Building an Effective "Chart of Accounts"


I am currently setting up Quickbooks for my manufacturing business. I have tons of historical data to enter. I added all my vendors and I am now at the point of creating my "Chart of Accounts." After thinking about it for awhile, it got very complex. Poorly designing the CoA or incorrectly entering past transactions could cause inefficiencies later. So I'd like to seek professional help to make sure everything is correct from the start.

My question is, should I seek a $30/hr bookkeeper or talk to my $180/hr CPA?

Accounting Bookkeeping

asked Jun 7 '10 at 22:38
695 points
  • I discussed this with my CPA. He said he would have his bookkeeper, with whom he works closely, setup the the CoA. He said if she has questions she will consult him. So I decided to speak to an independent bookkeeper. She agreed with my CPA. She is teamed up with an EA and would handle the setting up of my CoA exactly the same way; consult her EA if needed. She assured me that she knows how to setup a structure that her EA expects. I decided to give the bookkeeper a shot. I gave her a copy of my QB file, which has all transactions in the "Ask My Accountant" income/expense accounts. – Clint 14 years ago

5 Answers


Definitely start with the CPA to get the Chart correct and organized, then use a bookkeeper for the data entry.

Since the new bookkeeper will still be getting used to what goes where, especially if the old books and new books have different account lists, have another entry called "Uncategorized" and encourage its use. Then you and the bookkeeper can go through it periodically and decide where stuff goes in future.

answered Jun 7 '10 at 23:12
16,231 points
  • I agree. Chart of Accounts is very (if not the most) important aspect in accounting. Have it done right and you may not have to touch it ever again. – Stefanos Tses 14 years ago


I'd also suggest from what Jason mentioned to talk with a CPA that has consulted in your business area and with your business model that you have setup. This is only important if the model that you are perusing is anything more complicated than a cash basis for revenue recognition or a possible complicated cost structure.

On a start-up JV I was working with the revenue model was project based and it was critical to work with a team of CPAs to get it right from several firms and it took a while to get the right resource to get this right. The first hiring attempts stunk.

So if you’re a straight sales/service with cash basis for revenue recognition and your R & D cycle is less than 1 year you can be fairly flexible with the CPA experience level for setting up your chart of accounts. If on the other hand you have complicated depreciable projects and a revenue recognition that goes with a complex sale then be choosy about your CPA.

answered Jun 7 '10 at 23:57
John Bogrand
2,210 points


Definitely start with a CPA for the chart of accounts. Bookkeepers focus on working with a defined system, not on "defining" the system.

On a different note, you had mentioned that you had a great deal of historical data to input. Is this data from a previous accounting system? If so, I recommend using the same chart of accounts as the previous system and then make revisions to the chart of accounts and adjusting entries to the previous data. Otherwise, you will not be able to tie back to where you left off in the previous system. Even if you didn't have an accounting system previously, you will still need to tie back to your 2009 tax return if data goes back that far.

Also give consideration to the most efficient ways of getting that information into quickbooks. If no previous accounting system, you can import bank data from your online banking and then code the transactions to respective accounts after it is imported. Then, depending on how far the records go back, you will need to book transactions for payables and receivables at the end of each historical period that you want to get right on a GAAP basis.

Feel free to contact me directly if need any assistance. - [email protected].

answered Jun 15 '10 at 05:49
Smart1 Cpa
171 points


I noted a lot of answers to this question already and it's an old one as well. However, when you mentioned manufacturing as your business, QuickBooks has preset charts of accounts when you create a new company in it. Did you consider that as your starting point?

answered Dec 14 '11 at 12:13
323 points


Good answers here. I would also suggest that if you have a "ton" of data that you import the data using a script or csv file etc. Will make your life so much easier!

answered Jul 16 '10 at 04:06
88 points

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