DEFINITIVE CHART OF ACCOUNTS

We have included a well organized chart of accounts for you to examine. Please note that a good accounting software program, such as Total Office Manager (TOM) will allows you to further organize this chart of accounts by department. This might include service HVAC, Service Plumbing, Installation HVAC, Installation Plumbing, HVAC New Construction, Plumbing New Construction, Maintenance, etc.

Account Number	Account Name	Account Type	Definition of Account
102	Cash in Bank: Operating Acct.	Bank	Regular checking account.
103	Cash in Bank: Payroll Account	Bank	Special account used for payroll
104	Cash in Bank: Savings	Bank	Company’s savings account.
110	Accounts Receivable	Current Asset	Only “Trade” accounts receivable. Includes only those resulting from a sale or other billing to a customer for work done or for materials furnished by the company.
113	Employees Receivable	Current Assets	Amounts receivable from non-officer employees of the company.
114	Notes Receivables	Other Current Assets	All notes and loans receivable from other companies or individuals. Portion that us due within the next twelve months.
120	Prepaid Interest	Current Assets	Interest applicable to installment loans, or interest paid for a future period of operation.
121	Prepaid Insurance	Current Assets	Active insurance premiums related to a future period of operation.
122	Prepaid Commissions	Current Assets	Any draw by salesmen against future commissions.
123	Prepaid Expenses: Taxes	Current Assets	Taxes paid in advance that will be expended during a future period of operation.
124	Prepaid Expenses: Other	Current Assets	Any other prepaid expense of the company.
125	Earnings in Excess of Work in Progress	Current Assets	Difference between calculated earnings and actual billings on work in process where earnings exceed billings.
135	Inventory	Current Assets	All merchandise in stock. This account should not include the value of any merchandise for which invoices have not been received or any merchandise which has been taken to the job site.
140	Building	Fixed Asset	The base value (cost) of any building that is owned by the company (plus or minus any adjustments).
141	Office Furniture & Equipment	Fixed Asset	The base value of all office furniture and equipment owned by the company.
142	Machinery & Equipment	Fixed Asset	The base value of all machinery and equipment owned by the company.
143	Autos & Trucks	Fixed Asset	The base value of all autos and trucks owned by the company.
145	Leasehold Improvements	Fixed Asset	The value (cost) of any improvements made to based facilities.
149	Land	Fixed Asset	The value (cost) of land owned by the company.
150 to 155	Accumulated Depreciation	Fixed Asset	Sum total of all accumulated depreciation of fixed assets.
156 to 159	Amortization-Leasehold Improvements	Fixed Asset	The accumulated amortization of the leasehold improvements to facilities rented or leased by the company.
160	Cash Surrender Value- Officer’s Life Insurance	Fixed Asset	The current cash surrender value of any life insurance policies on officers owned by the company.
161	Deposits on Bids	Other Assets	Refundable deposits made on job bids.
162	Deposits on Utilities	Other Assets	Refundable deposits made for utilities services.
200	Accounts Payable	Current Liabilities	All trade accounts payable. This account should not include any other payables, such as notes or taxes.
202	Notes Payable-Current Portion	Current Liabilities	Total amount of payments to be made in the next twelve months on all notes and loans owed by the company.
206	Sales Tax Payable	Current Liabilities	Sum total of all sales tax due to State, City and other governmental units, detailed by individual taxing authority.
208	Unemployment Taxes	Current Liabilities	The amount of State and Fed. Unemployment Taxes due.
210	FICA Payable	Current Liabilities	The amount of employee’s withheld and employer’s contributed F.I.C.A. payable to the Federal government.
212	Federal Withholding Taxes Payable	Current Liabilities	The amount of income tax withheld from employees’ earnings and payable to the Federal government.
214	State Withholding Taxes Payable	Current Liabilities	The amount of State income tax withheld from employees’ earnings and payable to the State government.
218	Corporate Income Taxes Payable	Current Liabilities	The amount of Federal and State income taxes owed by the company.
220	Other Taxes Payable	Current Liabilities	Any other taxes owed by the company for which the tax bill has been rendered.
222	Accrued Salaries & Wages	Current Liabilities	All Salaries and wages earned by employees and not yet paid by the company.
225	Billings in Excess of Work in Progress	Other Current Liabilities	Over-billed. The difference between calculated earnings and actual billings on work in process where earnings on Incomplete billings exceed earnings.
226	Reserve for Start-Up Warranty Service	Other Current Liabilities	The amount of income withheld from sales & to cover start-up expenses and warranty service on completed jobs.
229	Reserve for Service Contracts	Other Current Liabilities	Amount of income not yet recognized on existing service and maintenance contracts. Check with your state for details on rules and regulations.
250	Notes Payable	Long Term Liabilities	The sum total of all notes owed by the company detailed by each individual note.
251	Less Current Portion	Current Liability	Total amount of payments to be made in the next twelve months on all notes owed by the company. (This is a contra-account to #250).
300	Capital Stock	Liabilities and Equity	The base value of stock issued by a corporation.
308	Paid-In Capital	Liabilities and Equity	The premium (above par or stated value) paid to the company by purchasers of capital Stock.
310	Retained Earnings	Liabilities and Equity	The amount of after-tax profits retained to date by a corporation.
401	Service MESO	Income	All service related materials, equipment, sub-contracting, and other related sales.
403	Service Labor	Income	All service related labor sales.
405	Installation MESO	Income	All installation and replacement materials, equipment, sub-contractors, and other related income.
407	Installation Labor	Income	All installation and replacement labor sales.
412	Agreement MESO	Income	All maintenance and service agreement materials, equipment, sub-contractor, and other sales.
415	Agreement Labor	Income	All maintenance and service agreement labor sales.
450	Sales Discounts or Allowances	Income	Any adjustment, discount, allowance, rebate or other reduction in a billing to a customer which results in a satisfactory settling of that customer’s account.
501	Service MESO	Direct Expense	All service related materials, equipment, sub-contracting, and other related direct expenses.
505	Service Labor	Direct Expense	All service related labor.
510	Installation MESO.	Direct Expense	All installation and replacement materials, equipment, sub-contractors, and other related direct expenses. This generally does not include payroll taxes and workman’s compensation.
520	Installation Labor.	Direct Expense	All installation and replacement labor direct expenses.
523	Agreement MESO	Direct Expense	All maintenance and service agreement materials, equipment, sub-contractor, and other sales.
	Agreement Labor	Direct Expense	All maintenance and service agreement labor sales.
540	Direct Other Costs	Direct Expense	The cost of permits, bonds, etc. incurred on specific jobs.
600	Advertising and Marketing	Expense	The company’s net expense for all advertising and sales promotion, including yellow pages, advertising exchange for a donation, signs and trucks lettering.
604	Auto & Truck-Gas & Oil	Expense	The total cost of auto and truck gasoline, diesel or other fuels, and oil.
608	Auto & Truck-Repairs & Maintenance	Expense	The total cost of all auto and truck repairs, maintenance (tires, batteries, etc.), tolls and inspection fees, not including insurance and license tap.
612	Bad Debts	Expense	The uncollectible accounts of the company or the current period allowance for doubtful accounts. If you use and allowance for doubtful accounts, a debit in this account will require an equal credit in the allowance for doubtful accounts. Otherwise, the credit would be made directly to the accounts receivable account in the event that particular accounts are found to be uncollectible.
616	Communications	Expense	Telephone, long distance charges, pager, two-way radio, etc.
620	Customer Relations	Expense	Invoice adjustments, give backs, unplanned discounts, etc.
624	Data Processing	Expense	Computer related expenses and repairs. Not for equipment purchase or lease expenses or payments.
628	Equipment Expense	Expense	The cost of operating, maintaining, repairing transporting or otherwise supporting all pieces of heavy machinery. Excludes insurance and depreciation.
632	Freight and postage	Expense	All freight and postage which cannot be readily charged to a specific job. Not to include advertising direct mail postage.
	Insurance: Auto and Truck	Expense	The company’s net expense for any automotive insurance program in effect.
	Insurance: Building and Equipment	Expense	The company’s net expense for equipment and property insurance program in effect (other than what is already covered herein).
636	Insurance: Health and Group	Expense	The company’s net expense for any health or other group insurance program in effect.
640	Insurance: Worker’s Compensation	Expense	The net cost of the company for premiums on its worker’s compensation insurance policy. This expense is usually calculated on total payroll.
644	Insurance: General Liability	Expense	The net cost of the company for premiums on its general liability insurance policy. This expense is usually calculated on total sales.
648	Interest & Bank Charges	Expense	The total amount of interest paid on loans, notes and mortgages owed by the company, and any activity charges levied by the bank.
620	Miscellaneous	Expense	All company expenses which correctly cannot be charged to one of the other expense accounts.
624	Office Expense	Expense	All stationery, postage, office equipment rental, and other office expenses.
628	Payroll Taxes	Expense	The company’s expense for F.I.C.A. contributions and State and Federal unemployment compensation insurance.
632	Sales Commissions	Expense	All salesmen’s earnings which are paid based on activity or volume of sales, gross profits, etc.
636	Shop Supplies & Small Tools	Expense	All expenses for supplies used in the shop and for any small tools furnished by the company (generally tools costing less than $100).
640	Travel & Entertainment	Expense	All company expenses for travel and entertainment except those relating directly to the sales effort, which should be charged to advertising and promotion (Account # 600).
644	Unapplied Labor	Expense	The amount paid to the direct labor force but which is not charged to jobs.
648	Unapplied Materials	Expense	The expense of any materials for which the company pays that are neither on hand nor have been charged to jobs by the end of the period. This account normally reflects that difference (debit or credit) between the book inventory value and the actual inventory value found when a physical inventory is taken.
652	Vacation, Holiday & Bonus Pay	Expense	All wages or payments made to hourly productive personnel for vacations, holidays, sick pay, jury duty, bonuses or other instances where normal job performance is not expected.
656	Contributions	Expense	Any donations to recognized as charitable causes. This account should not include any expense for which the company will receive advertising benefit.
660	Data Processing	Expense	The company’s cost for any computerization of its systems, whether in-house or by outside agents. Excludes machine depreciation.
666	Salaries - Office	Expense	The salaries and wages paid to clerical employees.
670	Salaries - Officer	Expense	The salaries of the officers of the corporation.
676	Depreciation	Expense	The depreciation and amortization of the current period for all fixed assets of the company.
680	Dues & Subscriptions	Expense	The total expense for subscriptions, trade association dues, and other business related expense for dues and subscriptions, including Dodge Reports, etc.
684	Employee Benefits	Expense	The cost of any company sponsored employee benefit plans, such as medical reimbursement, education, legal fees, counseling services, etc.
688	Legal & Professional	Expense	All legal, collection, accounting consulting and other professional fees incurred by the company.
692	Licenses and Taxes	Expense	All occupational licenses, competency certificate fees, tangible and intangible taxes, vehicle tags, corporate registration fees, sales and other miscellaneous taxes incurred and paid for by the company.
674	Repairs & Maintenance	Expense	The company’s cost of repairing and maintaining company facilities.
676	Rent	Expense	The expense for rent of any facilities used by the company or any special equipment rental not charged to another account.
682	Salaries: Sales and Estimating	Expense	All salaries wages paid to salesmen, engineers, estimators, and other such employees.
684	Salaries: Managerial/ Supervisory	Expense	All salaries and wages paid to superintendents, department heads, and other supervisory personnel whose time cannot be charged to jobs.
692	Salaries - Warehouse	Expense	The salaries and wages of all warehouse and delivery Personnel.
696	Utilities	Expense	The company’s expense for heat, lights, water, sewer, trash or other utilities. This account excludes telephone expenses.
800	Purchase Discounts	Other Income	Income realized as a result of cash discounts for early payment or other discounts granted by vendors.
810	Interest Income	Other Income	The amount of income received from interest collected on any loans, notes, or mortgages owed to the company.
820	Miscellaneous Income	Other Income	Any non-sales income received by the company except for purchase discounts and interest income.
830	Other Expense	Other Expense	All non-operating expenses incurred by the company.
840	Gain (Loss) On Disposition Of Fixed Assets	Other Income/ Expenses	The net amount of taxable gain or loss to the company from the sale, exchange, abandonment or involuntary conversion of fixed assets