Many plumbing, heating, and HVAC companies grow past a million dollars in sales with the same three or four income accounts they started with. The money is coming in, but the books can’t say where it comes from or what it costs to earn.
The fix starts with the chart of accounts: the list of categories every transaction is sorted into. Here is a sample built for a service company, and why each part matters.
Income: split by type of work
One “Sales” account tells you how much came in. Separate accounts tell you which work brought it in.
| Income account | What goes in it |
|---|---|
| Installations | New equipment, replacements, new construction work |
| Service and repair | Service calls, repairs, emergency calls |
| Maintenance agreements | Tune-ups and service plans |
| Other income | Anything that doesn’t fit above |
Use the types of work your company actually does. Four to six income accounts are usually enough.
Residential or commercial: use classes, not more accounts
Many companies also want to know whether homeowners or commercial customers bring in more. Instead of doubling every income account, QuickBooks Online can tag each sale with a class, such as Residential or Commercial. Class tracking is available in QuickBooks Online Plus and Advanced.
Classes cut across the whole profit and loss. One report can then show installs, service, and maintenance for residential and commercial work side by side.
Cost of goods sold: what it costs to do the work
These are the costs that rise and fall with the work itself. Keeping them apart from overhead is what lets you see your gross profit.
| Cost of goods sold account | What goes in it |
|---|---|
| Materials and parts | Equipment, fittings, pipe, parts bought for jobs |
| Direct labor | Technicians’ wages for time on jobs |
| Payroll taxes on direct labor | The employer share that goes with those wages |
| Subcontractors | Electricians, excavation, and other trades you hire |
| Permits and job fees | Permits, inspections, disposal fees for specific jobs |
| Equipment rental | Lifts and tools rented for a job |
Overhead: the cost of running the company
These costs stay about the same whether it’s a busy week or a slow one.
| Overhead account | What goes in it |
|---|---|
| Vehicles | Fuel, repairs, registration, insurance for the trucks |
| Tools and small equipment | Tools that aren’t tied to one job |
| Insurance | General liability, workers’ compensation |
| Office wages | Dispatch, office, and admin staff |
| Rent and utilities | Shop, office, storage |
| Software and phones | Your field service software, QuickBooks, phones |
| Advertising | Website, ads, truck lettering |
| Professional fees | Bookkeeping, tax preparation, legal |
| Licenses and dues | Company licenses, trade associations |
| Bank and card fees | Merchant fees on card payments |
One note on trucks: a truck loan payment is split in two. The interest is an expense; the rest pays down the loan, which sits on the balance sheet, not the profit and loss.
Why it’s worth doing right
A chart of accounts like this takes real work to set up, and a cleanup if the old categories were mixed together. Keeping it right takes steady work every month: each transaction checked and sorted, new vendors and new kinds of work put in the right place, and every account reconciled. Done well, the monthly reports start answering real questions: which work paid, and what it cost.
Frequently asked questions
Yes, but older transactions stay where they were unless they’re moved. It’s usually worth recategorizing the current year so the comparisons make sense.
If an account rarely has anything in it, or nobody looks at it, it’s probably one too many. The goal is reports you can read in a few minutes.
No. This sample is a starting point; the right version follows how your company actually earns and spends.
Start with a conversation
If you run a growing plumbing, heating, or HVAC company and your reports don’t tell you which work makes money, request a free consultation. Prefer to call? 781-924-1489.