Record‑Keeping Rules Every Utah Contractor Should Nail

Utah construction moves quickly. Subs rotate on and off the site, materials get bought on the fly, and someone always wants a document you swore you saved. Clean records are what protect your lien rights, speed up payment, and keep auditors from eating your week. This guide focuses on the Utah rules that matter, the paperwork you actually need, and simple routines that make it all stick.

The handful of Utah rules you cannot ignore

First, the legal stuff that actually hurts if you miss it. Utah gives you clear deadlines and limits.

• Preliminary notice: To preserve lien rights you file in the State Construction Registry within 20 days of first furnishing labor or materials. Save the timestamped confirmation and any follow-up emails.
• Retainage cap: Owners and primes can hold no more than 5 percent of the total contract price, and the same limit flows down. Track exactly what is withheld and when it is released.
• Sales and use tax: Keep the records that show what you collected and why something was exempt. Utah expects at least three years of documentation. If you consume materials you bought tax free, you owe use tax and need to show the calculation.
• Payroll and unemployment records: Utah Workforce Services wants wage detail for four years. The IRS wants at least four years of employment tax records and longer for anything tied to returns with carryforwards.
• Certified payroll: On federal or federally assisted work you submit a certified payroll every week and keep the signed statement plus all the backup.

None of this is exotic, but you must be able to pull proof fast. That is where your system comes in.

Build one solid job file for every project

Open a single digital folder as soon as the job is real. Give it a number or code and teach everyone to drop related files there. A good job file will include the contract and all signed change orders, the original estimate, proof of your preliminary notice, lien waivers from every tier, daily reports, timecards, invoices, receipts, certified payrolls if required, insurance certificates, permits, inspection reports, warranties, and the final pay app package. If you can find these items in under a minute, you are already ahead of most shops.

Keep it digital first. Scan anything that comes in on paper, and name it in a way that sorts itself (more on that later).

Separate compliance records from project noise

Some documents do not belong in a single job folder, because you will need them for audits or annual filings.

Set up a firm-wide “Compliance” or “Tax & Payroll” folder. Park these there:

• Sales and use tax returns, worksheets, and exemption certificates
• Quarterly unemployment filings, contribution rate notices, and wage detail reports
• Certified payroll packets and Davis–Bacon correspondence (organized by project but indexed here)
• Corporate and state income tax returns, depreciation schedules, fixed-asset invoices

When the state or the IRS asks a question, you do not want to comb through twenty job folders to answer it.

Change orders: treat them like mini contracts

Change orders are where margin disappears. A verbal “go ahead” is not enough. Your CO should spell out scope, dollar value, and any schedule impact. Get signatures. Then tag every related cost in your accounting software to that CO code. Drop the RFIs, pricing spreadsheets, T&M tickets, and email approvals into the same place as the signed CO. If the approval started verbally, write a short confirmation email that day and attach it to the CO packet. When someone wants to argue later, you have a tidy trail.

Subcontractor and supplier packets you always collect

Onboarding should be boring and consistent. Ask for a W‑9, an insurance certificate with the right limits and endorsements, a signed subcontract with your flow-down clauses, proof they filed their own preliminary notice if that is part of your plan, and any safety or compliance documents the owner requires.

At each pay app, match the conditional lien waiver to the amount being paid and make sure insurance has not expired. On projects with certified payroll requirements, collect the weekly reports before releasing the check. At final payment, get the unconditional waiver, warranties, and as-builts. It sounds tedious. It is much less tedious than trying to collect these after you have paid out.

Labor: record what auditors and owners actually want to see

A timecard that says “40 hours – Job A” is not enough. Capture hours by employee, by day, and by cost code or phase. Keep the original time data. If you correct a mistake, note who made the change and why. Reconcile payroll registers to job cost at least weekly so certified payroll numbers match your internal books.

On Davis–Bacon jobs, keep the wage determination sheets, fringe benefit calculations, and proof that benefits were paid or credited. Attach all of that to the weekly certified payroll packet. Those are the first things an investigator will ask for.

Materials, equipment, and use tax: track it as you go

Every vendor invoice should be coded to a job and cost code before it is paid. Bulk buys are fine if the spreadsheet that splits them between jobs is saved with the invoice. When you pull inventory or consumables for your own use, record the pull and book the use tax in that month’s workpapers. Utah auditors love to look for materials bought tax free and then consumed.

For equipment, keep rental agreements and usage logs that show which job used the machine and for how long. If you charge internal equipment rates, keep the calculations and the usage sheets. Without them, auditors may call it profit and owners may refuse the cost.

Retainage and closeout: prove the math, not the story

Utah’s five percent cap is simple, but owners will still hold more if you let them. Keep a retainage ledger for every project. It should show the original contract price, each change order, retainage withheld each billing, and retainage released. When it is time to ask for the final release, attach the ledger and the waiver to a formal request. If someone withholds more than five percent for a claimed breach, ask for the written explanation the law requires and file it with the ledger.

A month-end routine that keeps you clean

A short checklist, done the same way every month, is the best record-keeping tool you will ever adopt. Here is a workable rhythm:

1. Reconcile bank, credit card, and loan accounts.
2. Update the WIP schedule: percent complete, costs to date, billed to date, and over or under billings.
3. File sales and use tax returns. Attach the return, the payment confirmation, and the workpapers to that month’s folder.
4. Review new jobs and file preliminary notices if the 20-day clock is still ticking.
5. Update the retainage ledger and request releases that have matured.
6. Run a full backup to your cloud storage and an offline snapshot if you keep one.

Keep this list short enough that it actually gets done.

Digital organization that people will follow

Simple beats clever. Use a folder structure that mirrors the life of a job:

/2025/PROJECT 2314 – Maple Street Clinic/01 Contract/02 Change Orders/03 Pay Apps/04 Payroll/05 Subs & Suppliers/06 Closeout

Inside those, name files so they sort chronologically and by type:

2025-05-08_PrelimNotice_Confirmation.pdf
2025-07-31_CO3_StructuralSteel_Signed.pdf
2025-08-05_PayApp5_ConditionalWaiver_SubXYZ.pdf

Backups must be automatic. Daily cloud backups are table stakes. Take a quarterly offline copy to an external drive stored away from the office or with your CPA. Give payroll and HR folders tighter permissions than general project folders. Use platforms that log activity so you can see who edited what.

How long to keep what

You do not need a wall chart. Remember the longest period and err on the safe side.

• Sales and use tax returns and support: at least three years from the due or payment date.
• Payroll and unemployment records: four calendar years.
• Federal and state income tax returns and support: three years minimum, seven is safer if you carry losses or depreciate large assets.
• Preliminary notices, lien waivers, retainage ledgers, contracts, and change orders: keep through final payment plus any claim or audit period spelled out in the contract. Many firms default to seven years.
• Certified payrolls and Davis–Bacon support: keep for the life of the contract plus the audit period the agency specifies.

If two rules conflict, keep it for the longer period. Storage is cheaper than recreating records.

Quick-start checklist for the next Utah job

Before you mobilize:

• Create the digital folder and cost codes.
• File the preliminary notice and save the confirmation.
• Collect subcontractor packets and verify insurance dates.

During the job:

• Capture daily reports and timecards daily.
• Code invoices before payment.
• Save every signed change order and tag its costs correctly.
• Submit certified payrolls each week if required.

Closeout:

• Reconcile retainage and request release with the ledger attached.
• Collect final waivers, warranties, and O&M manuals.
• Archive the job folder, lock permissions, and back it up.

Pick one weak spot and fix it this week

You do not need a new ERP to get better. Choose a single bottleneck and solve it.

• Preliminary notices going out late? Assign one person, build a three-day reminder, and add it to the month-end list.
• Retainage tracking messy? Add a retainage column to your pay app log and reconcile it monthly.
• Sales tax paperwork scattered? Create one “Exemptions” folder and scan each certificate the day you receive it.
• Payroll backup thin? Attach the original timecards and fringe proof to every certified payroll file.

Small and consistent beats a giant manual nobody opens.

Bottom line: Utah’s rules are specific: 20 days for preliminary notices, 5 percent retainage, three years on tax records, four years on payroll. Build your system around those numbers, name and store files the same way every time, and you will defend lien rights, pass audits, and get paid faster. If you want a ready-to-use folder template or a month-end checklist, say the word.