We suggest proceeding with caution with your adjustments, however, as you want to make sure you are consistent and logical. For example, if you have unneeded categories in your COA, it’s usually not a good idea to eliminate them mid-period due to possible orphaned data in your financial statements. Upping the ante even more, we’re also including a COA template to provide should you hire a bookkeeper you with a handy jumpstart to your own chart of accounts. So on that note, let’s jump right in because clearer, more organized financials and improved decision-making are just around the corner. A well-designed chart of accounts should separate out all the company’s most important accounts, and make it easy to figure out which transactions get recorded in which account.
- Intuit Inc. does not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published.
- A business transaction will fall into one of these categories, providing an easily understood breakdown of all financial transactions conducted during a specific accounting period.
- When you can see which locations or events bring in the most cash flow, you can manage your business more wisely.
- However, they also must respect the guidelines set out by the Financial Accounting Standards Board (FASB) and generally accepted accounting principles (GAAP).