Contractor accountant in Oshawa

Building across Durham, and the work-in-progress question

Much of the construction work in Durham follows residential growth: framing, concrete, drywall, electrical, plumbing and finishing on new homes, plus the renovation and commercial work around them. That work runs in phases, and at any year-end a contractor usually has jobs half done, draws invoiced ahead of the work, or work done and not yet billed. Each of those changes what the year’s revenue actually was.

We review open jobs at the cut-off rather than taking revenue straight from the invoices or the bank. For a small trade that is a short conversation about three or four jobs. For a contractor running several builds it is a proper work-in-progress schedule, and it matters, because the year-end numbers are what the bank and the bonding company will read.

Equipment sits alongside the jobs. Excavators, skid steers, trailers and crew trucks are claimed through capital cost allowance over several years. An asset has to be available for use before year-end to be claimed at all, so a machine delivered in the first week of the new year belongs to the new year. When a contractor applies for a line of credit or a surety bond, the lender looks at the same statements; lender readiness covers what they tend to ask for, and CCA classes covers the equipment side.

The 10% holdback and when revenue is earned

Ontario’s Construction Act lets the payer on a contract retain 10% of each payment as a holdback until the lien period passes. For the contractor that is earned money not yet received. It belongs in the books as a separate holdback receivable, created when the progress invoice goes out and cleared when the holdback is released. Left out of the books, it distorts revenue and hides how much cash is locked in finished work.

On the payable side, a general contractor holding back from its own subcontractors records the mirror image: a holdback payable. Keeping both visible is what lets you see whether the business is financing its builders, or its subs are financing it. Construction holdbacks walks through the entries.

Progress billing, and when HST becomes payable

HST on a progress draw generally becomes payable when the invoice is issued or the payment is received, whichever comes first, not when the job is finished. A contractor that invoices a large draw at the end of a reporting period owes the HST on it that period, even if the builder pays next month. Holdbacks have their own rule: the HST on the retained amount generally becomes payable when the holdback is paid or falls due, rather than with the original invoice. Coding holdbacks separately is what lets the HST return get that right.

New-build residential work adds its own layer, in general terms. A builder who constructs or substantially renovates a home and sells or rents it can owe HST on the full value of the house under the self-supply rules. Buyers may be entitled to new housing rebates that the builder often credits at closing. A trade working for a builder charges HST on its own invoices in the ordinary way. Which side of that line your company sits on is worth settling before you price the job. The GST/HST hub covers the basics.

Subcontractors, T5018 slips and classification

A business whose main activity is construction reports payments to subcontractors for construction services on T5018 slips, due six months after the end of the reporting period. The information has to be collected when the sub is set up, not reconstructed from cheque stubs later. The T5018 subcontractor tracker keeps it in one place, and T5018 reporting explains who files.

The harder question is whether a regular sub is really a subcontractor. A helper who works only for you, on your schedule, with your tools, can look like an employee to the CRA, and a reassessment brings CPP, EI and penalties with it. We document the basis for each arrangement so it would stand up if examined; see subcontractor or employee.

WSIB and clearance certificates

WSIB coverage is compulsory for most construction businesses in Ontario, and in construction it can extend to independent operators and executive officers who would be optional in other industries. The hiring contractor also carries exposure for its subs: if a subcontractor is not in good standing, its premiums can land on you. The protection is a clearance certificate, pulled before work starts and again before each payment, and kept with the sub’s invoice. We build that check into the payables routine. If you run a crew of your own, payroll in Oshawa covers WSIB premiums alongside CRA remittances.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• T2 corporate return and year-end financial statements
• Holdbacks and work in progress reviewed at the cut-off
• HST on progress draws and holdbacks coded and filed
• T5018 subcontractor information returns
• WSIB clearance checks kept with payables
• Equipment and vehicle CCA schedules
• Ontario Business Registry annual return

Fixed fees, fully online

EverStone is an Abbotsford CPA firm, and Oshawa runs on Eastern time, ahead of us, so your end of day lands in our afternoon. Everything runs by video, phone and secure upload, which fits a business run from a truck or a site trailer. A typical trades corporation bundle of bookkeeping, payroll and the year-end T2 usually runs $450 to $650 a month, and the fee is fixed before work starts. See what it costs.

Remote contractor accounting from Abbotsford

Contractor accounting for Oshawa clients is delivered remotely from Abbotsford, British Columbia. There is no Oshawa office and no local team. Meetings are virtual, documents are signed electronically, and you deal with the CPA directly rather than an intake desk. Subcontractor payments, holdbacks and equipment costs are tracked as they happen rather than reconstructed at year end.