Trades and home service businesses run on jobs, not steady paycheques — and that job-by-job structure is exactly what most generic bookkeeping advice misses.

Every Job Is Its Own Small Project

Track materials, labour, and subcontractor costs against each job's revenue, not just against the business as a whole. Without job-level tracking, it's easy to be busy all year and still not know which jobs actually made money and which ones quietly lost it.

Materials vs. Labour: Track Them Separately

Lumping materials and labour into one expense line hides the thing you actually need to see — your margin on the work itself versus the cost of the parts. Keep materials in their own account (or Cost of Goods Sold if that fits your setup) and labour in its own, so your profit and loss statement tells you something useful about each job type.

The T5018 Slip Most Trades Businesses Don't Know About

If construction makes up more than 50% of your business income, the CRA requires a T5018 (Statement of Contract Payments) for every Canadian-resident subcontractor you paid more than $500 for construction services in the period — not the T4A most people have heard of. It's due six months after your reporting period ends (calendar year or fiscal year, your choice, applied consistently). This is specific to construction activity: plumbing, electrical, HVAC, general contracting, and similar trades. Missing this is one of the most common trades-specific compliance gaps.

Deposits and Progress Billing Aren't Revenue Yet

When you take a deposit before work starts, or bill in stages as a project progresses, that money isn't revenue the moment it hits your bank account. It's a liability — often called Customer Deposits or Unearned Revenue — until the work it's tied to has actually been done and invoiced. Recording deposits directly as revenue overstates your income for the period and understates it later, which throws off your P&L.

GST/HST is a separate question, and it doesn't wait for you to earn the income: if you're registered, tax is generally due on a deposit the moment you receive it, whether or not you've invoiced for it yet or booked it as revenue. That's the trap that catches people even when the bookkeeping side is done right — correctly parking a deposit as a liability, then assuming that also means no GST/HST is owing yet.

Not sure whether you're over the registration threshold yourself? Take the quiz.

Vehicle and Equipment: What You Can Claim

Company vehicles and bigger equipment are core costs of doing business, but they're deducted differently than a regular expense — spread out over time through Capital Cost Allowance (CCA) rather than expensed all at once in the year you buy them. Small tools are the exception: individual tools costing under $500 fall into a CCA class that lets you write off the full cost the same year, so day to day they behave like a normal expense even though they're technically still CCA. True consumables — blades, bits, fasteners, and the like — aren't capital at all; they're supplies, expensed as bought. If a vehicle is used for both business and personal driving, the same logbook rule applies as anywhere else: date, destination, business purpose, and the kilometres driven for every business trip, plus an odometer reading at the start and end of the year.

What You Can Deduct

Common deductible costs for a trades or home service business include:

• Materials and supplies used on the job
• Subcontractor payments
• Tool and equipment purchases (via CCA) and repairs
• Vehicle costs — fuel, insurance, maintenance, CCA
• Job site permits and inspection fees
• Liability insurance and licensing or certification renewals

FAQ

Do I need separate accounts for each type of job I do? Not necessarily separate accounts — separate job or class tracking inside QBO (Projects or Classes, both on the Plus plan and up) lets you see profitability by job type without multiplying your chart of accounts. 

As the business grows, some trades owners also look at incorporating — take the quiz to see if it's worth exploring. 

What software do trades businesses commonly use alongside QBO? Jobber and Housecall Pro are common for scheduling, quoting, and invoicing in the trades. Both can sync with QBO, but the sync isn't always perfect — duplicate income and mismatched tax codes are worth checking for monthly.

Do I need to charge GST/HST on materials I mark up? Generally yes — if you're GST/HST registered, tax applies to the full invoice amount you charge the client, including any markup on materials, not just your labour.

Job costing, T5018s, deposits — Margot knows the parts of trades bookkeeping that generic advice skips. Ask Margot a question right now.