Here's how to keep your chart of accounts organized
Q: My chart of accounts has become unwieldy. What can I do?
ACE advises: One sign that it's time for a new accounting system is that your chart of accounts includes pages and pages of account combinations.
How does this happen? It happens gradually over time, especially with a linear chart of accounts. If you use a linear chart of accounts in your quest for more information and metrics about your business, those strings of account combinations become longer and more numerous.
Bloating is never good, particularly when it comes to your chart of accounts.What you need is accounting software designed to maintain a lean chart of accounts, and that uses built-in system dimensions. Instead of hard-coding individual accounts, dimensions offer a more flexible and fast way to delve into the details of your financials.
When it's time to close the books, a lean chart of accounts means fewer errors to correct, leading to a speedier close. A speedier close means key financial reports are in the hands of the executive team much faster than before. Not only are you able to spend more time on the strategic role you have, your colleagues can, too.
It's amazing the improvements you'll see when your team is able to make data-driven decisions in ways not possible with the restrictive chart of accounts found in entry-level or legacy accounting software.
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