The chart of accounts is not just a list but a powerful management tool. Have you looked at yours recently?

Setting this up to show the areas of your business you want to track is instrumental in getting a clear picture of your performance.

The most commonly requested report by my clients is a Profit and Loss report for a particular period. There are three key sections of this report that can be tailored to suit you.

1. Income streams
2. Cost of goods sold or direct costs
3. Operating expenses

Is all your revenue lumped into one account "Sales"? When you split this into the 2-3 (or more in some instances) key sources of income you can better track what makes you the most money and which areas to market more, or cull completely. You can even use this to track costs against. For example, own a bar? Why not split the food and drink sales you can track wages for different areas, food costs, beverage costs and compare the three. You may discover your menu prices are too low or your staff are costing you more than they make you!

Costs of goods or direct costs - these are the expenses incurred to produce your items for sale, i.e. raw materials, drinks, food, etc. Create accounts that you want to track based on what you buy.

Operating expenses - these range from marketing, motor vehicle expenses to wages and uniforms. Again, where do you spend money in your business? What categories are most relevant or meaningful to you and your managers? Maybe you spend a lot on printing plans or large reports as an Architect? You may create separate accounts for paper, ink, printer repairs so you can compare deals with suppliers or negotiate better rates for high consumption.

We help our clients build comprehensive and USEFUL reports, working with their software and requirements. We build Chart of Accounts for new set up clients and customise existing ones or develop them over time as the needs of our clients change. Need help? Get in touch here!