The foundation of any good accounting system is your chart of accounts (COA)
A proper accounts list will enable you to account for income and expenses accurately and will assist your accounting professionals to report on your financial health easily.
As a contractor, you know how important it is to have a plan or blueprint in your hands before you go to the construction site and begin work on the project. This same principle applies to using having a great Chart of Accounts for your business.
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Examples of services include carpentry, drywall hanging, HVAC, plumbing, masonry, stucco, welding, remodeling, electrical work, landscaping.
Since all of these services are usually put into one project, such as building a home or office building, it is best to just have one Construction income account, though it is possible to separate the services into smaller income accounts.
A contractor usually includes certain products with the construction service such as blueprints and construction materials, so it is important to have a Cost of Goods Sold account for products such as this. If your company rents equipment to other contractors or uses subcontractors on the job, create separate Cost of Goods Sold Accounts for these services as well.
Aside from the usual expense accounts, industry specific accounts that are common to contractors include business and building permits, outside labor expenses, and outside service expenses such as mobile restroom rental and catering services for employees.
We offer you to download a free PDF with QuickBooks chart of accounts for construction and general contractors.