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Chart of Accounts of a Construction Company

A chart of accounts (COA) is a vital financial tool for any construction company, as it provides an organized listing of all accounts used for recording transactions in the company’s general ledger. A well-structured COA helps ensure accurate and efficient financial reporting, tracking, and auditing, essential for maintaining compliance and assessing the company's financial health. For a construction company, the chart of accounts must reflect the unique nature of its operations, including project-based accounting, labor costs, materials, and subcontractor expenses. This article outlines a sample chart of accounts tailored for a construction business, detailing the key categories and accounts that help manage the financial complexities within the industry.

Before proceeding with the chart of accounts, it is important to understand the basics of the balance sheet and income statement for a clearer understanding.

A Balance Sheet is a financial statement that shows a company’s financial position at a specific point in time. It lists the company’s assets, liabilities, and equity, following the accounting equation:

Assets = Liabilities + Equity

  • Assets: Resources owned by the company (e.g., cash, inventory, property).
  • Liabilities: Obligations or debts the company owes to others (e.g., loans, accounts payable).
  • Equity: The residual interest in the assets after deducting liabilities (e.g., retained earnings, shareholders' capital).

The balance sheet helps assess a company's liquidity, financial health, and ability to meet its obligations.

A Profit and Loss (P&L) Account Statement, also known as the Income Statement, is a financial report that summarizes a company’s revenues, expenses, and profits or losses over a specific accounting period (monthly, quarterly, or annually). It reflects the company’s operational performance and profitability.

Key Components of the P&L Statement

  • Revenue (Sales): Income earned from business activities such as selling goods or services.
  • Cost of Goods Sold (COGS): Direct costs related to producing or delivering goods/services.
  • Gross Profit: Calculated as Revenue - COGS.
  • Operating Expenses: Indirect costs such as salaries, rent, utilities, and marketing expenses.
  • Operating Profit (EBIT): Gross Profit - Operating Expenses.
  • Other Income/Expenses: Includes interest, investment gains/losses, and non-operating items.
  • Net Profit (Net Income): Final profit after deducting all expenses, taxes, and interest.

The P&L statement helps stakeholders evaluate the company’s profitability, operational efficiency, and overall financial performance.

A brief description of each account category, followed by a sample chart of accounts for a construction company, is provided below.

Current Assets

Current Assets: Assets expected to be converted into cash, sold, or consumed within a year.

Financial Statement Normally
10000 Current Assets BS Debit
10100 Cash and Cash Equivalents BS Debit
10110 Bank Checking Account BS Debit
10111 Bank-A BS Debit
10112 Bank-B BS Debit
10130 Bank Savings Account BS Debit
10131 Bank-X BS Debit
10132 Bank-Y BS Debit
10140 Suspense Account BS Debit
10150 Cash in Hand BS Debit
10151 Bill.com Money in Clearing BS Debit
10152 Bill.com Money out Clearing BS Debit
10153 Expensify Clearing Account BS Debit
10200 Short Term Marketable Securities BS Debit
10210 STM Securities - AA BS Debit
10211 STM Securities - BB BS Debit
10300 Accounts Receivable BS Debit
10310 Accounts Receivable - Retention BS Debit
10311 Party-1 BS Debit
10312 Party-2 BS Debit
10330 Accounts Receivable - Trade BS Debit
10331 Party-1 BS Debit
10332 Party-2 BS Debit
10370 Allowance for Doubtful Debts BS Credit
10371 Debtor - ABC BS Credit
10372 Debtor - DEF BS Credit
10400 Inventory BS Debit
10410 Inventory - Construction WIP BS Debit
10411 Civil Works BS Debit
10412 Plumbing Works BS Debit
10413 Electricity Works BS Debit
10414 HVAC Works BS Debit
10420 Inventory - Finished Units BS Debit
10421 Villas BS Debit
10422 Shops BS Debit
10423 Buildings BS Debit
10424 Others BS Debit
10430 Inventory - General BS Debit
10431 Civil Works BS Debit
10432 Plumbing Works BS Debit
10433 Electricity Works BS Debit
10434 HVAC Works BS Debit
10450 Un-Categorized BS Debit
10500 Other Current Assets BS Debit
10510 Other Receivables BS Debit
10511 NNN BS Debit
10520 Prepayments BS Debit
10521 Insurance BS Debit
10522 Advances BS Debit

Non-Current (Fixed) Assets

Non-Current (Fixed) Assets: Long-term assets not easily converted into cash, used in operations.

Financial Statement Normally
20000 Long Term Assets BS Debit
20100 Long Term Marketable Securities BS Debit
20110 LTM Securities - AAA BS Debit
20120 LTM Securities - BBB BS Debit
20200 Property, Plant and Equipment BS Debit
20210 Land BS Debit
20211 Land - A BS Debit
20220 Building BS Debit
20221 Offce Building BS Debit
20222 Ware House BS Debit
20230 Accumulated Depreciation - Building BS Credit
20231 Acc. Depreciation - Offce Building BS Credit
20232 Acc. Depreciation - Ware House BS Credit
20240 Plant and Machinery BS Debit
20241 Batching Plant BS Debit
20242 Excavator BS Debit
20243 Crane BS Debit
20244 Dumpers BS Debit
20250 Accumulated Depreciation - P&M BS Credit
20251 Acc. Depreciation - Batching Plant BS Credit
20252 Acc. Depreciation - Excavator BS Credit
20253 Acc. Depreciation - Crane BS Credit
20254 Acc. Depreciation - Dumpers BS Credit
20260 Vehicles BS Debit
20261 Car BS Debit
20262 Van BS Debit
20263 Bus BS Debit
20270 Accumulated Depreciation - Vehicles BS Credit
20271 Acc. Depreciation - Car BS Credit
20272 Acc. Depreciation - Van BS Credit
20273 Acc. Depreciation - Bus BS Credit
20280 Office Furniture and Fixtures BS Debit
20281 Tables BS Debit
20282 Chairs BS Debit
20283 Air Conditioners BS Debit
20284 Paintings BS Debit
20290 Acc Depreciation - Office F&F BS Credit
20291 Acc. Depreciation - Tables BS Credit
20292 Acc. Depreciation - Chairs BS Credit
20293 Acc. Depreciation - Air Conditioners BS Credit
20294 Acc. Depreciation - Paintings BS Credit
20300 Office Equipment BS Debit
20301 Computers BS Debit
20302 Printers BS Debit
20303 Photo Copiers BS Debit
20310 Accumulated Depreciation - Office Equipment BS Credit
20311 Acc. Depreciation - Computers BS Credit
20312 Acc. Depreciation - Printers BS Credit
20313 Acc. Depreciation - Photo Copiers BS Credit
20320 Tools and Plants BS Debit
20321 Tools & Plants Civil Works BS Debit
20322 Tools & Plants Plumbing Works BS Debit
20323 Tools & Plants Electrical Works BS Debit
20324 Tools & Plants HVAC Works BS Debit
20325 Tools & Plants Misc Works BS Debit
20330 Accumulated Depreciation - Tools and Plants BS Credit
20331 Acc. Dep - Tools & Plants Civil Works BS Credit
20332 Acc. Dep - Tools & Plants Plumbing Works BS Credit
20333 Acc. Dep - Tools & Plants Electrical Works BS Credit
20334 Acc. Dep - Tools & Plants HVAC Works BS Credit
20335 Acc. Dep - Tools & Plants Misc Works BS Credit
20600 Intellectual Property BS Debit
20610 Intellectual Property - A BS Debit
20650 Acc Amortization - Intellectual Property BS Credit
20651 Acc Amortization - Intellectual Property - A BS Credit
20700 Goodwill BS Debit
20710 Goodwill BS Debit

Current Liabilities

Current Liabilities: Obligations due within one year or the company’s operating cycle, whichever is longer.

Financial Statement Normally
30000 Current Liabilities BS Credit
30100 Notes Payable BS Credit
30110 Notes Payable BS Credit
30200 Accounts Payable BS Credit
30210 Accounts Payable - Retention BS Credit
30211 Project - A BS Credit
30212 Project - B BS Credit
30220 Accounts Payable - Trade BS Credit
30221 Bill Card - Payable BS Credit
30222 Credit Card - Payable BS Credit
30400 Other Current Liabilities BS Credit
30410 Interest Payable BS Credit
30411 Interest Payable to Bank - A BS Credit
30420 Accrued Expenses BS Credit
30421 Utility Bills Payable BS Credit
30422 Salaries and Wages Payable BS Credit
30423 Expensify Card - Payable BS Credit
30450 Unearned Revenue BS Credit
30451 Project - X BS Credit
30460 Taxes Payable BS Credit
30461 Sales Tax Payable BS Credit
30462 Purchase Tax Payable BS Credit
30463 Payroll Tax Payable BS Credit
30464 Income Tax Payable BS Credit

Non-Current Liabilities

Non-Current Liabilities: Long-term obligations due after one year.

Financial Statement Normally
40000 Long Term Liabilities BS Credit
40100 Bonds BS Credit
40110 Bonds Payable - XXX BS Credit
40120 Bonds Payable - YYY BS Credit

Equity

Equity reflects the owners' or shareholders' claim on the company’s net assets and is often referred to as owners' equity or shareholders' equity in corporations.

Key Components of Equity

  • Capital (or Share Capital): The money invested by owners or shareholders in the business.
  • Retained Earnings: Profits earned and retained in the business after paying dividends.
Financial Statement Normally
50000 Equity BS Credit
50100 Capital BS Credit
50110 Equity - Opening Balance BS Credit
50120 Equity - Addition BS Credit
50130 Equity - Drawings BS Debit
50200 Retained Earnings BS Credit
50210 Retained Earnings - Opening Balance BS Credit
50220 Retained Earnings - Current Period BS Credit
50230 Retained Earnings - Distributed BS Debit

Revenue

Revenue in the income statement refers to the total income generated from a company’s core business operations during a specific accounting period. It represents the value of goods sold or services rendered before deducting any expenses. Revenue is also known as sales, turnover, or top-line income because it appears at the top of the income statement.

Types of Revenue

  • Operating Revenue
    • Generated from primary business activities.
    • Example: Sales of products or services.
  • Non-Operating Revenue
    • Earned from secondary or non-core business activities shown under the head of Other Income/(Loss) in the chart of accounts
    • Examples:
      • Interest Income
      • Dividend Income
      • Gains on Asset Sales
      • Foreign Exchange Gains
Financial Statement Normally
60000 Income P&L Credit
60100 Revenue from Construction Operations P&L Credit
60110 Revenue from Civil Works P&L Credit
60111 Project - A P&L Credit
60112 Project - B P&L Credit
60120 Revenue from Plumbing Works P&L Credit
60121 Project - A P&L Credit
60122 Project - B P&L Credit
60130 Revenue from Electricity Works P&L Credit
60131 Project - A P&L Credit
60132 Project - B P&L Credit
60140 Revenue from HVAC Works P&L Credit
60141 Project - A P&L Credit
60142 Project - B P&L Credit
60150 Revenue from Other Works P&L Credit
60151 Project - A P&L Credit
60152 Project - B P&L Credit
60210 Revenue from Sale of Villas P&L Credit
60211 Project - AA P&L Credit
60230 Revenue from Sales of Buildings P&L Credit
60231 Project - BB P&L Credit

Expenses

Expenses in the income statement represent the costs incurred by a company to generate revenue and operate its business during a specific accounting period. They are deducted from revenue to determine the company’s net profit or loss.

Types of Expenses

  • Operating Expenses:
    • Directly related to core business activities.
    • Examples:
      • Cost of Goods Sold (COGS) - direct costs associated with producing or purchasing goods sold by a company during a specific accounting period. It includes all expenses directly tied to the production of products or services, excluding indirect costs like marketing and administrative expenses.
      • Components of COGS:
        • Direct Materials: Raw materials used in production.
        • Direct Labor: Wages of employees involved in manufacturing.
        • Manufacturing Overhead: Costs like utilities, factory rent, and equipment depreciation.
Financial Statement Normally
70000 Costs of Sales P&L Debit
70100 Costs of Construction P&L Debit
70110 Direct Materials P&L Debit
70111 Materials for Civil Works P&L Debit
70112 Materials for Plumbing Works P&L Debit
70113 Materials for Electricity Works P&L Debit
70114 Materials for HVAC Works P&L Debit
70115 Materials for Other Works P&L Debit
70170 Direct Laboor P&L Debit
70171 Productive Labor - Civil P&L Debit
70172 Productive Labor - Plumbing P&L Debit
70173 Productive Labor - Electical P&L Debit
70174 Productive Labor - HVAC P&L Debit
70175 Productive Labor - Others P&L Debit
70180 Construction Over Heads P&L Debit
70181 Insurances P&L Debit
70182 Rent and Leases P&L Debit
70183 Repair and Maintenance P&L Debit
70184 Fuel and Lubricants P&L Debit
70185 Taxes and Licenses P&L Debit
70186 Depreciation P&L Debit

  • Non-Operating Expenses:

    • Not related to core operations shown under the head Other Income/(Loss) in the chart of accounts.
    • Examples:
      • Sales and Marketing
      • General and Administrative
      • Research and Development
      • Depreciation
      • Finance Cost
      • Losses from asset sales
      • Unusual or one-time charges
      • Foreign Exchange Losses

  • Taxes:

    • Corporate income taxes paid to the government.
Financial Statement Normally
80000 Expense P&L Debit
80200 Sales and Marketing P&L Debit
80210 Salaries and Wages P&L Debit
80211 Salaries P&L Debit
80212 Wages P&L Debit
80213 Benefits P&L Debit
80214 Pay Roll Taxes P&L Debit
80220 Advertisments and Publicity P&L Debit
80221 Google Ads P&L Debit
80222 Other Ads P&L Debit
80223 Sales Promotions P&L Debit
80224 Sales Commissions P&L Debit
80225 Gifts and Samples P&L Debit
80230 Travelling and Conveyance - Marekting P&L Debit
80231 Vehicle Running P&L Debit
80232 Traveling P&L Debit
80233 Conveyance P&L Debit
80234 Hotel Expenses P&L Debit
80250 Un-Categorized Marketing Expenses P&L Debit
80300 General and Administrative P&L Debit
80310 Salaries and Benefits P&L Debit
80311 Payroll Expenses P&L Debit
80312 Payroll Benefits P&L Debit
80313 Payroll Taxes - FICA, FUTA, SUTA P&L Debit
80314 Employees Insurance P&L Debit
80315 Retirement Benefits P&L Debit
80316 Recruitment Expenses P&L Debit
80330 Utilities P&L Debit
80331 Electriciy P&L Debit
80332 Sewerage P&L Debit
80333 Water P&L Debit
80334 Gas P&L Debit
80340 Office Rent, Lease and Taxes P&L Debit
80341 Office Rent P&L Debit
80342 Office Lease P&L Debit
80343 Property Tax P&L Debit
80350 Travelling and Conveyance - Admin P&L Debit
80351 Vehicle Running P&L Debit
80352 Traveling P&L Debit
80353 Conveyance P&L Debit
80354 Hotel Expenses P&L Debit
80355 Vehicle Registrations P&L Debit
80356 Vehicle Licenses P&L Debit
80360 Repairs and Maintenance P&L Debit
80361 Vehicles P&L Debit
80362 Office Premises P&L Debit
80363 Office Equipment P&L Debit
80370 Insurance P&L Debit
80371 Office Building P&L Debit
80372 Vehicles P&L Debit
80380 Postage and Telecommunication P&L Debit
80381 Telephone and Internet P&L Debit
80382 Postage P&L Debit
80390 Printing and Stationery P&L Debit
80391 Office Supplies P&L Debit
80392 Stationery P&L Debit
80400 Entertainment P&L Debit
80410 Legal and Professional P&L Debit
80411 Audit and Accountancy Fees P&L Debit
80412 Consultancy Fees P&L Debit
80413 Legal Charges P&L Debit
80414 Managment Soft Wares P&L Debit
80415 Trainings Costs P&L Debit
80430 Fee and Subscriptions P&L Debit
80440 Charity P&L Debit
80441 Donations P&L Debit
80442 Sponsership P&L Debit
80450 Un-categorized Expenses P&L Debit
80460 Suspense Account P&L Debit
80470 Research and Development P&L Debit
80500 Depreciation P&L Debit
80510 Depreciation P&L Debit
80511 Depreciation - Property P&L Debit
80512 Depreciation - Vehicles P&L Debit
80513 Depreciation - Equipment P&L Debit
80550 Amortization P&L Debit
80551 Amortization - Intellectual Property P&L Debit
80600 Finance Costs P&L Debit
80610 Interest Expense P&L Debit
80611 Interest on Loans P&L Debit
80612 Interest on Credit Cards P&L Debit
80620 Bank Charges and Fee P&L Debit
80621 Bank - 1 P&L Debit
80630 Currency Charges P&L Debit
80631 Bank - 1 P&L Debit
80632 Bank - 2 P&L Debit
90000 Other Income/(Loss) P&L Credit
90100 Other Income /(Loss) P&L Credit
90110 Gain on Sale of Assets P&L Credit
90920 Interest Income P&L Credit
90930 Dividend Income P&L Credit
90940 Foreign Exchange Gains P&L Credit
90950 Loss on Sale of Assets P&L Debit
90960 Unusual or one-time charges P&L Debit
90970 Foreign Exchange Losses P&L Debit
100000 Income Tax P&L Debit
100100 Income Tax P&L Debit
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