5 Tips for a Better Chart of Accounts
The Chart of Accounts (COA) is the foundation of financial reporting, as every aspect of your financial reporting is directly or indirectly sourced from your COA. An organized, logical COA can be drawn on to both combine and parse a business’s financial records for management and other stakeholders.
In many businesses, however, the COA is far from optimized. It can be too simple and therefore unable to detail what is really going on “under the hood.” Or it can be too complex and hard to pull together in any meaningful way. Or it may have lost its effectiveness over time, as new codes were haphazardly added without regard to the overall logic of the original design.
A new or revamped COA can immediately improve your management insights and drive your business to new levels. Here are five tips for designing or redesigning your COA.