This term, more commonly associated with computerised accounting, can mean whatever you want it to mean. However, it typically refers to the structure of accounts used to record the transactions of the business. It could be a simple code list to a hierarchy of separate accounts, project codes or organisation reflecting the business’ operations – or anything in between. The phrase “getting the chart of accounts right” is about understanding the reporting requirements. Notwithstanding the ability to create reporting hierarchies a well-structured set of accounts will ease the production of reports and be flexible to cater for additional or changing requirements. Alas, another school-boy error is that reporting needs are too often considered after the chart of accounts is adopted!
Leave A Comment