The chart of accounts is your QuickBooks infrastructure. Setting it up strategically is the difference between getting extremely meaningful information about your business and getting meaningless data.
You’d be surprised at how many companies don’t think strategically about the chart of accounts, even though it is the most important piece of the accounting framework. That’s why it’s important to set up your chart of accounts to reflect the unique needs of your business.
To organize your chart of accounts, use these three steps:
- 1.Think strategically – How do you want your chart of accounts to work? Consider your business, tax strategy and what information you need to make decisions for your business.
- 2.Keep it simple – Too much information is just confusing and overwhelming.
- 3.Purge – Do not keep accounts that you don’t understand, accounts that haven’t been used or accounts that have less than $1,000 in them.
As we tell our clients, QuickBooks Online and QuickBooks Enterprise provide great features, but using them straight out of the box doesn’t help your books tell the story it needs. To create a truly effective accounting effort, you need to customize your chart of accounts to the unique needs of the business.
- Need help optimizing your Chart of Accounts? Our services team excels at setting up, optimizing and training clients in this area. Contact us today. We’re happy to help.