Vendor Invoice Tracking for Contractors

How to capture every invoice, assign it to the right job, and stop profit leaks.

Contractors don’t lose profit because jobs “go wrong.”
They lose profit because invoices get lost, receipts never get turned in, and vendor accounts go unreviewed for months.

Here’s the truth:

If you can’t track your invoices, you can’t track your job costs.
And if you can’t track your job costs, you can’t protect your profit.

This guide gives you a simple, scalable vendor invoicing system you can put in place today — whether you're a one-person trade business or running multiple crews.

1. Why Contractor Invoices Get Lost

The construction workflow is chaotic, and without a system, paperwork disappears fast.

Common issues:

• Materials purchased on the fly

• Delivery slips stuffed into pockets

• Paper invoices handed to random people

• Sub invoices arriving weeks late

• Receipts texted, emailed, or never captured

• Vendor accounts running unchecked

Chaos by default = inaccurate job costing every time.

Vendor invoice tracking is the backbone of accurate financials.

2. What Actually Counts as a Vendor Invoice

Contractors often miss key documents. Track ALL of these:

• Paper invoices

• Digital invoices

• Receipts

• Delivery slips / tickets

• Subcontractor invoices

• Quotes that turn into invoices
  

Rule:
If money is being spent on a job, the document must be tracked.

3. The Simple Vendor Invoice Workflow (Your System)

This workflow is simple, scalable, and eliminates 90% of problems.

Step 1: Material or service is purchased

Crew uses a company card or vendor account.

Step 2: Capture the Receipt or Invoice Immediately

This is the most important step — and the easiest one to implement.

Anytime anyone buys materials, picks up supplies, or receives a delivery slip:

👉 The foreman (or whoever has the receipt) must take a picture immediately and email it to accounting.

Not later.
Not at lunch.
Not at the end of the day.

The rule:

“If you get a receipt, take a picture and email it immediately.”

Workflow:

• Paper receipt → Take picture → Email to
  invoices@yourcompany.com

• Digital receipt → Forward to the same email
  Subject: JOB NAME – Materials – Vendor

• Delivery slip → Take picture → Email to accounting

This gives accounting instant visibility and prevents lost documents.

Step 3: File the invoice into the Job Folder

After sending the photo:

• Upload to the job’s digital folder

• Or place the paper receipt in a designated accounting bin

Step 4: Code the invoice correctly

Every invoice must be coded with:

• Job

• Cost code

• Category (labor, materials, subs, overhead)

• Vendor

• Date

• Amount

Step 5: Enter the invoice into your accounting system

Every document becomes:

• A Bill, or

• An Expense

depending on your accounting system’s structure.

Step 6: Attach the receipt or invoice inside your accounting system

This ensures:

• No missing documents

• Clean audit trail

• Accurate job costing

• Easy month-end review

This should be a non-negotiable rule.

Step 7: Reconcile against vendor statements monthly

This is where missing invoices get caught.

You should:

1. Pull vendor statements

2. Compare every item to your Job Folder

3. Make sure every line exists in your accounting system

4. Fix missing invoices

5. Correct wrong job assignments

6. Close open balances

This is how you protect your profit mid-job instead of discovering issues after the fact.

Learn more and dive deeper into an invoice workflow

4. The Golden Rule: ALL Vendor Invoices Go to ONE Email

Invoices get lost when they’re:

• Texted

• Handed to foremen

• Sent to personal inboxes

• Left in trucks

• Scattered between team members

• Buried in email threads

The fix:

Create one dedicated invoice inbox.

Examples:

invoices@yourcompany.com

yourcompanyinvoices@gmail.com

And tell everyone:

“All invoices must go to this email. No exceptions.”

This centralizes the entire workflow.

5. Every Invoice Must Be Uploaded (No Exceptions)

Once invoices hit the inbox, they must be stored correctly.

Option A — Upload to your Job Folder system (Drive, OneDrive, Dropbox)

Keep every invoice here:

Job Folder → 03 – Vendor Invoices

This creates a clean project-level archive.

Option B — Attach the invoice inside your accounting system

This creates an audit-ready file for every transaction.

• Upload PDF or picture

• Assign job

• Assign cost code

• Save

Best Practice: Use BOTH

✔ Attach inside your accounting system
✔ Store backup in the Job Folder

This makes your process bulletproof.

6. Coding Invoices Correctly (The Job Costing Connection)

Every invoice should be coded with:

• Job

• Cost code

• Category

• Vendor

• Date

• Amount

Clean coding = clean job costing.

Bad coding = inaccurate numbers.

7. The Monthly Vendor Statement Review

Vendor statements reveal:

• Missing invoices

• Double entries

• Wrong amounts

• Open balances

• Incorrect job assignments

• Late posting errors

Your monthly workflow:

1. Pull statement

2. Compare line by line

3. Match to invoices

4. Fix any gaps

5. Correct coding

6. Update your accounting system

This keeps material accounts tight and prevents surprises.

8. Common Contractor Mistakes (and Fixes)

❌ Receipts sitting in trucks
→ Fix: Immediate photo → invoice inbox

❌ Sub invoices going to random employees
→ Fix: One invoice inbox only

❌ Vendor accounts unreviewed
→ Fix: Monthly statement review

❌ Invoices not assigned to jobs
→ Fix: Mandatory job + cost code

❌ Missing document attachments
→ Fix: No invoice enters the accounting system without a document attached

Clean systems = clean numbers.

9. Missing Invoices = Missing Write-Offs (Real Money Lost)

This is the hidden cost of bad invoice tracking.

A missing invoice is a missing tax deduction.
Missing deductions = overpaying taxes.
Overpaying taxes = losing real money.

Example:

If you miss $10,000 worth of invoices…
Tax rate: ~25%

You overpaid:
$2,500 in taxes
…because paperwork got lost.

Missing invoices hurt:

• job costing

• tax deductions

• profitability

• cash flow

• estimating accuracy

• year-end accounting

This is why your “photo → email inbox → accounting system” workflow matters.

10. What This System Gives You

✔ Accurate job costing
✔ No more missing receipts
✔ Organized job folders
✔ Faster billing and month-end close
✔ Better estimating
✔ Tighter cash flow
✔ Higher profit
✔ A scalable system your business can grow on

You don’t need complicated software.
You need systems that your team can follow.

This is that system.

Additional Resources:

How to Build a Cost Code System for Your Trade

Labor Tracking & Payroll Allocation for Contractors

Job Costing Basics for Trades & Contractors

Contractor Invoice Approval Workflow

FAQ: Vendor Invoice Tracking for Contractors

1. Why do contractors need a vendor invoice tracking system?

Because without a system, invoices get lost, receipts pile up in trucks, jobs get overbilled, and accounting has to guess where costs belong.
A tracking system keeps all invoices organized, searchable, and tied to the correct job.

2. Should invoices go directly to the project manager or accounting?

Invoices should go to one central inbox:

📧 invoices@yourcompany.com

PMs should NOT receive invoices directly.
Accounting should NOT hunt for documents.

One inbox keeps everything clean.

3. Who saves the invoice into the job folder?

The accountant or admin, not the PM.
They place the invoice into the correct job folder and into the correct status folder (Needs Verification → Needs PM Review → Approved, etc.).

This creates structure and eliminates missing documents.

4. What do we do with receipts from the field?

The foreman or crew member should:

1. Take a picture immediately

2. Email it to invoices@yourcompany.com

3. Throw the paper away or hand it in

This removes the “receipt in the truck for 3 weeks” problem.

5. How do we track recurring vendor invoices (like monthly statements)?

You still track each invoice individually.
Statements are for reconciling — not replacing invoices.

EdgeStrat Finance provides contractor-focused bookkeeping and job costing services designed to prevent labor overruns and protect profit on every project.

Explore our contractor accounting services

Disclaimer:
This content is for general educational purposes only and does not constitute tax, legal, or accounting advice. Individual circumstances vary, and tax and reporting requirements can change. Always consult a qualified CPA, tax professional, or legal advisor for guidance specific to your business.