Chart of Accounts
Tips & Advice to help you make your decision on Chart of Accounts
One of the key factors in running an organized business is to keep accurate records of your expenses, customers and products. You can keep track of this with a chart of accounts. Business.com offers a great guide for finding companies that offer programs for getting set up with this.
A chart of accounts is simply a list of all accounts used by an organization or a business. The list can appear in many formats, such as numerical, alphabetic, or alpha-numeric. Also, a well organized chart should be structured with headings of accounts that aid a in consistent posting of transactions. Working with a company who understands the basics, as well as the more complex aspects, is important.
Good record keeping will also help you during tax season, when you need to look back and know exactly what transactions you made. You can keep track on how your employees are allocating funds as well.
There are so many options at prices for every budget that you are sure to find just what will work for you. Business.com has a great list that simplifies the search process. Look though the list of resources on the left to find the company that has the services you want.
Chart of Accounts
Keep business financial accounts in order by properly setting up a chart of accountsBy Sue-Lynn Carty A business chart of accounts is the same as an accounting chart of accounts, they are both an organized list of all the accounts in the general ledger. To allow for easy identification, most accountants assign specific first digits to help identify the type of account. This step isn't required, but doing so makes organizing, adding and tracking all the accounts in a standard chart of accounts more efficient because they are so easily identifiable. This level of detail becomes increasingly important as the number of accounts listed grows.
The number of accounts listed in a chart of accounts is dependent upon the size of the company and the industry in which the company does business. The following is a typical sample chart of accounts list.
1. Current Assets chart of accounting includes all assets such as, cash, accounts receivable, inventory and supplies.
2. Property, Plant and Equipment chart of accounts give title to all land, equipment, buildings and vehicles the company owns or leases. This chart of accounts listing must also include all respective accumulated depreciation.
3. Liabilities and Owner's Equity chart of accounts includes all payable accounts, long and short-term liabilities, common stock, retained earnings and stockholder's equity.
Begin building your business chart of accounts with a rough draft
Before making any permanent entries into the permanent chart of accounts, make a rough list of accounts and assign numbers to them.
Try: Look at a sample chart of account at Learning Link Finders, Inc. and The Entrepreneur Network to see what your business chart of account should look like.
Allow room to add new charts of accounts in the future
The chart of accounts list grows as your business grows. Leaving enough space between different accounts makes it easier to add the new accounts into your accounting software program.
Try: Use Peachtree Premium Accounting software from Sage Software and Quickbook financial software by Intuit Inc. makes organizing the chart of accounts for your business easy.
Make the chart of accounts list as detailed as possible
The more detail you have in your chart of accounts list, the easier and faster it is to track each account. Assign a specific first digit to all major accounts and then, break it down further by making charts of accounts for each individual department within the company.
Try: Buy industry specific chart of account software from Inphinet Interactions Communications, Inc. and Tech Target.
- Keep the financial accounts of your business up to date by regularly maintaining and updating the information in the chart of accounts. In order to ensure that bookkeeping chart of accounts is up to date, enter all financial transactions on a daily basis.
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