Executive Overview

Proper financial record-keeping is the foundation of successful construction business management. This Chart of Accounts Template provides a comprehensive framework specifically designed for construction contractors to establish robust accounting processes, ensure accurate job costing, and optimize financial reporting capabilities.

Complete Chart of Accounts Structure

ASSETS

Current Assets (1000-1999)

Account #	Account Name	Description
Cash and Cash Equivalents
1000	Checking Account - Operating	Primary operating account for daily transactions
1010	Checking Account - Payroll	Dedicated payroll account
1020	Money Market Account	Short-term cash reserves
1030	Petty Cash	Small cash fund for minor expenses
Accounts Receivable
1100	Accounts Receivable - Trade	Outstanding invoices from completed work
1110	Accounts Receivable - Retention	Retention amounts held by customers
1120	Progress Billings	Amounts billed for work in progress
1130	Allowance for Doubtful Accounts	Reserve for potentially uncollectible accounts
Inventory and Job Costs
1200	Raw Materials Inventory	Construction materials on hand
1210	Work in Process	Costs accumulated on active jobs
1220	Job Materials	Materials allocated to specific jobs
1230	Small Tools and Supplies	Consumable tools and supplies
Other Current Assets
1300	Prepaid Insurance	Insurance premiums paid in advance
1310	Prepaid Expenses	Other expenses paid in advance
1320	Security Deposits	Refundable deposits paid to suppliers

Fixed Assets (2000-2999)

Account #	Account Name	Description
Equipment and Machinery
2000	Heavy Equipment	Excavators, bulldozers, cranes
2010	Accumulated Depreciation - Heavy Equipment	Depreciation reserve for heavy equipment
2020	Vehicles and Trucks	Company vehicles and delivery trucks
2030	Accumulated Depreciation - Vehicles	Depreciation reserve for vehicles
2040	Tools and Equipment	Power tools and smaller equipment
2050	Accumulated Depreciation - Tools	Depreciation reserve for tools
Buildings and Improvements
2100	Buildings	Office and warehouse buildings
2110	Accumulated Depreciation - Buildings	Depreciation reserve for buildings
2120	Land	Land owned by the company
2130	Leasehold Improvements	Improvements to leased properties

LIABILITIES

Current Liabilities (3000-3999)

Account #	Account Name	Description
Accounts Payable
3000	Accounts Payable - Trade	Amounts owed to suppliers and vendors
3010	Accounts Payable - Subcontractors	Amounts owed to subcontractors
3020	Accrued Expenses	Expenses incurred but not yet paid
Payroll Liabilities
3100	Wages Payable	Unpaid wages and salaries
3110	Payroll Tax Payable	Federal and state payroll taxes
3120	Workers Compensation Payable	Workers compensation premiums due
3130	Union Dues Payable	Union dues withheld from employees
Other Current Liabilities
3200	Sales Tax Payable	Sales tax collected but not remitted
3210	Customer Deposits	Advance payments from customers
3220	Current Portion Long-Term Debt	Principal due within one year

Long-Term Liabilities (4000-4999)

Account #	Account Name	Description
4000	Equipment Loans	Loans for equipment purchases
4010	Building Mortgage	Mortgage on company buildings
4020	Line of Credit	Revolving credit facility

EQUITY (5000-5999)

Account #	Account Name	Description
5000	Owner's Capital	Owner's investment in the business
5010	Owner's Draw	Owner withdrawals from the business
5020	Retained Earnings	Accumulated profits retained in business

REVENUE (6000-6999)

Account #	Account Name	Description
Construction Revenue
6000	Contract Revenue - Residential	Revenue from residential construction
6010	Contract Revenue - Commercial	Revenue from commercial construction
6020	Contract Revenue - Government	Revenue from government contracts
6030	Change Order Revenue	Additional revenue from change orders
6040	Service and Repair Revenue	Revenue from service calls and repairs
6050	Equipment Rental Revenue	Income from renting equipment

COST OF GOODS SOLD (7000-7999)

Account #	Account Name	Description
Direct Job Costs
7000	Direct Labor	Wages for workers directly on jobs
7010	Direct Labor Burden	Payroll taxes and benefits on direct labor
7020	Direct Materials	Materials used directly on jobs
7030	Subcontractor Costs	Payments to subcontractors
7040	Equipment Costs	Direct equipment costs for jobs
7050	Job Site Expenses	Permits, utilities, temporary facilities

OPERATING EXPENSES (8000-8999)

Account #	Account Name	Description
General and Administrative
8000	Officer Salaries	Salaries for company officers
8010	Office Salaries	Administrative staff salaries
8020	Rent Expense	Office and warehouse rent
8030	Utilities	Office utilities expenses
8040	Insurance - General Liability	General liability insurance
8050	Insurance - Workers Compensation	Workers compensation insurance
8060	Professional Fees	Accounting, legal, and consulting fees
8070	Office Supplies	Office supplies and materials
8080	Equipment Maintenance	Maintenance and repairs of equipment
8090	Fuel and Oil	Fuel and oil for equipment and vehicles
8100	Marketing and Advertising	Marketing and promotional expenses
8110	Travel and Entertainment	Business travel and entertainment
8120	Depreciation Expense	Depreciation of company assets
8130	Interest Expense	Interest on loans and credit facilities

Tax Considerations

Equipment Depreciation Schedules

Asset Type	MACRS Class	Recovery Period	Section 179 Eligible
Heavy Construction Equipment	5-Year	5 Years	Yes
Trucks and Vehicles	5-Year	5 Years	Yes (with limitations)
Office Equipment	7-Year	7 Years	Yes
Buildings	39-Year	39 Years	No

Job Cost Allocation Methods

• Percentage of Completion: Recognize revenue and expenses based on project completion percentage
• Completed Contract: Recognize revenue and expenses only upon project completion
• Job Costing: Track all direct costs (labor, materials, equipment) by individual jobs
• Overhead Allocation: Distribute indirect costs using predetermined rates based on direct labor hours or costs

Tax Planning Strategies

• Timing of equipment purchases to maximize depreciation benefits
• Strategic use of Section 179 and bonus depreciation
• Proper classification of repairs vs. improvements
• Cash vs. accrual accounting method selection
• Quarterly estimated tax payment planning

Financial Reporting Framework

Job Profitability Analysis

Cash Flow Management

Report Type	Frequency	Key Metrics
Cash Flow Forecast	Weekly	Projected receipts vs. disbursements
Aging Reports	Bi-weekly	A/R and A/P aging analysis
Job Cash Flow	Monthly	Cash flow by individual projects
Working Capital Analysis	Monthly	Current ratio and working capital trends

Industry Benchmarking Guidelines

• Gross Profit Margin: Target 15-25% depending on project type
• Current Ratio: Maintain above 1.2 for healthy liquidity
• Days in A/R: Target 45-60 days for optimal cash flow
• Equipment ROI: Target minimum 15-20% return on equipment investment
• Overhead Ratio: Keep general overhead below 10-15% of revenue

Implementation Guidelines and Best Practices

Phase 1: Setup and Configuration

1. Review and customize the chart of accounts for your specific business needs
2. Set up job costing structure with separate cost codes for each project
3. Configure accounting software with proper account classifications
4. Establish month-end closing procedures and schedules

Phase 2: Process Implementation

1. Train staff on proper account coding and job cost allocation
2. Implement daily and weekly reporting routines
3. Establish approval workflows for expenses and purchase orders
4. Set up automated bank reconciliation procedures

Phase 3: Monitoring and Optimization

1. Review financial reports weekly for accuracy and completeness
2. Conduct monthly job profitability analysis
3. Perform quarterly chart of accounts cleanup and maintenance
4. Annual review and update of account structure

Alliance Integration Benefits

Financial Optimization Services

• Benchmarking Reports: Compare your financial performance against industry averages and peer contractors
• KPI Dashboard: Real-time monitoring of critical financial metrics and trends
• Cash Flow Analysis: Advanced forecasting tools and credit line optimization
• Profitability Analytics: Detailed job costing analysis and margin improvement recommendations

Industry-Specific Accounting Support

• Specialized construction accounting expertise and consultation
• Tax planning and compliance assistance
• Financial statement preparation and review
• Audit preparation and support services

Technology Integration

• Seamless integration with leading construction management software
• Automated job costing and progress billing systems
• Mobile expense tracking and approval workflows
• Cloud-based financial reporting and analytics