As a business owner, you know your business better than anyone; you live it and breathe it. So when it comes to creating a general ledger, you should be the one to determine your chart of accounts structure and protocols. After all, you are the authority on your business’s financial activities.
Unfortunately, far too often general ledgers (GL) are set up to make the processes of preparing year-end GAAP financial statements and filing income tax returns easier. Those are once-a-year activities, whereas running your business is an everyday activity. Organize your GL to give you better operational information, even if it complicates the year-end financial statement and tax return processes.
Your general ledger is, in many ways, a database. Like all databases, your GL will be only as useful as the data captured. Capturing irrelevant or low-value information will only add to the overall cost of getting the information you truly need. The key is to organize your GL in a way that turns data into information.
In this article, we discuss some things to consider about how to organize and use your GL.
Length: 2 pages (PDF 82 kB)