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A practical construction chart of accounts
A useful construction chart of accounts helps the owner distinguish job spending from the cost of running the business. Design the account list around the reports you need to read, then keep project detail consistent underneath it.
This guide describes common bookkeeping practice, not a legal or regulatory requirement.
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General information, not legal or tax advice.
Choose account groups people can recognize
QuickBooks describes the chart of accounts as the company’s account list and balances, including assets, liabilities, income and expenses. As a practical starting point, use plain names for materials, subcontractor costs, field labor and office spending so staff do not need to interpret vague labels.
Sources: QuickBooks Online support: Chart of accounts in QuickBooks Online
Separate the job from the kind of cost
Consider using the same material expense account across jobs while tracking the project separately. That lets an owner compare total material spending without creating a new account for every contract. Discuss which costs belong directly to jobs and which belong in overhead with the person reviewing your financial statements.
Use reporting dimensions deliberately
Intuit’s setup guidance describes classes for business segments and locations for offices or regions. Decide what each dimension means before importing transactions. Avoid using a class sometimes for a crew and sometimes for a customer, because the resulting report becomes difficult to interpret.
Keep numbering and subaccounts manageable
Account numbers are optional in QuickBooks. Choose them only when they make the list easier for your team and accountant to use. Intuit also describes locking a parent account to direct postings to subaccounts; review that setting when a summary account keeps collecting miscellaneous entries.
Sources: QuickBooks Online support: Chart of accounts in QuickBooks Online
Review the mapping before changing old records
Test a proposed account list against recent bills and the reports the owner uses. Keep a written mapping of old labels to new ones and ask your CPA to review advanced accounting decisions. Intuit advises using advanced accounting activities with an accountant’s help.
Sources: QuickBooks Online support: Advanced accounting topic
Sources: account organization
Make job costs easier to follow
Tidwell helps organize construction books and QuickBooks categories, with accounting decisions reviewed alongside your CPA.