Construction Accounting Software: Progress Claims, Retention and Job Costing

Construction accounting software is accounting software that can invoice one contract in stages over months, hold money the client retains as an asset with a release trigger, and put every dollar of cost against the job that caused it. A standard small-business ledger does the first badly and the other two not at all. A progress claim is a contract position, not an invoice. Retention is money you have earned but cannot spend yet. And job costing matters most while a job is running, which is when a general ledger has the least to say.

Key Takeaways

• A ledger's obligation is statutory completeness. A job cost's obligation is per-job truth. In construction those diverge.
• A builder's ledger must handle five things a standard one does not: progress claims across months, retention as an asset, cost-code job costing, TPAR payment data, and GST timing.
• Xero includes project time and cost tracking only on its Ultimate tier, from $143 per month as at October 2026. MYOB's basic job tracking starts on Business Lite at $315 per year.
• GST on a progress claim attaches when the tax invoice is issued, not when the cash lands. Retention has a separate attribution rule.
• For most builders under a handful of concurrent jobs, one ledger plus a construction app beats forcing construction into the ledger.

Which Plans Include Job Tracking, and What They Cost

Does the ledger you already pay for run a job cost, or do you need a layer on top? The answer sits on the plan tier. Both tables come from the vendors' own Australian pricing pages, checked October 2026. Xero prices are AUD including GST; the bracketed MYOB figures are first-term offers, not the standing rate.

Source: Xero AU pricing plans and the Ultimate 10 plan detail page, checked October 2026.

Sources: MYOB AU pricing and the AccountRight Premier page, checked October 2026.

The split is structural, not a matter of quality. MYOB puts per-job profit and loss lower in the range, on Business Lite and Pro, with per-job budgets and billing by time on AccountRight Plus. Xero puts time costed against jobs at the top instead, and that head-to-head is worked through separately in best accounting software for contractors.

What a Builder's Ledger Must Handle That a Standard One Does Not

A general ledger records what was spent, by account. It has no obligation to tell you what a job will finish at. Four gaps follow, and one sits outside the ledger entirely.

Progress claims spread across months. A claim carries the contract total, what has been claimed, what remains, and the variations that moved the number. A ledger handles an invoice fine but does not natively hold the contract position behind it, so hand-built claims take days to reconcile mid-job. Our guide to progress claims software covers the claim document itself.

Retention held as an asset, not a discount. Retention is a percentage withheld from each claim as security for performance, released in part at practical completion and the balance at the end of the defects liability period. Treat it as a reduction on the invoice rather than a tracked amount with a release date and nobody knows the group's total exposure. The test for any system: can it list every retention held, by subcontract, with the release date attached?

Job costing at cost-code level. A tracking category is a tag on a past transaction. A job cost is a budget compared against committed and actual spend, line by line, while you can still act on the variance. That difference is where most builders discover their ledger has run out. Our guide to job costing and cost control covers the cost code structure.

TPAR payment data. Building and construction sits inside the taxable payments reporting system, so the labour-versus-materials split on a subcontractor invoice is a decision made at entry, not a report you run in July. Estimating sits upstream, covered in construction estimating software.

GST on Progress Claims and Retention

The ATO, not the software, decides when GST lands. Businesses with aggregated turnover under $10 million may choose the cash or non-cash method; most larger businesses must use non-cash (ATO, page last updated 14 September 2026). On the non-cash basis, GST on a sale is accounted for in the period you issue the tax invoice or receive payment, whichever comes first. That rule is written against the invoice, not the portion your client holds back, so a builder booking a claim on accruals who forgets to accrue GST on the retained amount has remitted GST on money still in the principal's account.

Retention has an attribution rule of its own. GST on the non-retained consideration is attributed to the earlier of the period any part of it is received or a tax invoice is issued, while GST on the retention amount is attributed to the earlier of the period the retained amount is received or an invoice for the retention amount is issued (ATO determination). That is the mechanical reason the retention invoice has to exist as a document. Released retention forms part of the consideration under the building contract (ATO issues register).

Income tax runs on a different clock. Retention is not assessable income until the taxpayer receives it or becomes entitled to receive it (ATO TR 2018/3).

The Obligations That Do Not Come From the Ledger

A business operating primarily in building and construction must lodge a Taxable payments annual report for payments to contractors or subcontractors, provided it has an ABN, due 28 August each year (ATO, page last updated 23 April 2024). Where an invoice covers both labour and materials you report the total, but labour incidental to the supply of materials is excluded, as are materials-only payments, labour hire and unpaid invoices after 30 June (ATO, last updated 23 April 2024).

Payroll now sits inside the job cost flow. Single Touch Payroll was expanded from 1 January 2022 to carry additional employment and tax information through STP-enabled software (ATO, last updated 13 November 2023). From 1 July 2026, Payday Super requires super guarantee to reach the employee's fund within seven business days of payday (ATO, page last updated 10 August 2026). A weekly pay cycle against a monthly claim cycle means payroll cash leaves before claim cash arrives.

None of this is a software feature. It is an obligation the software supports or does not, which is the threshold a construction ERP is judged against.

One Ledger, or a Ledger Plus a Construction App?

One ledger wins when you run a few concurrent jobs, claims follow a simple schedule, you hold little retention or can track what you hold by hand, you operate as one entity, and your accountant works inside that ledger.

A ledger plus a construction app wins when several jobs run at once, retention is spread across many subcontracts with different release dates, you need cost codes deeper than the ledger's dimensions allow, or you want committed cost visible before the invoice arrives. The structural limit worth naming is that Xero allows two active tracking categories, which advisers identify as the ceiling when you need project and cost code at once. That is practitioner consensus rather than a Xero statement.

Approved claims push across as invoices, approved bills push across already coded to the job, and retention stays in the layer that understands the release trigger. Where the app sits in a wider stack is mapped in our construction management software guide, and job management software for builders covers the field-execution end.

What This Looks Like Inside a Delivery Business

DDDI runs delivery inside its own group, and the accounting discipline there is why our builder-enablement work starts from the ledger and cost code structure rather than from a demo. Cyberidge Construction runs a formally gated six-stage process from site assessment to handover. A gate backed by a claim schedule, a purchase order history and an approved variation register is a control; a gate that exists only in a meeting is a conversation. Retention release at practical completion is one of those gates, and a gate with no owner is not a control at all. You can see how that plays out on the Cyberidge delivery record.

Frequently Asked Questions

Does Xero Do Job Costing for Construction?

Partially. Xero includes project time and cost tracking on its Ultimate tier, from $143 per month for 10 users as at October 2026, with $7 per additional user. Ignite, Grow and Comprehensive do not list the feature. What it does not do is hold progress claims against a contract, retention as a tracked asset, or variations as first-class objects.

Which Is Better for a Builder, Xero or MYOB?

It depends on which shape of job tracking you need and how many people you pay. MYOB puts basic job tracking lower, on Business Lite and Pro. Xero puts time costed against jobs at the top, on Ultimate. The head-to-head is in our guide to the best accounting software for contractors.

How Is GST Handled on Progress Claims and Retention in Australia?

On the non-cash basis, GST on a progress claim is attributed to the period the tax invoice is issued or payment is received, whichever is earlier. Retention has a separate rule: GST on the retention amount is attributed to the earlier of the period the retained amount is received or an invoice for the retention amount is issued.

Does Construction Accounting Software Handle Retention?

Not always. Software treating a claim as an invoice will not hold retention, because retention is not a discount on the invoice, it is an amount owed to you with a release date attached. Ask to see every retention currently held, by subcontract, with its release date. If that needs a spreadsheet, the system is not holding retention.

Do I Need a Construction App as Well as an Accounting Ledger?

Not automatically. If your gaps are claims, retention and cost-code depth, a construction layer that syncs to your existing ledger is cheaper and faster than a migration. If you run a few jobs with simple claims and little retention, the ledger is the right answer.

Sorting the Decision From the Software

Fix the cost code structure first, because it decides whether any system will work. Then name the gap you are closing: job costing depth, claims and retention, or payroll and compliance load. Each has an answer cheaper than replacing the ledger.

DDDI Group works with builders on the estimating, quoting and delivery systems that sit around the books. Start with builder enablement, review the Cyberidge delivery record, or put a real project through Get Started.