Let’s face it, accounting isn’t always the most exciting thing! We’re entrepreneurs, artists, professionals, consultants, but not accountants. However, when it is time to talk to our banker, tax auditors or investors, we’re often consumed by terrible anxiety. We inevitably ask ourselves: “Why didn’t I take the time to organize my business and finances?”
As you probably know, Kiwili offers an all-in-one expense and revenue management tool. Managing your accounting is immediately made simpler and more enjoyable! This feature involves a somewhat technical term often commented upon on our forum – the chart of accounts.
What is a chart of accounts?
A chart of accounts is an index of the financial accounts that a business uses in its accounting system. It includes both balance sheet accounts and income statement accounts, and shows assets, liabilities, equity, revenues and expenses in one place and broken down into subcategories as follows:
- Balance sheet accounts
Owner’s (Stockholders’) Equity
- Income statement accounts
- Operating Revenues
- Operating Expenses
- Non-operating Revenues and Gains
- Non-operating Expenses and Losses
The chart of accounts is an organized collection of financial information and the basic tool needed for the preparation of a company’s financial statements.
What is the purpose of a chart of accounts?
In order to have an adequate management accounting system, it is imperative to have an appropriate and flexible chart of accounts, structured to provide the manager with the necessary information for decision-making. When the company wants to highlight important strategic costs, such as R&D or training, it can structure its chart of accounts to identify or group these costs. Similarly, when a business has multiple activities or products, the proposed model can be organized to provide the executive with an analytical report on the profitability of products and services.
Chart of accounts samples
Here are some charts of accounts samples to help you:
- Quebec chart of accounts to use with Kiwili (CSV)
- Canada and USA chart of accounts template (Excel)
- French GAAP Chart of Accounts (used in France, Belgium, Spain and many francophone countries)
- Morocco chart of accounts
We invite you to read 5 Tips for Starting a Business Successfully
Don’t hesitate to consult the blog of Kiwili to find a lot of articles concerning the entrepreneurs and the autonomous workers !