Insurance claim work is the most financially complex type of roofing job. Unlike a standard retail re-roof with one contract price and one invoice, an insurance job has multiple payments arriving at different times — an ACV check, a depreciation release, possibly one or more supplements — each of which must be recorded separately in QuickBooks to produce an accurate job profitability report. Most restoration contractors handle this wrong, and the result is jobs that look less profitable than they are, or holdback payments that get forgotten entirely.
What Is the Difference Between ACV and RCV?
ACV (Actual Cash Value) is the depreciated value of the damaged property — the replacement cost minus depreciation based on the age and condition of the materials before the loss. RCV (Replacement Cost Value) is the full cost to replace the damaged property with new materials, regardless of age.
For a restoration contractor, the insurance payment sequence typically works like this:
| Payment | When Paid | Amount (Example) | QuickBooks Account |
|---|---|---|---|
| ACV check | After claim approval | $21,000 | Insurance Claim Revenue |
| Depreciation holdback (RCV release) | After work completed + documented | $9,000 | Depreciation Holdback Receivable → Insurance Claim Revenue |
| Supplement(s) | After approval of additional scope | $2,400 | Insurance Claim Revenue (separate invoice) |
| Total received | $32,400 |
The deductible is not your revenue — it is the homeowner's responsibility. Do not record it as part of your income. Record the gross claim amount as revenue and note the deductible as the homeowner's payment separately.
What Is Depreciation Holdback and How Do You Track It?
Depreciation holdback (also called withheld depreciation or recoverable depreciation) is the amount the insurance company holds back from the initial payment, equal to the difference between ACV and RCV. They release it once you submit proof that the work was completed — typically a signed completion certificate, photos, and final invoice.
This holdback is money you have earned but not yet received. It is a receivable — an asset — and must be tracked in QuickBooks. If it is not tracked, it is invisible, and restoration contractors routinely fail to follow up on holdback release because they have no system telling them it exists.
How to set up depreciation holdback tracking in QuickBooks
- Create a Depreciation Holdback Receivable account — type: Other Current Asset
- When recording the initial ACV payment, create the invoice for the full RCV amount
- Add a negative line item for the holdback amount — debit Depreciation Holdback Receivable, credit reduces the invoice balance due now
- The customer pays ACV; the holdback shows as an asset on your balance sheet
- When work completes, submit documentation and invoice the holdback amount — debit AR, credit Insurance Claim Revenue, clear the Depreciation Holdback Receivable
- Run a monthly report on Depreciation Holdback Receivable balance — any job completed more than 45 days ago with a holdback balance needs a follow-up call
How to Record Insurance Supplements in QuickBooks
A supplement is a request to the insurance company for additional payment beyond the original estimate — covering items missed in the initial scope, code upgrades, material price increases, or additional labor discovered during work. In storm restoration, supplementing is standard practice and supplements can add 10–25% to the original claim value.
In QuickBooks, each approved supplement is a separate invoice to the same Project (job), under the same Insurance Claim Revenue income account. Never combine it with the original invoice — keeping it separate lets you see supplement revenue clearly in your job profitability report and track which adjuster/insurer approves supplements most readily.
QuickBooks Chart of Accounts for Insurance Restoration Work
A restoration contractor's chart of accounts needs these specific accounts that a generic setup won't have:
| Account Name | Type | Purpose |
|---|---|---|
| Insurance Claim Revenue | Income | All insurance claim payments — ACV, RCV, supplements |
| Retail Roofing Revenue | Income | Non-insurance cash or financed jobs |
| Depreciation Holdback Receivable | Other Current Asset | Withheld depreciation not yet released |
| Retainage Receivable | Other Current Asset | Retainage on commercial jobs |
| Materials — Shingles | Cost of Goods Sold | Shingle purchases allocated by job |
| Materials — Other | Cost of Goods Sold | Underlayment, flashing, fasteners, accessories |
| Subcontractor Labor | Cost of Goods Sold | 1099 subcontractor payments — separate from W-2 labor |
| Employee Labor — Field | Cost of Goods Sold | W-2 crew wages allocated to jobs |
| Permits & Disposal | Cost of Goods Sold | Permit fees and dumpster rental by job |
Full Accounting Workflow: One Insurance Job in QuickBooks
Here is the complete QuickBooks workflow for a single storm restoration job from claim approval to final collection:
- Create a Project for the job in QuickBooks (address + homeowner name). This is the job costing container — all transactions will be assigned here.
- Record the estimate: Create an invoice for the full RCV amount against Insurance Claim Revenue, assigned to the Project. Do not record it as income yet — it's an outstanding receivable.
- Record ACV payment received: Apply the ACV check to the invoice. The difference (depreciation holdback) remains as an open balance. Reclassify the open balance to Depreciation Holdback Receivable via a journal entry or credit memo — so AR shows zero and holdback receivable shows the withheld amount.
- Record job costs as work progresses: Enter every materials purchase, subcontractor bill, and labor allocation against the Project. This builds your real-time job cost as work happens.
- Record any approved supplements: Create a new invoice for each approved supplement, same Project, same Income account. Mark it outstanding until payment is received.
- Job completion documentation submitted: Note in QuickBooks (memo or custom field) the date completion docs were submitted to the insurer. This starts your 30-day follow-up clock for holdback release.
- Record RCV/holdback release: When the holdback payment arrives, create an invoice for the holdback amount, apply the payment, and clear the Depreciation Holdback Receivable account balance for this job.
- Run Project Profitability report: With all revenues (ACV + holdback + supplements) and all costs (materials + labor + subs) assigned to the Project, your job profitability report shows accurate gross margin for the entire job.
3 Most Common Insurance Accounting Errors in Restoration
| Error | What Goes Wrong | Fix |
|---|---|---|
| Recording only ACV as revenue | Job appears less profitable than it is. Holdback receivable doesn't exist in books. Never collected. | Invoice full RCV; track holdback in Depreciation Holdback Receivable asset account |
| Booking unapproved supplements as income | Revenue overstated. When supplements are reduced or denied, books need correction. P&L unreliable. | Record supplement revenue only when approved in writing by insurer |
| No job assignment for insurance payments | Insurance payments show as general income. Can't see profitability per job. Misses the entire benefit of job costing. | Assign every invoice and payment to its QuickBooks Project |
At JobCostBooks, insurance claim accounting is set up correctly from day one for every restoration contractor we onboard. The Depreciation Holdback Receivable account, supplement tracking, and job-level assignment are all part of standard onboarding — not an add-on. See our roofing bookkeeping services for full details.