: no job costing in the construction sense, no subcontractor 1099 management, and no progress billing. FreshBooks is built for service providers, not builders.

Verdict: Best for solo independent contractors (1099 workers) who bill for time and services.

Foundation Software — Custom ($300+/mo)

Foundation is built specifically for construction contractors and it shows. AIA-format billing (G702/G703) generates natively. Certified payroll handles prevailing wage and Davis-Bacon requirements. Work-in-progress (WIP) reporting shows percentage-of-completion on every job. Job costing breaks down by cost code, phase, and category. Equipment tracking calculates usage costs per job. This is the tool that construction CPAs recommend for firms doing $2M+ in annual revenue. The downsides: pricing starts around $300/month and climbs with users and modules, implementation takes weeks, and the learning curve is steep. The interface is functional but not modern. For a solo contractor or small GC, this is overkill and overpriced.

Verdict: Best for mid-to-large construction firms that need AIA billing, certified payroll, and WIP reporting.

Sage 100 Contractor — Custom ($400+/mo)

Sage 100 Contractor (formerly Sage Master Builder) is the enterprise option for large construction companies. It covers accounting, project management, estimating, service management, and payroll in one system. The accounting module handles job costing at any level of detail — by project, phase, cost type, cost code, and category. Retainage tracking, progress billing, and change order management are built in. Payroll handles multi-state, union, and prevailing wage requirements. Reporting is comprehensive enough for audits and bonding requirements. The cost is significant (typically $400+/month plus implementation), and you'll likely need a Sage consultant for setup. This is for companies with 20+ employees and $5M+ in revenue.

Verdict: Best for large construction companies needing comprehensive project management and accounting in one system.

Xero — $29–$75/mo

Xero is a good choice for contractors who work internationally or want a modern, cloud-first accounting tool. The project tracking feature (Standard plan, $50/mo) lets you track time, costs, and profitability by job. Multi-currency support handles international clients and suppliers. The integration ecosystem connects to construction-specific tools like Buildertrend and Knowify. Bank reconciliation is Xero's strongest feature — it learns your patterns and makes categorization fast. The downsides for contractors: no native 1099 management (use a third-party tool), no AIA billing, and the project tracking isn't as deep as QuickBooks' for job costing. Better for independent contractors and small firms than for construction companies.

Verdict: Best for internationally-focused contractors or tech-savvy independents who want a modern interface.

Wave — Free

Wave works for independent contractors who are just starting out and need to track income and expenses without spending money. Free accounting, invoicing, and bank connections cover the basics. Create invoices for completed work, categorize expenses for tax deductions, and generate simple financial reports. The limitations are obvious: no job costing, no time tracking, no 1099 management, no project profitability tracking. For a handyman doing side work or a new independent contractor building their client base, Wave gets you through year one. Plan to upgrade as your business grows.

Verdict: Best for brand-new independent contractors who need free accounting to get started.

Holdings — Free

Holdings combines free business checking with AI-powered bookkeeping designed for independent contractors and small businesses. The AI automatically categorizes your transactions into tax-relevant categories — materials, subcontractor payments, vehicle expenses, tools — so your books stay organized year-round. No monthly fees, 1.75% APY on your checking balance, and $3M FDIC insurance. For a solo contractor who wants their banking and bookkeeping in one place without paying $38–115/month for QuickBooks, Holdings is built for that use case. The limitation: no job costing or project-level tracking yet, so if you need to know which projects are profitable, you'll need a supplementary tool.

Verdict: Best for independent contractors who want combined banking and bookkeeping at zero cost.

What to Look For