If you have a small business, you know how important it is to keep good records of your income and expenses. You may however, know how important it is, but really still find it frustrating and time consuming. If so, you are not alone!
A high majority of business owners are now using software like xero or MYOB to help keep track of their income and expenses, as it really does make things so much easier (as long as you have been shown how to us it well!).
But, one thing we find a lot of people don’t realise, is that within their software program they can personalise the ‘Chart of Accounts’ to suit their own business.
The Chart of Accounts is that list of items that you can choose from as to where you want to ‘file’ away those pieces of information in your business. For example, you have an expense on your bank statement for petrol, and you choose to file that into ‘Motor Vehicle Expenses’. That list which includes Motor Vehicle Expenses is your Chart of Accounts.
A lot of the time, the options that you have to choose from will suit your business, and all is good. There are many times however where those options just don’t quite suit your business. You may want to keep track of certain income or expenses different to the options that are available.
For example, there may be an account for ‘marketing and advertising’. You are expected to put all of your costs for anything to do with marketing into this account. You may however want to break this up, and separately track the cost of Social Media marketing for example. The good news is that you can add, change or remove accounts from your Chart of Accounts to accommodate exactly what you do want to track. It’s amazing how many clients just didn’t realise that had the option to do it.
The ideal time to do this is when you set up the accounting software, so it is certainly worthwhile sitting down and determining what exactly it is that you want to be able to report on. It is possible however to do it at anytime; it may just require a little care if you have already been using the accounts you wish to change.
It is the reason why when we have a client start a new business, or a new business client come to us, we spend the time to go through their goals and objectives for the business, so we know how to be able to assist them in the best way. We can them ensure the Chart of Accounts is set up in the most useful way.
If you need any assistance with this, we are happy to help. If this all still sounds way too hard and frustrating – get in touch with us, we are absolutely able to help you!