Builders and developers rarely stay with one company for long. Each new project gets its own LLC to contain risk, equipment moves into a separate company, and a management company starts charging fees. Every one of those entities needs its own books, and the money moving between them needs to be traceable.
This guide lays out an accounting system for a group of construction or real estate companies, in the order we set it up for new clients. It works whether you have three entities or fifteen.
1. Map your entities and what each one does
Start with a one-page map of the group. For each entity, write down its legal name, EIN, owners, tax classification, bank accounts and its role. A typical structure looks like this:
| Entity | Role | Typical money flows |
|---|---|---|
| Holding or management company | Owns the other entities, employs office staff | Charges management fees; pays salaries and overhead |
| Construction company (GC) | Builds the projects | Bills project LLCs; pays subcontractors and crews |
| Project LLC (one per project) | Owns the land and the building; borrows the construction loan | Receives loan draws; pays the GC; sells or rents the property |
| Equipment company | Owns trucks and machinery | Rents equipment to the GC |
This map becomes the reference for every bookkeeping decision: when a bill comes in, the first question is always which company does this belong to?
2. Give every entity its own books and bank accounts
Each LLC gets its own QuickBooks file, its own operating bank account and its own credit cards. Avoid paying one company's bills from another company's account; when it has to happen, record it as an intercompany transaction (step 5) the same day.
Separate books are what make an LLC worth having. If the money is mixed, it becomes harder to defend the separation between companies, and much harder to produce statements a lender or buyer will trust.
3. Use one chart of accounts across all companies
Build a master chart of accounts and use it in every file, with the same names and numbers. A project LLC won't use every account, but when "5100 Subcontractors" means the same thing everywhere, you can compare companies and combine them in minutes.
Include the accounts that construction groups always end up needing:
- Construction in Progress (per project) and Construction Loan Payable
- Retainage Receivable and Retainage Payable
- Due from / Due to one account pair for each related company
- Management Fee Income / Expense and Equipment Rental Income / Expense
- Capitalized Interest (kept separate so your CPA can decide its tax treatment)
4. Track every project the same way
Inside each file, set up projects and cost codes the same way everywhere (see our job costing guide). The rule that keeps it working: no transaction gets saved without a company and a project. Overhead goes to a dedicated "Company overhead" project or class, not left blank.
If a project has a construction loan, match your cost codes to the lender's budget lines so draw requests come straight from the books.
5. Record intercompany transactions on both sides
Money moving between your companies is where multi-entity books usually go wrong. Every intercompany transaction has to be recorded in both companies, with the same date and amount:
| What happened | Company that sends money | Company that receives money |
|---|---|---|
| Holding company lends $50,000 to Project LLC | Due from Project LLC (asset) ↑ / Cash ↓ | Cash ↑ / Due to Holding (liability) ↑ |
| GC pays a Project LLC permit fee from its account | Due from Project LLC ↑ / Cash ↓ | Permits (project cost) ↑ / Due to GC ↑ |
| Management company charges a monthly fee | Due from Project LLC ↑ / Management fee income ↑ | Management fee expense ↑ / Due to Management Co. ↑ |
Back recurring charges like management fees and equipment rent with a written agreement that sets the amount or the method. Charges invented at year-end to move profit around are a red flag for lenders and for tax purposes.
At the end of every month, each "Due from" balance must equal the matching "Due to" balance in the other company. If Holding shows $50,000 due from Project A, Project A must show $50,000 due to Holding. Any difference is an entry recorded on only one side.
6. Close every company on the same monthly schedule
- Record all bills, payments, payroll and loan draws for the month, assigned to a company and project.
- Reconcile every bank account, credit card and loan account in every entity.
- Match intercompany balances between each pair of companies.
- Record accruals, retainage and interest.
- Review job cost reports for each active project.
- Lock the period in each QuickBooks file so nothing changes after the reports go out.
7. Report by company, by project and for the whole group
Owners of a group need three views each month:
- By company: a profit and loss statement and balance sheet for each entity, which is what lenders and your CPA ask for.
- By project: budget vs. actual and profitability for each job.
- Consolidated: the group combined, with intercompany balances, fees and rent removed so nothing is counted twice. For small groups a well-built spreadsheet is enough; larger groups use consolidation tools that connect to QuickBooks.
8. Plan for the Texas tax filings
Texas has no state personal income tax, but most LLCs are subject to the franchise tax. For reports due in 2026 and 2027, the no-tax-due threshold is $2.65 million in total revenue, and entities at or below it still file an information report. Affiliated entities that operate as a unitary business generally file one combined report, so the threshold is tested on the group's combined revenue. Ask your CPA which of your entities belong in the combined group.
Clean intercompany records make this much easier: your CPA needs to see revenue by entity and the transactions between them to prepare a combined report correctly.
Who should run this system?
A small group can run this system with a capable in-house bookkeeper and a CPA at year-end. As the number of entities grows, the work shifts from data entry to coordination: matching intercompany balances, keeping project tracking consistent and getting the documents everyone else needs. That is the point where many owners bring in a bookkeeper who specializes in multi-company construction books.
Frequently asked questions
Do I need a separate QuickBooks file for each LLC?
In most cases, yes. Each LLC is its own legal entity with its own bank accounts and tax reporting, so each should have its own set of books. Using classes inside one file to separate companies makes it easy to mix money between entities and hard to produce clean statements for each one.
How do I record money moved between my companies?
Record it as an intercompany loan in both sets of books at the same time: a 'Due from' asset in the company that sends the money and a matching 'Due to' liability in the company that receives it. Never record it as income or expense unless there is a real charge behind it, such as a written management fee or equipment rental.
What is consolidated reporting?
Consolidated reporting combines the financial statements of related companies into one view, after removing the transactions between them so nothing is counted twice. It shows the owner the real financial position of the whole group.
Does each Texas LLC file its own franchise tax report?
Not always. Texas generally requires affiliated entities that operate as a unitary business to file a combined franchise tax report, and the no-tax-due threshold is then tested on the group's combined revenue. Your CPA should confirm which of your entities belong in the combined group.
How often should a multi-company group close its books?
Monthly. Close every entity on the same schedule, reconcile intercompany balances so they match on both sides, and only then review project and consolidated reports.
Want someone to run this for you?
I set up and run the books for construction businesses and developers with several projects and LLCs. Book a free 30-minute call and we will look at how your books are organized today.
This guide is general information for business owners, not tax or legal advice. R&J Consultants provides bookkeeping and does not prepare IRS returns; confirm tax and legal treatment for your situation with your CPA or attorney.