Setting up your Chart of Accounts is one area in bookkeeping that isn’t given the attention it deserves. Putting together your Chart of Accounts is the very first step you take when setting up your bookkeeping...that’s how important it is! In fact, without a proper Chart of Accounts, all of your bookkeeping efforts are completely wasted. Look at it this way. Imagine if you took the time and effort to gather all your receipts and accounting documents and just stacked them into a nice, little pile on the corner of your desk. What would you do at the end of the month when you need to determine whether your total expenses for a particular ancillary service, like grooming, exceeded your total income from that same service? You would have to sit down with your pile of documents and start sorting through them all. Coming up with any sort of financial report at the end of the month would be a complete nightmare! That is basically what happens when you don’t have the proper Chart of Accounts in your bookkeeping software account. Your Chart of Accounts serves as your filing system for your accounting documents. It is the foundation of your bookkeeping. It makes it possible for your raw data to become useful information for your practice. Information you can use to determine where your practice is losing money and where there is potential to make more money. Basically, the Chart of Accounts is what takes your bookkeeping from just a way to organize your finances, to a growth-inducing, money-making tool!
Seeing the value in having a properly set up Chart of Accounts, I went hunting for one that I could use specifically for my clients...veterinarians. I now use a personally-revised version of the Chart of Accounts from the American Animal Hospital Association. It’s tailored to veterinarians and has the option of breaking down income and expenses into detailed categories specific to veterinary practices. It’s tailored to veterinarians and has the option of breaking down income and expenses into detailed categories specific to veterinary practices. It makes a world of a difference in the financial reporting process and allows my clients to make the most informed decisions possible when making financial changes in their practice. If you have any questions about how to go about acquiring a Chart of Accounts specific to veterinarians send me an email at email@example.com.