Josh Luebker
Fractional CFO · The Construction CFO
Former commercial construction PM and master electrician. 150+ projects, $300M+ total value. Fractional CFO for commercial subcontractors doing $1M–$12M. About Josh → | LinkedIn →
Most construction subcontractors are using a chart of accounts set up by someone who didn't understand construction. The result: financial statements that don't match how you estimate, job cost data that can't be used for variance analysis, and overhead rates that are wrong because indirect costs are miscategorized. The chart of accounts is the foundation. If it's wrong, everything built on top of it is wrong.
The chart of accounts defines how your financial system categorizes every dollar in and out of your business. Get it right and your P&L, job cost reports, and overhead rate all produce usable data. Get it wrong and you're managing by feel with a false sense of having a system.
Revenue accounts by work type, direct cost accounts by category (labor, material, subcontract, equipment), overhead accounts by cost type, and standard balance sheet accounts including WIP asset and liability accounts. The most important structural decision is cost code granularity — granular enough to produce useful variance data, not so granular it creates data entry burden.
The biggest difference is the job cost layer. A standard business categorizes expenses by type. A construction business categorizes by type AND by job. That second dimension — the job cost allocation — is what makes construction accounting complex. You also need WIP accounts (overbilling liability, underbilling asset) that don't exist in most small business setups.
Yes — with significant customization. QuickBooks Online can run a construction chart of accounts but its job costing functionality is limited. Most subcontractors outgrow QuickBooks for job costing between $2M and $5M in revenue. The chart of accounts structure works. The job-cost-to-estimate variance reporting doesn't.
Schedule a free call. We'll review your current structure and show you what it's hiding from you.
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