CONSTRUCTION CHART OF ACCOUNTS FOR SUBCONTRACTORS.
A construction specific chart of accounts separates true cost of goods sold, meaning direct labor, materials, equipment, and subcontracted work, from overhead, and it includes the WIP accounts that percentage of completion accounting requires: costs in excess of billings and billings in excess of costs. A generic small business chart of accounts has neither distinction built in.
The chart of accounts is the foundation everything else in the financial system sits on, which is why getting it wrong is expensive to discover later. A generic chart built for a retail or service business doesn't separate direct job cost from overhead the way construction accounting needs, and it has nowhere to put the WIP entries. So the WIP position either doesn't get tracked in the accounting system at all, or it gets rebuilt manually outside the system every month. Structuring the chart correctly is what makes accurate job costing and WIP reporting possible in the first place.
WHAT IT MEANS.
A construction chart of accounts is the account structure that separates true cost of goods sold from overhead and carries the WIP accounts percentage of completion accounting requires.
WHERE IT GOES WRONG.
Assuming the software template is enough
The chart that comes with your accounting software was built for general small businesses rather than for construction. It typically doesn't separate true job cost from overhead correctly, and it doesn't include the WIP accounts that percentage of completion accounting requires. It will produce a clean looking P&L that can't answer whether a job made money.
Tracking WIP in a spreadsheet outside the books
Tracking the WIP position outside the accounting system creates a reconciliation risk between the spreadsheet and the financial statements. The two drift apart, and then nobody can say which one is right. Building the WIP accounts into the chart keeps both in sync by construction rather than by somebody remembering to tie them out every month.
Treating blended overhead as a minor issue
It's not minor. Blended overhead and job cost is one of the most common reasons gross margin looks inconsistent from job to job in ways that have nothing to do with how the jobs performed. Once overhead is mixed into COGS, both the job margin and the overhead rate are wrong, and every estimate built off them inherits the error.
THE TWO DISTINCTIONS THAT DO THE WORK.
True cost of goods sold for a subcontractor is direct labor, materials, equipment costs tied to a specific job, and subcontracted work. Those are the costs job costing and gross margin depend on being isolated cleanly from general overhead. Overhead, meaning office staff, general admin, and equipment not tied to a specific job, sits in its own category so it doesn't distort job level gross margin, and so it can be allocated to jobs deliberately rather than blended into COGS by accident.
Percentage of completion accounting requires two balance sheet accounts most generic charts don't include: costs and estimated earnings in excess of billings, which represents underbilling, and billings in excess of costs and estimated earnings, which represents overbilling. Without those accounts built into the chart, the WIP position either doesn't get tracked in the accounting system or it gets rebuilt outside it every month. Both routes risk a WIP schedule that won't reconcile to the financial statements.
THE OUTPUTS, NAMED.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
FREQUENTLY ASKED.
