Ever looked at your bookkeeping software and thought, “What in the world are all these categories… and why do they sound like a robot made them up?” That is your Chart of Accounts, or as we like to call it: the master list of where your money goes to live (and sometimes hide).
If you are a small business owner, this is one of those terms that sounds complicated but really isn’t. So let’s break it down the way a normal person would explain it, not your tax textbook.
What is a Chart of Accounts?
Chart of Accounts is basically your business’s financial filing cabinet.
Every time money moves in or out of your business, it lands in a category. The Chart of Accounts (COA for short) is that master list of categories.
It usually includes:
- Income accounts (like sales or services)
- Expense accounts (like rent, software, or snacks… yes, snacks count)
- Assets (stuff your business owns like cash, equipment, or that printer you pretend works)
- Liabilities (stuff you owe, like credit cards or loans)
- Equity (your piece of the pie)
If your COA is clean and organized, it’s easy to see what’s coming in, what’s going out, and what’s left over for tacos, growth or savings.
Why Does It Matter?
Because when your COA is messy, everything becomes harder:
- Your reports are garbage.
- Your taxes are stressful.
- You cannot tell if you are making money or just moving it around.
And if you are guessing which category to put “Zoom subscription” under every month, that is a problem.
Signs Your Chart of Accounts Needs Help
- You’ve got 12 different versions of “marketing” expenses
- You do not know the difference between an asset and an expense
- You created new categories just to avoid asking your bookkeeper questions
If any of this sounds familiar, it is not just you. Most small businesses have a Chart of Accounts that grew like weeds… fast, wild and without a plan.
Here’s What We Do Instead
We build a lean, simple Chart of Accounts that actually helps you make decisions.
No fluff. No duplicate categories. No “other other other” bucket. Just clear, useful info that makes your books easier to read and your reports easier to trust.
Your Books Should Work for You, Not Confuse You
A clean Chart of Accounts saves time, money and sanity. It is one of the easiest ways to make your bookkeeping better overnight.
Need help cleaning yours up?
Book a discovery call and we will make your books look less like alphabet soup and more like a business that knows what it is doing.
