Answers · Bookkeeping
How to Organize a Chart of Accounts for a Small Business
A chart of accounts is the structured list of asset, liability, equity, income and expense accounts used by the business.
This question is answered in full on the main page for it.
How it works
The rule, and what it turns on.
It should be detailed enough to support management and tax reporting but simple enough to apply consistently.
Example
A repair shop can separate Parts Sales and Labor Revenue while keeping each loan and credit card in its own balance-sheet account.
Common mistakes
What we see go wrong, and what we do instead.
- Creating an account for every vendor.
- Mixing loans, cards and equity.
A better approach
- Start from an industry chart and customize only useful reporting categories.
Authority
Where this comes from, so you can check it.
IRC §6001; Treas. Reg. §1.6001-1; IRS Publication 583; IRS Small Business Recordkeeping guidance.
Educational information, not individualized tax advice. Treatment depends on your facts, entity classification and tax year, and IRS instructions change. Confirm your own position with us before relying on it. Mint Associates does not provide legal services.
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