🏭Industry Template

Chart of Accounts for Manufacturing

A complete Chart of Accounts designed for manufacturers, production facilities, and assembly operations. Learn the best practices for tracking inventory stages, production costs, and manufacturing overhead.

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Recommended Account Structure

This template includes 29 accounts organized by category. Each account is designed for manufacturing businesses.

Assets

1000CheckingBank

Primary business banking account for deposits and expenses

1010SavingsBank

Reserve funds and emergency cash

1100Accounts ReceivableA/R

Track unpaid customer invoices

1200Raw Materials InventoryOther Current Asset

Materials waiting to be used in production

1210Work in ProgressOther Current Asset

Partially completed products in production

1220Finished Goods InventoryOther Current Asset

Completed products ready for sale

1500Manufacturing EquipmentFixed Asset

Production machinery and equipment

1510Buildings & FacilitiesFixed Asset

Factory, warehouse, production facilities

Liabilities

2000Accounts PayableA/P

Track bills owed to suppliers and vendors

2100Credit CardCredit Card

Business credit card balance

2200Equipment LoansLong Term Liability

Financing for manufacturing equipment

2300Payroll LiabilitiesOther Current Liability

Wages, taxes, benefits owed

Equity

3000Owner's EquityEquity

Owner's investment in the business

3100Retained EarningsEquity

Accumulated profits from prior years

3200Owner's DrawEquity

Distributions to owner (reduces equity)

Income

4000Product SalesIncome

Revenue from finished goods sales

4100Custom ManufacturingIncome

Contract manufacturing for other companies

4200Royalty IncomeIncome

Licensing and royalty agreements

Cost of Goods Sold

5000Direct MaterialsCost of Goods Sold

Raw materials used in production

5100Direct LaborCost of Goods Sold

Wages for production workers

5200Manufacturing OverheadCost of Goods Sold

Indirect production costs, utilities, depreciation

5300Subcontract ManufacturingCost of Goods Sold

Outsourced production or component assembly

Expenses

6000Equipment MaintenanceExpense

Repairs and upkeep of production machinery

6100Quality ControlExpense

Testing, inspections, quality assurance

6200Research & DevelopmentExpense

Product development, prototypes, testing

6300Warehouse & StorageExpense

Storage facilities, material handling

6400Freight & ShippingExpense

Inbound materials and outbound finished goods

6500Insurance - ManufacturingExpense

Property, liability, product insurance

6600Utilities - ProductionExpense

Electricity, gas, water for manufacturing

Accounting Strategies for Manufacturing

Maximize the value of your Chart of Accounts with these proven strategies.

📦

Track Three Inventory Stages

Separate accounts for raw materials, work-in-progress, and finished goods give you visibility into where your capital is tied up and help identify production bottlenecks.

⚙️

Allocate Overhead Properly

Manufacturing overhead includes utilities, depreciation, and indirect labor. Allocate these costs to products accurately to understand true production costs and set profitable pricing.

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Separate Direct vs. Indirect Costs

Keep direct materials and labor in COGS, but track indirect costs like maintenance and R&D in operating expenses. This provides clearer gross margin calculations.

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Use Job Costing

For custom manufacturing or batch production, use QuickBooks® job costing to track materials, labor, and overhead per job or production run for accurate profitability analysis.

Best Practices

Implement perpetual inventory tracking to monitor stock levels and prevent production delays
Track equipment depreciation accurately for tax benefits and replacement planning
Review overhead allocation quarterly to ensure costs are distributed fairly across products
Use classes or departments to track costs by production line or facility
Set up reorder points for critical raw materials to avoid production stoppages

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