Q: I am taking care in setting up my chart of accounts, using MoneyWorks Cashbook on a my Mac and wanted to know how to use categories?
About the Chart of Accounts
All versions of MoneyWorks (Cashbook, Express & Gold) contain a fully integrated General Ledger and standardized chart of accounts. The chart of accounts templates (e.g. General Business etc.) are presented with the account types sequentially numbered in North American standards (e.g. GIFI in Canada. GAAP in the USA).
Of course the numbered codes (e.g. 7 alphanumeric characters) and the descriptions (e.g. 39 alphanumeric characters) can be changed to best represent and record the details that you want to or are required to track in your business (see TIPS article: modifying your chart of accounts).
Additionally MoneyWorks Gold consists of a departmentalized general ledger, meaning that you can set up departments and/or cost centers that allow you to track and report on individual business units e.g. locations, fleet of vehicles, departmentalized personal etc, See Tips article: How Departments work n MoneyWorks Gold.
Categorizing your Chart of Accounts
Alternatively to departmentalized or cost center accounting, many businesses categorize their accounts so that they can report and analyze their business results (e.g. Balance Sheet, Income Statement or P&L) in differing formats. Although they may possibly want to record their expenses, income, assets etc. into very detailed accounts for governmental or other financial considerations, when reviewing their results each month they are more concerned about how much was expensed by category or type of expense, e.g. all vehicle expenses as opposed to individual expenses for each vehicle or all communication charges versus each cell phone, land line, fax and internet connection. Continue reading