Selecting the right Chart of Accounts
A chart of accounts should be designed for each business’ individual needs. Quickbooks offers several pre-designed charts of accounts. For selected industries, however, these pre-designed charts of accounts are to be used only as samples. You need to remove or re-title those accounts.
This process needs to be thought out and your accounts need to reflect your business or you can run into a lot of problems. Your CPA is a good source to develop this chart of accounts, yet their hourly rate is typically 2 to 3 times the amount of standard bookkeepeing rates.
Not only less expensive, a bookkeeper can also help you develop the main body of your company, which is your chart of accounts.
Your chart of accounts tells you about your:
- assets-(assets are money or equipment paid or accounts receivable (money owed to you) a company has)
- liabilities-(liabilities are what a company owes, loans, credit cards, payroll liabilities)
- equity-(money that has been invested into the company)
- income-(can be separated by services) allowing you to track which part of your business brings in the most income
- cost of goods-(what it cost your company to achieve the income)
- expenses-(what it cost to run your business)
So when you need to set up your chart of accounts, consider hiring Optimum Accounting. We will develop a chart of accounts that will reflect your company so you will have an easy time with you bookkeeping, as well as servce as a more cost-effective solution.
