Tips for creating a chart of accounts

Tips for creating a chart of accounts:

QuickBooks provides complete lists of accounts for many different types of businesses; select one that best fits your business type. The accounts that QuickBooks creates are to help you get started. After QuickBooks sets up your company, you can add additional accounts, delete accounts you don’t need, and modify to fit your particular business.

1. Ask for input from your CPA or others in your industry
2. Be flexible
3. Don’t create a complicated chart of accounts – use classes, jobs, etc
4. Create descriptions for each account to assist you
5. Add, edit and delete accounts as needed
6. Check for industry-specific chart of accounts
7. Common mistakes when creating a chart of accounts:
8. Only your CPA or Bookkeeper understand the chart of accounts
9. Duplication of accounts
10. Fuel vs. Auto Expenses-fuel
11. Miscellaneous expense account contains something that you may want to track
12. Failure to define how data will be analyzed
13. What are GAAP and IRS requirements
14. Not allowing for business expansion