Charting my Accounts: Quick Books

A Chart of Accounts (COA) is one of the foundational activities that set a company up for success. It is simple but essential. The COA is a critical component of accounting software, as it represents the foundation of the accounting process. If there is no COA, financial statements will be difficult to decipher, making it challenging for readers to understand the accounts. The absence of a COA also makes it difficult to accurately report on an organization's performance.

When you create a new account in the COA, select the account type first from the list that QuickBooks populates for you. Remember, this is the part that affects your accounting so you want to make sure you get this right. URL: https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/learn-account-detail-types-chart-accounts/L2gCy0rfy_US_en_US

The COA is typically broken down into the following 3 columns: 1. Create business account names The account name is the given title of the business account you're reporting on (i.e., bank fees, cash, taxes, etc.). 2. Assign account numbers to business accounts Account numbers are the numbers assigned to each account name.

URL: https://quickbooks.intuit.com/accounting/chart-accounts/

Typically, when listing accounts in the COA, you should use a numbering system for easy identification. Numbering also makes it easy to record a transaction. Small businesses commonly use three-digit numbers, while large businesses use four-digit numbers to allow room for additional numbers as the business grows.

URL: https://corporatefinanceinstitute.com/resources/accounting/chart-of-accounts/

A COA is a list of all the accounts available for recording transactions in a company's general ledger or accounting software. To make a chart of accounts, you'll need to first create account categories relevant to your business, and then assign a three or four-digit numbering system to the accounts you create.

URL: https://www.freshbooks.com/hub/accounting/make-chart-of-accounts

No Skeletons in this closet

The skeleton (get them out of the closet) of the process:

1. Familiarize yourself with the account types: QuickBooks offers several types of accounts to categorize your transactions, including asset, liability, equity, revenue, and expense accounts.

2. Determine what accounts you need: Based on your business, decide which accounts you will need to effectively track your financial transactions.

3. Set up your COA: To set up your COA, go to the Lists menu in QuickBooks and select COA. Then, click the New Account button to create a new account.

4. Assign account numbers: Assign numbers to your accounts to keep them organized and make it easier to find specific accounts when needed.

5. Use account sub-types: Use sub-types to further categorize your accounts and provide more detail in your financial reports.

6. Regularly review and update your COA: As your business grows, you may need to add new accounts or make changes to existing ones. Regularly reviewing and updating your COA will help you keep it accurate and up-to-date.

Adding a new account to an existing COA When creating a new account for a COA, it's important to select the account type first from the list that QuickBooks populates for you. This selection affects the accounting and it's advisable to consult an accountant if unsure what to choose.

To make a COA, create account categories relevant to the business and assign a numbering system to the accounts created. Small businesses typically use three-digit numbers, while large businesses use four-digit numbers to allow for additional numbers as the business grows.

In the COA, it's recommended to use a numbering system for easy identification and recording of transactions. The chart of accounts is typically broken down into three columns: account names and the assigned account numbers.