As a small business owner, you may feel at a competitive disadvantage when it comes to the business intelligence and the data analytics game. But it doesn’t have to be that way. A well-designed chart of accounts is the foundation of financial data analytics and business intelligence. When done right, a chart of accounts (COA) should reflect the organizational structure and nuances of your business.
| Information drives decisions, which drive the success of your business. The chart of accounts is the foundation of your information.
Make Your Financial Information Work For You
To maximize the financial analysis capabilities of your accounting software you must configure correctly your chart of accounts – the backbone of all financial reporting. Not only that, but when your accounting software can’t generate the exact view your business needs, it’s easy and efficient to export your data to Excel and pivot the reports into the desired views – but only if your COA is organized correctly.
The best time to design your chart of accounts is when setting up a brand new accounting system or when making a change in systems. Even in small accounting packages like Quickbooks, Sage and Xero, the chart of accounts can be designed to capture not only line-item expenses, but also department-level (functional) spend, project spend, location spend and any of the other tags (classes or categories) that are unique to your business.
*For a more detailed explanation of exactly how to design your chart of accounts, see our post here: HOW TO SETUP YOUR CHART OF ACCOUNTS: THE RIGHT WAY, THE FIRST TIME