Set Up Contractor Banking, Accounting, and Tax Records

A. Finished-Project Specification

Quantity: one approved Financial-Control Checklist, one chart-of-accounts and cost-code worksheet, one bank-account and signing-authority log, one receipt-capture and petty-cash log, and one tax-document folder index, each dated and signed by the owner and reviewed by the CPA, bookkeeper, bank officer, and payroll provider as applicable.

B. Document Schedule (Component Schedule)

Document	Quantity	Format	Content Required	Preparation / Purpose
Financial-Control Checklist	1	Written checklist, multi-section	Accounts, signing authority, chart of accounts, procedures, and approval record	The single controlling document referenced by every later chapter
Chart-of-Accounts and Cost-Code Worksheet	1	Structured table	Income, direct-cost, overhead, and equity categories aligned with Books 24 and 26	Basis for job costing and financial reporting
Bank-Account and Signing-Authority Log	1	Table	Account name, purpose, signers, approval limits, dual-control rules	Confirms correct account use and authorized signers
Receipt-Capture and Petty-Cash Log	1	Table	Date, vendor, amount, project, cost code, purpose, approver	Supports expense documentation and job costing
Tax-Document Folder Index	1	Folder index	Filing year, form type, and responsible preparer	Supports timely, organized tax filing and audit readiness

C. Information Takeoff

• Entity information: the approved legal entity name, ownership, taxpayer identification, and signing authority from Project 02, gathered before Step 1.
• Operational information: the confirmed licensing status from Project 03 and confirmed insurance and bonding status from Project 04, gathered before accounts are opened.
• Cost-code reference: the Book 24 estimating cost codes and the Book 26 job-cost structure, used to build the chart of accounts in Section F.
• Professional input: the CPA or tax professional, bookkeeper, bank officer, and payroll provider (if employees are planned), consulted throughout Sections E through H.

D. Acceptance Standards

Check	Standard
Fund separation	Every business account is opened in the correct legal name; no customer or business fund has been deposited into or paid from a personal account
Signing authority	Every account has documented signers, approval limits, and dual-control rules consistent with the Project 02 signing-authority matrix
Chart of accounts	Income, direct-cost, overhead, and equity categories are defined and aligned with the Book 24 and Book 26 cost-code structure
Receipt and record controls	Every transaction is documented with date, vendor, amount, project, cost code, purpose, and approver
Payroll and subcontractor records	Payroll, timekeeping, and subcontractor tax-document procedures are established with qualified professional review; no worker is classified without that review
Reconciliation and reporting	Monthly bank and credit-card reconciliation, receivable, payable, cash-flow, and job-cost review procedures are documented and assigned to a responsible person
Test transaction	One transaction has been run from estimate through invoice, payment, purchase, payroll, reconciliation, job cost, and financial report without unresolved errors
Professional review	The CPA, bookkeeper, bank officer, payroll provider, and attorney as applicable have reviewed the completed system and their comments are recorded and addressed before approval

E. Banking Structure and Signing Authority

1. Provide the bank, CPA, bookkeeper, payroll provider, and tax professional with the approved entity, ownership, authority, licenses, and business model. Record the date and attendees of this initial meeting on the Financial-Control Checklist.
2. Open business bank accounts in the correct legal name and taxpayer identity. Record the account name, account number reference, and opening date on the bank-account and signing-authority log.
3. Define operating, payroll, tax, savings, equipment, credit-card, line-of-credit, deposit, trust, or other accounts based on professional advice. Record the specific purpose of each account and mark any account still pending professional confirmation.
4. Do not deposit customer funds into personal accounts. Record this rule as a standing control on the Financial-Control Checklist with the corrective procedure for any violation.
5. Create bank-signing authority, approval limits, dual-control, and online-access rules. Record each authorized signer, their approval limit, and any dual-control requirement on the bank-account and signing-authority log.
6. Create fraud controls for vendor changes, wire transfers, ACH, checks, credit cards, refunds, and employee reimbursements. Record the specific verification step required before each transaction type is executed.

F. Chart of Accounts and Category Structure

1. Create an accounting chart aligned with the Book 24 cost codes and Book 26 job-cost system. Record each account category and its corresponding Book 24 or Book 26 cost code on the chart-of-accounts worksheet.
2. Create income categories for contract revenue, approved changes, allowances, service calls, maintenance, deposits, refunds, tax, and other receipts. List each income category as its own row.
3. Create direct-cost categories for labor, materials, subcontractors, equipment, permits, delivery, disposal, and project-specific expenses. List each direct-cost category and its associated cost code.
4. Create overhead categories for office, insurance, licenses, vehicles, software, marketing, professional fees, training, and administration. List each overhead category separately from direct cost.
5. Create owner equity, contribution, distribution, draw, loan, and reimbursement categories with professional guidance. Record each category and the CPA's guidance on its use.

G. Transaction, Payroll, and Subcontractor Controls

1. Create customer, project, contract, invoice, payment, credit, and receivable records. Record the fields required for each customer and project record on the chart-of-accounts worksheet.
2. Create vendor, purchase, bill, payment, credit, tax-document, and payable records. Record the fields required for each vendor record.
3. Create purchase-order and authorization requirements by amount and category. Record the specific dollar thresholds requiring purchase-order approval.
4. Create a receipt-capture procedure using date, vendor, amount, project, purpose, and approver. Enter the procedure on the receipt-capture and petty-cash log template.
5. Prohibit undocumented cash spending except through a controlled petty-cash procedure. Record the petty-cash limit, custodian, and reconciliation frequency.
6. Create employee timekeeping, payroll, reimbursement, benefit, withholding, and personnel-data procedures. Record the payroll provider's procedure and pay schedule.
7. Create subcontractor tax-document, insurance, invoice, payment, lien-release, and classification records. Record the specific documents required before a subcontractor invoice is paid.
8. Do not use a tax form as proof that a worker is legally an independent contractor. Record this rule as a standing control with the CPA's classification-review procedure.
9. Identify sales tax, use tax, gross-receipts tax, payroll tax, income tax, franchise tax, excise, local tax, and filing obligations with qualified professionals. Record each applicable obligation, filing frequency, and responsible preparer.
10. Create tax liability accounts and payment schedules. Record each tax-liability account and its funding and remittance schedule.
11. Do not spend payroll withholding, collected tax, trust funds, or restricted project funds. Record this rule as a standing control with the corrective procedure for any violation.

H. Reconciliation, Reporting, Testing, and Approval

1. Create monthly bank and credit-card reconciliation procedures. Record the responsible person and the target completion date each month.
2. Create monthly accounts receivable, accounts payable, cash-flow, job-cost, balance-sheet, and income-statement review procedures. Record the review schedule and responsible reviewer.
3. Create a cash forecast showing expected receipts, payroll, tax, material, subcontract, debt, and overhead. Record the forecast period and update frequency.
4. Create payment acceptance, refund, chargeback, financing, card-fee, and fraud procedures. Record each procedure and its responsible person.
5. Create debt, lease, equipment finance, and personal-guarantee records. Record each obligation and its review status with counsel.
6. Create a fixed-asset and depreciation-information file for professional tax treatment. Record each fixed asset and its acquisition data for the CPA.
7. Create tax-document folders by filing year and form type. Build the tax-document folder index with a folder for each filing year and form type.
8. Create record-retention and secure-destruction schedules with professional advice. Record the retention period for each record category.
9. Create backup, access, password, device, and cybersecurity procedures for financial systems. Record the specific control for each system.
10. Run a test transaction from estimate through invoice, payment, purchase, payroll, reconciliation, job cost, and financial report. Record the test transaction's project identifier and each processing step completed.
11. Correct duplicate, miscoded, unreconciled, or unsupported entries. Record each correction and the date it was resolved.
12. Review the full system with the CPA, bookkeeper, bank, payroll provider, and attorney as applicable. Record each reviewer's name, role, and comments on the Financial-Control Checklist.
13. Approve the financial-control checklist and assign daily, weekly, monthly, quarterly, and annual responsibilities. Sign and date the checklist, and record the responsible person for each recurring task.