Wouldn’t it be great to have a compilation of all of your business’s financial transactions at your fingertips? With QuickBooks, an up-to-the-minute look at your chart of accounts is just a click away.
Chart of Accounts
A chart of accounts is a complete list of your company’s financial accounts in one place. Typically, each account in a chart of accounts is categorized into one of four account types: revenue, expenses, assets and liabilities. A chart of accounts helps you see how much money your business has available, how much you’ve spent in various categories, the value of any assets and different types of income.
The Hub of QuickBooks
The chart of accounts is the main screen for organizing your finances in QuickBooks; every recorded transaction is shown here. For each account in your chart of accounts, the screen shows the account, account type, account balance and any actions available to take with each account, such as running reports.
Setting up Accounts
To be able to see a chart of accounts in QuickBooks, you must set up your accounts, including bank accounts, credit cards, loans and any other pertinent business accounts. QuickBooks generates a general framework for your chart of accounts, which you can then customize to your specific needs. You can also tailor the typing of your accounts, and the detail of each type, for your specific business.
Also key to getting the most from your chart of accounts in QuickBooks is identifying the most common and important expense categories for your business, and making sure you use them accurately and consistently to track your business’s spending. Further, divide your sales income into your business’s different products or services. This will help you better analyze your business finances.
Tracking your Finances
QuickBooks accounts can be tracked two different ways: by the account balance (helpful for bank accounts and loans) or the dollar amount of transactions in a time period (such as spending on a specific category or a specific source of income). These are split in the chart of accounts between the top and the bottom of the screen, respectively.
A Useful Feature for Financial Tracking
A chart of accounts presents a thorough picture of how your business is performing and insights into your spending and income.
It is especially useful for generating financial statements. A profit and loss report, for example, will detail the same information as presented in your chart of accounts. When you record a transaction, categorize it in the chart of accounts, and generate a report, all of this information is synchronized across these places in Quickbooks.
For example, if you purchase a printer for your office on a company debit card and record it in Quickbooks, the software will debit the cost from the balance on that bank account, add it to the expense total for the month and relay this information to the profits and loss report.
Need help with QuickBooks? Contact Gift CPAs!
At Gift CPAs, our team is here to help you as you manage and grow your business. Our QuickBooks ProAdvisors are experts in both the technical and accounting aspects of QuickBooks. We can help you navigate business software like QuickBooks to help you keep your business running smoothly.
To meet with a Gift CPAs professional and get personalized advice about managing your business with QuickBooks, or to learn about our other services, contact us to make an appointment. We look forward to meeting you virtually or at one of our five locations in Harrisburg, Mechanicsburg, Myerstown, Ephrata or Lancaster!