Duluth/Gwinnett CPA: Setting up Your Chart of Accounts for Your Business

Duluth/Gwinnett CPA: Top 5 Tips to Bookkeeping Success: Setting up Your Chart of Accounts for Your Business

Setting up Your Chart of Accounts for your new Gwinnett business will be an important start in the record keeping and accounting for your new business venture. Having your chart of accounts properly labeled and classified will do much to make your bookkeeping easier as well as to provide you with substantive management information. The below bookkeeping tips will do much to ensure you only get the most out of the accounting for your new business.

Top 5 Tips to Bookkeeping Success

1. Classification. Having your accounts listed in the right sections on your Balance Sheet and Profit and Loss are essential components in knowing the present and future viability of your business. For example being sure to list your Accounts Payable as a Current Liability is essential to prudent business management which is critical to short and long term business success.

2. Numbers. Having just the right number of accounts in your chart of accounts will do much to help ensure you have all of the management information you need while having none of the detail that you do not. For example, having an account called Telephone & Utilities rather than all of the varied individual types will do much to keep your books and records concise and useful.

3. Sub Accounts. Submarines, subsidiaries, subsidies...seems like you are doing something less than "sub-stantial." If an individual chart of account is not strong enough or important enough to stand on its own merits, get rid of it.

4. Cost of Goods Sold/Gross Margin. Since Day 1 of my CPA practice I have analyzed every single one of my invoices to ensure that an acceptable and appropriate rate of return is received on each and every invoice. I would estimate that covers approximately some 7,000 invoices and counting. Starting your billing off with this most important consideration will do MUCH to help ensure you business not only survives but thrives.

5.Management Information. A properly compiled chart of accounts will do much to ensure that your business has the financial information that it needs to make key management and pricing decisions. Using historical data as a light into the future will do much to enlighten your reasoning and your decision making.

As a CPA in Atlanta for decades I have learned that having useful financial statements are paramount. To read more about this see http://www.hiscpa.com/bookkeeping-accounting.html   www.HisCPA.com Duluth GA CPA

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