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Can you help with a category question?

We have a general contracting construction business. When we input our banking transactions, what category do we put our job materials that we charge the clients for on each job? We have them as cost of goods sold, but we don't think that's correct. Can you please help? Thanks~

1 reply

Apr 30, 2020

If the materials are being installed in the building, either installed by you or a subcontractor, and you are billing the customer for them, you can categorize them as cost of goods sold. If the purchase is for tools or equipment, things you use on the job but do not get installed into the building, then it would be an expense. You could categorize it as a non-direct expense if you are tracking that.

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