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A chart of accounts built for a contractor.
85 accounts, numbered, with the direct-cost and overhead split done properly. Take it, change it, use it. There is no email box on this page.
QuickBooks offers you a chart built for a business that buys things and sells them off a shelf. You send people and material to a job site and hope the two add up to less than what the customer pays. That mismatch is why so many contractors have tidy-looking books that cannot answer a single useful question.
Assets
1000–1999What the business owns or is owed. The three that most contractor charts are missing entirely are retainage receivable, work in progress and a separate tax reserve.
| Code | Account |
|---|---|
| 1000 | Operating checking |
| 1010 | Payroll checkingSeparate account, so payroll money is never accidentally spent on anything else. |
| 1020 | Tax reserve savingsWhere withheld payroll tax and sales tax sit until remitted. Money held in trust should not share an account with money you own. |
| 1050 | Undeposited funds |
| 1100 | Accounts receivable |
| 1150 | Retainage receivableSplit from ordinary AR. It is not a late invoice and chasing it as one wastes time — it is earned money released on a contractual trigger. |
| 1200 | Work in progressCosts incurred on jobs not yet complete. Needed on anything running longer than a month. |
| 1250 | Costs in excess of billingsUnderbilling. You have done work you have not invoiced — you are financing the customer. |
| 1300 | Inventory — warehouse |
| 1310 | Inventory — truck stockWorth separating. Truck stock behaves differently from warehouse stock and disappears differently too. |
| 1400 | Prepaid insurance |
| 1410 | Prepaid expenses — other |
| 1500 | Vehicles |
| 1510 | Equipment and machinery |
| 1520 | Tools |
| 1530 | Leasehold improvements |
| 1590 | Accumulated depreciationContra-asset. |
Liabilities
2000–2999What the business owes. Payroll tax liabilities are broken out deliberately — these are the accounts that must clear to zero after every deposit, and a balance that never clears is the earliest warning sign in a contractor’s books.
| Code | Account |
|---|---|
| 2000 | Accounts payable |
| 2050 | Credit cards |
| 2100 | Accrued payroll |
| 2110 | Payroll taxes payable — federal withholdingTrust fund money. Never company money. |
| 2115 | Payroll taxes payable — FICA |
| 2120 | Payroll taxes payable — state |
| 2125 | Unemployment taxes payable |
| 2130 | Garnishments and withholdings payable |
| 2200 | Sales tax payableAlso collected on someone else’s behalf. Treat like payroll tax, not like revenue. |
| 2250 | Customer depositsA liability, not income. You owe work, not money — but you owe something. |
| 2260 | Billings in excess of costsOverbilling. The account that makes a bank balance look healthier than the business is. |
| 2300 | Retainage payableWhat you hold from your own subs. |
| 2400 | Line of credit |
| 2500 | Equipment loans |
| 2510 | Vehicle loans |
| 2600 | Long-term debt |
Equity
3000–3999The owner’s stake. Keep draws separate from wages — an owner who takes everything as a draw has no labour cost in the books, which makes every margin on every job wrong.
| Code | Account |
|---|---|
| 3000 | Owner’s capital / contributions |
| 3100 | Owner’s draw |
| 3200 | Retained earnings |
| 3300 | Distributions |
Income
4000–4999Split by the kind of work, not by customer. This is what lets you answer "which line of work actually pays" — a single Sales account can never answer it, no matter how good the rest of the books are.
| Code | Account |
|---|---|
| 4000 | Service and repair revenue |
| 4100 | Installation and replacement revenue |
| 4200 | Maintenance agreement revenueRecurring revenue is worth its own line — it is the number that most changes what the business is worth. |
| 4300 | New construction revenue |
| 4400 | Warranty revenue |
| 4500 | Equipment and material sales |
| 4900 | Discounts and allowancesContra-revenue. |
Direct costs (cost of goods sold)
5000–5999The test for every account in this block: would you have spent it if the job had not happened? If the answer is no, it belongs here. If yes, it belongs in overhead. This split is the whole reason the chart exists.
| Code | Account |
|---|---|
| 5000 | Direct labor — field wages |
| 5010 | Direct labor — payroll taxesBurden belongs with the wage, not in overhead. Separating them is what makes a job cost real. |
| 5020 | Direct labor — workers compensation |
| 5030 | Direct labor — benefits |
| 5100 | Materials |
| 5150 | Equipment purchased for jobs |
| 5200 | Subcontractors |
| 5300 | Permits and inspection fees |
| 5400 | Equipment rental — job specific |
| 5500 | Disposal and dumpster |
| 5600 | Job travel and freight |
| 5700 | Warranty and callback costsThe account almost nobody creates, and the one that quietly explains where a good-looking margin went. |
| 5800 | Small tools and consumables |
Overhead
6000–6999Everything you would still pay next month if no work came in. Keep it out of the 5000s at all costs — overhead misclassified as direct cost makes your margin look worse than it is, and direct cost buried in overhead makes it look better, which is the direction that does real damage.
| Code | Account |
|---|---|
| 6000 | Owner and officer compensationA real wage for the management work, separate from the draw. |
| 6010 | Office and administrative wages |
| 6020 | Payroll taxes — overhead staff |
| 6050 | Employee benefits — overhead staff |
| 6100 | Rent — shop and office |
| 6110 | Utilities |
| 6150 | Telephone and internet |
| 6200 | Insurance — general liability |
| 6210 | Insurance — vehicle |
| 6220 | Insurance — umbrella and other |
| 6300 | Vehicle — fuelNon-job driving. Fuel burned getting to a specific job is arguably a 5600. Pick one treatment and never change it. |
| 6310 | Vehicle — repairs and maintenance |
| 6320 | Vehicle — lease and depreciation |
| 6400 | Advertising and marketing |
| 6410 | Software and subscriptions |
| 6500 | Professional fees — legal |
| 6510 | Professional fees — accounting |
| 6600 | Licenses and permits — company |
| 6650 | Dues and memberships |
| 6700 | Training and certification |
| 6800 | Bank and merchant processing fees |
| 6850 | Bad debt |
| 6900 | Depreciation |
| 6950 | Office supplies |
Other income and expense
7000–7999Anything that is not the business doing its business. Keeping these out of the 4000s and 6000s stops a one-off equipment sale from looking like a good month.
| Code | Account |
|---|---|
| 7000 | Interest income |
| 7100 | Interest expense |
| 7200 | Gain or loss on disposal of assets |
| 7900 | Income tax expense |
Using it
The gaps in the numbering are deliberate. Every block leaves room to insert your own accounts without renumbering everything below them, which is the single most common thing missing from charts copied off a forum.
Do not adopt all 85 on day one. An account you never post to is worse than no account, because it makes the list long enough that people stop reading it and start guessing. Start with the 5000 and 6000 blocks — the direct-cost and overhead split is where nearly all the value is — and add the rest as the business genuinely needs them.
Whatever you decide about the awkward cases, decide once. A category that moves between buckets from year to year makes every year-on-year comparison meaningless, which costs more than getting the original call slightly wrong.
For the reasoning behind the structure, read why a contractor’s chart of accounts has to be different. For the terms in it, there is a glossary.
A chart is a container. The books are the work.
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