![]() QuickBooks will allow you to do this, as well as most other financial reporting platforms including Fathom, which is the platform we use for performance reporting with our clients. When you view your reports in a collapsed form, all of the subaccounts will fold up into the parent account. One advantage of using parent accounts is that you can view your financial reports in both collapsed and expanded forms. To keep things clean, no transactions should be posted to the parent account. It helps us remember to enter all transactions at the subaccount level. This is just our preference and not a universal fule. ![]() ![]() We have an internal convention of listing parent accounts in all caps, and subaccounts in lowercase. ![]() To avoid this situation, make sure you understand and are using parent accounts and subaccounts to group your accounts in a logical manner. It’s hard to look at the information and make heads or tails of it! These expense accounts might be listed alphabetically or perhaps they will be listed in a completely random order. We o ften see all sales lumped together into a single account but a long laundry list of expense accounts detailing spending to the finest detail. Sometimes wineries come to us with a chart of accounts that is on the one hand too simple and on the other hand too complicated. How can I make the chart of accounts work for me? Use parent accounts and subaccounts While this is a general schema that you will often see, know that there is no single chart of accounts that is “correct.” There are some basic accounting principles you need to adhere to (yes, put your sales accounts in the income section and put your expense accounts in the expense section), but overall you have a lot of leeway to design a chart of accounts that works for your specific business situation and allows you to see your financial information in a way that is helpful to you. The account numbering system corresponds to these sections: How is the winery chart of accounts structured?Īs a standard practice, the chart of accounts is broken down into sections that correspond to the key sections of the financial statements: revenue, expenses, assets, liabilities, and equity. Your financial reports will move from being a cluttered mess to becoming a useful tool for planning and making decisions. By sorting your transactions in a meaningful way, your financial reports will be more meaningful. This allows you to see at a glance how each channel is performing compared to other channels.Ī well-structured chart of accounts will keep your financial reporting clear and accurate. This might be adequate for tax purposes, but it is fairly useless when you are trying to compare how your tasting room is doing compared to your wholesale channels.įor this reason, to continue with the example of the revenue section of the chart of accounts, we prefer to break income up into sales by channel. You could dump all your revenue into one account called “Sales” and call it good. If you organize data in a logical manner, you will be able to see things that would not otherwise be evident. Why does the winery chart of accounts matter?
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