Your Chart of Accounts

Does your chart of accounts help you make decisions for your business? Is there enough detail in your cost tracking to know where you’re spending your money, and a way to summarize the detail if you care to look at a higher-level view of what’s going on with your business?

If the answer is no, but you want it to be yes, make a new year’s resolution to better organize the chart of accounts in your accounting software. Think about how you can further break down your costs (the sky is the limit!) to track variations more closely. And think about how you’d group your costs to help tell a bigger story of the financial exchanges that drive your business.

The beginning of a year is always a great time to make a change, but really anytime will do – just do it. Depending on the accounting system you use, revamping your chart of accounts can be easier than you think and not harmful to your data. Try these operating expense groups if you need ideas:

• Compensation & Benefits
• Marketing and Promotion
• Technology Expenses
• Facility Expenses
• Corporate Expenses

Reach out to an accountant if you want more ideas on how to best proceed, or to make sure your system can handle this change. Other tools like Microsoft Excel or its more sophisticated counterparts can also help you build a financial packet that better meets your needs, so talk to your accountant about that too. Good luck!