What is the NAHB Chart of Accounts?
If you are a builder or contractor, keeping your finances organized is a big part of running a successful business. Between tracking job costs, managing payroll, and keeping up with materials, it can be tough to make sense of the numbers. That’s where the NAHB Chart of Accounts can come in handy.
The NAHB, or the National Association of Home Builders, Chart of Accounts is simply a way for construction companies to organize their financial information. It is a detailed list of categories within your account that helps you track income, expenses, assets, and liabilities in a way that fits the construction industry.
Most industries use a general chart of accounts, but home building is different. You have to deal with job costing, subcontractors, change orders, warranty work, and much more. A regular accounting system might not be able to give you the full picture. The NAHB Chart of Accounts is designed to show how builders and remodelers actually operate.
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The Breakdown
The chart breaks your finances into categories that make sense specifically for the construction industry. Instead of just having a vague account for “Expenses,” it includes more specific sections like:
- Cost of Sales
- Indirect Construction Costs
- General and Administrative Expenses
- Marketing and Selling Expenses
Each of these categories can be broken down even further, depending on the size of your business and the level of detail you want to track. There can be many subgroups that can be categorized as well, like framing, electrical, plumbing, roofing, and so on. This can give you a clear view of how much each part of a job is really costing you, and where you might be able to improve.
Using The NAHB Chart of Accounts
By using this system, you can also create more accurate estimates, as well as manage budgets more effectively, and even prepare for tax season with less stress. Lenders and investors often prefer businesses that use standardized charts of accounts because it makes financial reports easier to understand and trust.
The NAHB Chart of Accounts also makes it easier to compare your numbers to industry benchmarks. Since many builders use this system, you can see how your business is doing compared to others of similar size or scope.
Let the Experts Guide You
Setting up this Chart of Accounts correctly can take a little time, but it is worth it. And that’s where a CPA who understands construction can make a big difference.
Cooper Norman has years of experience helping builders, contractors, and remodelers organize their books using the NAHB Chart of Accounts. They will help customize the chart to fit your specific business, making sure it works for the way you operate. Good accounting helps you plan ahead, avoid surprises, and grow with confidence. The NAHB Chart of Accounts is a great tool for that, and with the right support from Cooper Norman, accounting does not have to be complicated.
If you would like help setting up or improving your accounting system, Cooper Norman is ready to help. They understand construction, and they know how to turn financial data into something that works for your business. Contact us today to get started.
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