Think Big Construction Accounting

California Subcontractors: A Big Win on Retention 🚧

Beginning January 1, 2026, SB 61 changes the game: retention on private construction projects will now be capped at 5%.

For years, many subcontractors have had 10% of their payments withheld on private jobs, creating major cash-flow strain. With this new law, private works will finally align with the 5% public works cap.

Why this matters to contractors:

💰 Improved cash flow

🧾 Less payroll floated on credit

📊 More predictable payment schedules

🏗️ Stronger position in competitive bidding

⚠️ Some exceptions still apply (residential under four stories, and certain bonding situations).

Now’s the time to prepare.
If you’re signing long-term contracts or master agreements, start reviewing and updating retention provisions before 2026 so you don’t lock in outdated terms.

Construction accounting isn’t just about balancing books—it’s about protecting profits and keeping cash where it belongs: in your business.

The Hidden Costs Contractors Miss Without Job Costing

If you are a contractor in Modesto or anywhere in California, you know how competitive the construction industry is. This is where solid construction accounting and bookkeeping practices make all the difference. Without job costing, you cannot see the real profit on your projects.

Many contractors believe they know what a job costs because they see invoices and payroll. The truth is, unless every expense is tracked against the right project and cost code, the numbers are incomplete.

When labor, materials, equipment, and overhead are not tied directly to each job, profit slips away. You may bid a project at 20 percent margin but discover later that the real margin was closer to 8 percent. That gap can be the reason you are fighting cash flow instead of building it.

Job costing shows you what each project is really making. It reveals where money is leaking and gives you the insight to adjust bids in the future. With proper construction bookkeeping, Modesto contractors can see whether crews, subcontractors, and material purchases are keeping the business profitable.

This is not extra paperwork. It is about protecting your company. Contractors who use job costing consistently win better bids and avoid the profit drain that comes from lumping numbers together.

If you are a contractor in Modesto, California, and you are looking for construction accounting and bookkeeping support, job costing is the first step. We help contractors set this up every day so you can focus on building while your numbers work for you.