PREPARING QUICKBOOKS FINANCIAL STATEMENTS: 
Set Up the Chart of Accounts to Tell a Strong Story about Your Business
By Libby Smith, QuickBooks Professional Advisor, Accounting for Success, PC

The financial statements that you can produce with a couple of clicks in QuickBooks quickly tell you, and any one else you share them with, the financial story of your business.  That can be good news, or bad news, depending on the understanding and care you’ve given to setting up the chart of accounts. 

The quote “There’s no second chance to make a first impression” is especially true when you share your financial information.  Although you may not value or appreciate the organization, or “beauty” of financial statements, I guarantee you that the financial professionals you interact with (your banker and other financial advisors) do.  When you give them financial statements that have account names that are misspelled, have font’s that are randomly upper and lower case, and are in the incorrect sections of the financials, the story being shouted to them that you either don’t know, or don’t care to know, the basic language of business.  It gives a first impression of weakness even if your company is strong, or you are diligent in making it stronger.    
It’s very easy to change that impression, and tell a strong story, by using these tips when setting up and maintaining the chart of accounts. 

• Spell account names correctly. 
• Use upper case letters to begin each word, lower case letters for the rest of the word.  All UPPERCASE letters feel like the story is being shouted.  All lowercase letters feel like the story is being whispered. 
• Be sure that the accounts are in the correct sections of the financial statements.  The first thing you are asked when you set up a new account is to give the “type” of account—bank, asset, liability, equity, income, cost of goods sold, expense, etc.  QuickBooks let’s you pick anything, so if you don’t know, verify with your accounting professional that they are located correctly. 
• Expense accounts are traditionally arranged alphabetically.  It’s easy to do that in QuickBooks.  With the chart of accounts list opened, go to the Expense section.  Put your mouse on the diamond to the left of the account name, and drag and drop it into alphabetical order. 

These simple steps can help you tell a stronger story about your business and work more effectively with the people you share it with. 

Author Credit: Libby Smith, Accounting for Success PC, 303-799-9111, x-220.