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Welcome To:

The Contractor Checklist

QuickBooks Master Class

Subcontractor Payment Compliance

✅ One subcontractor fully set up in QBO
✅ Documents properly uploaded and attached
✅ Compliance approval workflow implemented
✅ Payment risk reduced to near zero

This standard gives your company total financial control and keeps projects lien-free.

Goal: Every subcontractor payment is legal, documented, lien-secure, and audit-proof.

Section 1 — Proper Subcontractor Setup

Before ANY work starts and before ANY money leaves the company, collect:

  • W-9 form (verifies legal tax entity)

  • Certificate of Insurance (General Liability + Workers’ Comp)

  • Signed Subcontractor Agreement

  • Payment terms (progress billing or milestones)

Upload all documents inside the Vendor Profile in QuickBooks Online so compliance stays attached to every transaction.

Once documented, you have proof of proper classification and insurance coverage — required by lenders and auditors.

Section 2 — Lien Law Protection

Require lien waivers on every project where SAWs (labor + materials) are provided.

Use this rule:


→ Conditional Lien Waiver before payment
→ Unconditional Lien Waiver after payment clears

Attach the signed waiver directly to the Vendor Bill in QuickBooks.
This protects the homeowner and you from future lien claims.

Section 3 — Job Costing & Bill Verification

Every subcontractor bill must clearly show:

  • What job it belongs to

  • What phase or cost code it relates to

  • What work is being invoiced

QuickBooks instructions:

Assign the bill to:
Project → Cost Category → Memo with installation detail

Attach backup documentation:

  • Delivery tickets

  • Schedule of Values

  • Purchase Order

  • Approved Change Order

This prevents overbilling and supports lender draw requests.

Automate Payroll Processing

Section 4 — Approval Workflow BEFORE Payment Release

Use this internal compliance flow:

1️⃣ Confirm documents:
W-9, insurance, signed contract, approved change orders

2️⃣ Confirm work:
Work completed correctly and verified onsite by PM

3️⃣ Confirm compliance attachments in QBO:
Lien waiver + all support docs attached to the bill

4️⃣ Confirm cost coding:
Accounting confirms bill is correct and assigned to proper project

Once ALL four items are complete → Payment is released

This process ensures nobody can accidentally cut checks outside policy.

Automate Payroll Processing

Section 5 — Reporting & Audit Controls

Review these in QuickBooks monthly:

  • Subcontractor insurance expiration reports

  • Job costing reports for budget overruns

  • Project profitability by trade

  • Bills pending compliance versus approved for pay

This keeps the business safe from:

  • Insurance audits

  • Tax audits

  • Lien exposure

  • Overpayment disputes

Thank you for completing this Session!

What Students Will Produce in This Class

✅ One subcontractor fully set up in QBO
✅ Documents properly uploaded and attached
✅ Compliance approval workflow implemented
✅ Payment risk reduced to near zero

This standard gives your company total financial control and keeps projects lien-free.

What is in the Master Class?

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