Details Matter Bookkeeping


Our Signature Service: Chart of Accounts Optimization

by | Jul 7, 2023 | About

You already know we are #notyourtypicalbookkeepers, but there’s something that we do for every new client that I want to dive a little deeper into.  I like to call it Chart of Accounts (COA) optimization.  This service is designed to help you streamline your financial reporting, resulting in more accurate insights and a clearer picture of your business’s financial health.  But what does that really mean?  We usually start with the Profit & Loss statement.

Unclutter and Simplify Income and Expense Accounts: We review your existing income and expense accounts, eliminating any unnecessary accounts and simplifying the structure.  We organize your related expense accounts into categories or buckets, allowing for better expense tracking and analysis. This enables you to identify trends, monitor spending patterns, and make informed decisions about cost control.

  • Granularity vs. Simplicity: Striking the right balance between granularity and simplicity is crucial. While it’s important to have detailed accounts for accurate tracking, having too many accounts can lead to clutter and confusion.
  • Customization for Industry-Specific Needs: Depending on the industry your small business operates in, there may be specific accounts or categories that are relevant to track. We customize your chart of accounts to align with industry standards and specific reporting requirements.
  • Utilize Sub-Accounts: Sub-accounts can provide additional granularity within main accounts. They allow for more detailed tracking within specific categories. For example, within the expense category for advertising, you can create sub-accounts for online advertising, print advertising, and social media advertising.
  • Accurate Gross Profit Calculation: We move key expenses to the Cost of Goods (or Services) Sold category. By doing so, we ensure a more accurate calculation of your gross profit, which is a vital metric for understanding your business’s profitability.
  • Regular Review and Updates:  Optimizing your small business’s financial chart of accounts is an ongoing process that requires attention to detail and a deep understanding of your business. By continuously refining and customizing your chart of accounts, we ensure they provide meaningful insights without unnecessary complexity, ultimately empowering you to make informed decisions for your business’s growth and success.

Cleaning up the Balance Sheet:  This side of your accounting is often overlooked and misunderstood.  The balances are typically cumulative over the entire span of your business and don’t automatically clear when an asset is sold or liability is paid off.

  • Clean out Old Assets, Liabilities, Bank, and Credit Card Accounts: We review your balance sheet accounts and remove any outdated or irrelevant items. This ensures that your balance sheet reflects the most current and relevant financial information.  We make any necessary adjustments – loan interest is an excellent example.
  • Organize Equity Accounts: We organize your equity accounts to clearly show current year and cumulative totals. This provides a comprehensive view of your business’s financial position and allows for easier understanding and analysis.

Trust Details Matter Bookkeeping & Advisory to provide expert guidance and meticulous attention to detail when it comes to optimizing your Chart of Accounts. Let us help you unlock the true potential of your financial data.

Join our mailing list for the latest updates and blog post announcements!