Your chart should reflect your company's current business practices. Reviewing your chart of accounts is an important step in the process when you change accounting software. Answering these questions will help tailor your chart to better reflect company operations. Do you want to:
- Prepare detailed reports more easily?
- Create custom reports on the fly?
- Report by department or division?
- Consolidate reports across multiple divisions or multiple companies
- Prepare and distribute a package of reports with a few keystrokes?
Why Your Chart of Accounts Structure is Important
Reorganizing your chart of accounts will save time and provide more flexible reporting once you're up and running. The logic you establish now will guide your staff as they work in the new system. For example, they'll know precisely which number to use when setting up a new account instead of just picking a number at random.
A chart that mirrors your company structure allows you to report by department. Managers can use this information to target opportunities or improve performance.
If you have multiple locations or multiple companies, having a common chart of accounts lets you run the same reports across the organization making it easier to analyze and compare results. Tip: Save time by creating packages of reports for specific users, then automate their distribution by email.
Resist the urge to unthinkingly convert all your existing data from your old accounting system directly into your new system. Taking time now to evaluate your chart will ensure that it matches your current business practices and that the company is positioned for future growth.
