Why Most Contractors Have a Broken Chart of Accounts (And How to Fix It)

Believe it or not, the biggest profit leaks in construction come from something deceptively simple: the chart of accounts.

If your COA doesn’t follow NAHB construction accounting structure, your job costing and reporting will always be wrong — no matter how hard you work.

This is where a controller steps in.

 

The Pain Points

Contractors usually suffer from:

• Lumped-together job costs
   
• No clear separation between direct & indirect costs
   
• Confusing overhead accounts
   
• Margins that swing violently
   
• Job costing that doesn’t match QBO
   
• Field costs not syncing to accounting
   

If your COA is generic, your numbers are generic — and generic numbers hurt you.

 

What a Proper Construction COA Should Look Like

Aligned to NAHB best practices, your COA should clearly track:

1. Revenue

• New construction
   
• Remodels
   
• Service work
   
• Insurance work
   

2. Direct Costs

• Labor
   
• Subs
   
• Materials
   
• Equipment
   
• Permits
   
• Dumpster / cleanup
   

3. Indirect Job Costs

• Field supervision
   
• Small tools
   
• Safety equipment
   
• Mobile device plans
   
• Fuel & mileage
   

4. Overhead

• Office
   
• Admin
   
• Sales
   
• Marketing
   
• Finance
   

5. Cost Codes
These sync with job costing software to give you:

• Clear margins
   
• Accurate WIP
   
• Faster billing
   
• Better decision-making
   

 

The Fix — A Controller-Designed COA That Actually Works

We rebuild your entire chart of accounts to match:

• NAHB construction accounting standards
   
• Your revenue streams
   
• Your project mix (GC, subs, custom, commercial, etc.)
   
• Your software stack
   

This gives you:
✓ Accurate job profitability
✓ Real WIP reports
✓ Consistent margins
✓ Clean dashboards
✓ Better pricing decisions

 

The Services that Support This

We provide:

• COA rebuild
   
• Job costing setup
   
• Construction-specific QBO optimization
   
• Cost code mapping
   
• Field → office workflow design
   
• Controller-level reporting
   

This is numbers that act like scaffolding — strong enough to build on.

 

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