Chart of Accounts

By March 23, 2020March 29th, 2020Blog, Profit First

Let’s talk today about your Chart Of Accounts.

 

A teacher of mine once explained a chart of accounts to me by telling me to simply just say the words slower.

 

At the time I didn’t find it helpful in the slightest, but here I am sharing it with you, so it must have made some impact. Hopefully you are able to see the value in it quicker than me.

 

A better way I think, to explain is by using our gyms as an analogy. In your gym I am sure you have a shelf or a place for each of your various types of equipment. You wouldn’t keep you yoga mats with your dumbbells or your ropes with your your air-bike. If people don’t people things where they belong your gym will become very disorganized and you wouldn’t be able to easily track your inventory. Things can get misplaced or damaged and you wouldn’t be able to address it right away because it may take you to long to notice.

 

So simply put, your chart of accounts is just a way to organize your transactions, with the objective being that when we sit down twice a month to review our books. transactions are where they are supposed to be and organized so we can assess all areas that makes sure there are no fires that need to be put out.

 

Most accounting software has a category for a chart of accounts. We encourage you to view it often and make sure there are not to many accounts being managed in there. We recommend around 15 or so.

 

The goal in all of this is to be able to understand what your books are telling you so that you understand what is in each account.

 

Would you like to see a sample of a chart of accounts? Reach out to me at John@incitetax.com I would be happy to share that with you and talk you through it.

 

Check out this quick tip video I made to explain your chart of accounts.

 

 

 

 

Check out our other videos for information on the Profit First system and other great tax tips for microgym owner.

 

In my new book, Profit First For Microgyms, I break down Mike Michalowicz’s proven method, so that it is easily digestible by our Microgym owner community.

 

You can order your copy today by clicking here. 

 

Interested in more tips and advice on how to better manage the financial health of your microgym? 

 

I would LOVE to connect.

 

I share daily tips and advice not only for Microgym owners but for all of us being bullied by the IRS.

 

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