Accountant for Cranbrook construction contractors

For an incorporated Cranbrook trade or general contractor, monthly bookkeeping, payroll and the year-end T2 with statements usually run $450–$650 a month all-in. Bookkeeping on its own starts from $300 a month with GST and PST filing included. A sole-proprietor tradesperson’s T1 with a T2125 is commonly $250–$450. Every fee is on the pricing page.

Building for the East Kootenay

Construction is one of the sectors the City’s economic development office lists among Cranbrook’s main employers, and it comes in a few distinct shapes. Residential builders and framers put up new houses and suites in town. Renovation contractors work the older housing stock and the cabins and second homes that dot the region. Commercial contractors build the shops, offices and service buildings a regional centre needs. Civil, excavation and industrial contractors follow road work, mill upgrades and mine-site projects across the region and into the Elk Valley. Each shape bills differently, and the books have to match.

A residential builder may hold houses as inventory. A renovator bills small jobs quickly. A civil or industrial contractor bills progress draws against a contract and waits for holdbacks. A one-size chart of accounts fits none of them well.

Most also carry equipment: a work truck, a trailer, an excavator or a skid steer, often financed. Each unit goes on the CCA schedule in its own class, with loan payments split between principal and interest. Mountain winters shorten the outdoor season, so a crew’s best months are compressed into spring, summer and fall, which is one more reason to keep enough cash back for remittances in the quiet weeks.

T5018, if you pay anyone else to do the work

If construction is your main business activity and you pay subcontractors for construction services, you report those payments on T5018 slips. The slips and summary are due six months after the end of the reporting period, which can be the calendar year or your fiscal year. The CRA matches them against the subcontractors’ own returns, so names, business numbers and totals need to be right. Collecting each sub’s details before the first payment is far easier than chasing them in the spring. The T5018 subcontractor tracker helps keep the list current.

Payments that are not for construction services do not go on the T5018. A bookkeeper you pay, an engineer’s fee or equipment rental without an operator are treated differently, and some may belong on a T4A instead. Sorting payments into the right bucket as they are made saves rebuilding the year in February.

PST on the materials you install

BC PST works differently for contractors than for most businesses. A contractor who supplies and installs materials into real property, such as lumber, drywall, roofing or fixtures, is usually treated as the consumer of those materials. You pay 7% PST when you buy them and do not charge PST to the owner on the installed price. Equipment and tools you use are taxable to you as well.

It changes when you sell goods without installing them, or when you fabricate items in a shop. A contractor who also sells appliances, stoves or supplies separately may need to register and collect PST on those sales. The BC PST guide covers the registration test.

Holdbacks sit on both sides of the ledger

On larger jobs, the owner or general contractor holds back part of each payment until the work is complete and lien periods have passed. That money is earned but not yet received, so it belongs in a holdback receivable, not in revenue that never shows up in the bank. If you hold back from your own subs, the mirror image is a holdback payable. Both need tracking job by job and releasing when due. Construction holdbacks explains the entries.

WorkSafeBC, and the clearance letter

Every Cranbrook contractor with workers needs a WorkSafeBC account, and construction classifications carry higher premiums than most. When you hire a subcontractor, ask for a WorkSafeBC clearance letter before paying them. If the sub is not in good standing, you can be held liable for their unpaid premiums. A clearance letter on file for each payment period closes that gap. WorkSafeBC registration covers the setup.

GST on progress billings and new housing

GST is generally due when you invoice, not when you are paid. On a progress-billed job, each draw invoice triggers GST even if the payment, or the holdback, arrives months later. That can strain cash, so the GST account needs to be watched alongside receivables, and the input tax credits on materials and equipment claimed on every return.

A builder who constructs and sells a new house, or substantially renovates one, is in a different position. The sale is taxable, and the builder may need to account for GST on the selling price and deal with new housing rebates. The same applies to a cabin or recreational property built to sell. Get advice before the first spec house is listed, not after.

Jobs in Alberta and travel to site

Cranbrook contractors on the Crowsnest Highway corridor sometimes take work east of the provincial border. A job across the line raises its own questions: whether the company has a permanent establishment in Alberta that means splitting income on the T2, how GST applies to work done there, and how crew travel and lodging are treated in payroll. Out-of-town work inside BC raises the travel question too. A reasonable allowance tied to actual travel can be non-taxable, while a flat top-up is usually wages. We look at the contract before the crew leaves.

Job costing, or a year you cannot explain

Without job costing, a contractor finds out at year-end whether the year made money, and cannot say which jobs did. Labour, materials, equipment time and subcontractors coded to each job as they happen turn the books into a quoting tool. On larger contracts, work in progress at year-end needs measuring too, so revenue lands in the right year. We set up the job structure in your software and keep it current monthly. Construction accounting in BC goes into more detail.

Fully virtual

EverStone is a one-CPA firm that works online. There is no Cranbrook office. Invoices, receipts and contracts come in through a secure upload link, often straight from a phone on site. Questions go by email first, with a video meeting when one helps. The fee is fixed in writing before work starts. For the books themselves, see bookkeeping in Cranbrook; for crews, see payroll in Cranbrook.