A chart of accounts for custom home builders
The account list that makes margin visible.
Short answer: A builder chart of accounts separates cost of construction from overhead, keeps customer deposits, retainage and construction loans on the balance sheet, and holds spec homes as inventory until sale. Keep accounts few and use cost codes and projects for detail, so the same list works for every house.
Balance sheet
- Operating and escrow bank accounts
- Retainage receivable
- Spec homes in progress (inventory)
- Customer deposits (liability)
- Retainage payable
- Construction loans, one per loan
Income and costs
- Construction revenue, and change order revenue if you track it apart
- Cost of construction: materials, subcontractors, direct labor, permits and fees
- Overhead: office, vehicles, insurance, admin
Keep detail in cost codes
Do not add an account for every trade. Use cost codes for that.
Sources
Common questions
How many accounts do I need?
Fewer than you think. Detail belongs in cost codes and projects.
Should each spec home be its own account?
Usually a project, not an account. Some builders use a separate entity per spec, which your CPA can advise on.
Can you rebuild ours?
Yes, during setup.
Related
By John Mos, Founder. Updated . We do not give tax or legal advice. Please ask your CPA or attorney.
See where your margin goes, house by house.
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