Chart of accounts review checklist

The chart of accounts is the list every transaction is filed under. When it is tidy, reports answer questions. When it has grown without a plan, they raise them. Review it with these questions.

Structure

• Each account has one clear purpose, written in its name.
• No two accounts are used for the same thing.

  Two accounts for one purpose split every total in two.

• Accounts are grouped the way you want to read your reports.

Use

• Accounts with no movement for a long time are reviewed or closed.
• A 'miscellaneous' account is small, and someone knows what is in it.
• Everyone who posts entries knows which account to use for common cases.

Before a new system

• The new chart is agreed before any balance is moved.
• Every old account maps to exactly one new one.
• Your accountant has checked the chart against what your reporting requires.