Small Business Shared Interest Group

I would pitch in and weigh in, but revamping the chart of accounts (COA) for a rapidly growing professional services company requires a comprehensive understanding of various organizational and financial factors. I would want to know things such as company size, departmental structure, service lines, corporate status (public or private), accounting methods, number of operating banks, and the complexity of financial instruments, including:

1. Management Reporting Requirements​

2. Regulatory and Compliance Obligations​

3. Existing Financial Systems​

4. Detailed Expense Categorization, classes, subclasses​

5. Revenue Recognition Policies

Thanks for the reply, @Ilya Ilienko!  Here is some additional insight.

We are moving from QB Professional Services to NetSuite SuiteSuccess. 

It is a privately owned company with just under 100 employees and approximately $20M in revenue. 

We have 1 bank (3 accounts) and 2 credit card providers (1 for field people and 1 for Ops), no debt. 

We have 2 main lines of service (Project Management and Recruiting). Any more granular sub-service lines are captured in our other software, NetSuite SuiteProjects Pro, which is where we collect time and expense data and generate invoices. This data then flows into the accounting software.

We use the class feature in QB to break out our East coast and West coast locations. 

Departments that I want to set up are Accounting/Finance, HR, IT, Marketing, Overhead (rent, insurance, etc). I want to be sure not to miss anything here.

Most of our contracts are long term, but we earn revenue monthly and record revenue as earned. No deferred revenue.

I have been making improvements to the COA since I started, however I need to take this to the next level now that we are moving into a new software.

Does this help clarify? Thanks again!

I would pitch in and weigh in, but revamping the chart of accounts (COA) for a rapidly growing professional services company requires a comprehensive understanding of various organizational and financial factors. I would want to know things such as company size, departmental structure, service lines, corporate status (public or private), accounting methods, number of operating banks, and the complexity of financial instruments, including:

1. Management Reporting Requirements​

2. Regulatory and Compliance Obligations​

3. Existing Financial Systems​

4. Detailed Expense Categorization, classes, subclasses​

5. Revenue Recognition Policies

Thanks for the reply, @Ilya Ilienko!  Here is some additional insight.

We are moving from QB Professional Services to NetSuite SuiteSuccess. 

It is a privately owned company with just under 100 employees and approximately $20M in revenue. 

We have 1 bank (3 accounts) and 2 credit card providers (1 for field people and 1 for Ops), no debt. 

We have 2 main lines of service (Project Management and Recruiting). Any more granular sub-service lines are captured in our other software, NetSuite SuiteProjects Pro, which is where we collect time and expense data and generate invoices. This data then flows into the accounting software.

We use the class feature in QB to break out our East coast and West coast locations. 

Departments that I want to set up are Accounting/Finance, HR, IT, Marketing, Overhead (rent, insurance, etc). I want to be sure not to miss anything here.

Most of our contracts are long term, but we earn revenue monthly and record revenue as earned. No deferred revenue.

I have been making improvements to the COA since I started, however I need to take this to the next level now that we are moving into a new software.

Does this help clarify? Thanks again!

I would pitch in and weigh in, but revamping the chart of accounts (COA) for a rapidly growing professional services company requires a comprehensive understanding of various organizational and financial factors. I would want to know things such as company size, departmental structure, service lines, corporate status (public or private), accounting methods, number of operating banks, and the complexity of financial instruments, including:

1. Management Reporting Requirements​

2. Regulatory and Compliance Obligations​

3. Existing Financial Systems​

4. Detailed Expense Categorization, classes, subclasses​

5. Revenue Recognition Policies

Hi all!

I am expanding an accounting department for a rapidly growing company. My team is growing and we are implementing new software. I would like to revamp the chart of accounts from a simple structure to one that is more thought out and includes departments. We are a professional services company, so no inventory. Our main costs are the salaries associated with our services, and our overhead. I have a decent level of knowledge and experience on the subject, but I am far from an expert on this subject.  I would love to hear suggestions / pitfalls / advice so I can get this new COA right the first time. 

Thanks in advance! :)

The biggest headache I have when it comes to revamping COAs is the numbering system. There is also the argument about what constitutes cost of services sold in a service-based company like yours.

With numbering, I use 5 or 6 digit numbers depending on how many sub levels there are.

1#### are Assets

2#### are Liabilities

3#### are Equity accounts

4#### are Revenue accounts

5#### are COGS

6#### are Expenses

7#### are Other Income

8#### are Other Expenses

9#### are Non-posting accounts.

I can share a more detailed template if you need one.

Hi all!

I am expanding an accounting department for a rapidly growing company. My team is growing and we are implementing new software. I would like to revamp the chart of accounts from a simple structure to one that is more thought out and includes departments. We are a professional services company, so no inventory. Our main costs are the salaries associated with our services, and our overhead. I have a decent level of knowledge and experience on the subject, but I am far from an expert on this subject.  I would love to hear suggestions / pitfalls / advice so I can get this new COA right the first time. 

Thanks in advance! :)

@David Belnap Thank you for bringing up the topic of what constitutes COGS for a service-based company. This could be a whole separate thread (or webinar topic, LOL)!  I would love to dive into that further at some point, as there seems to be many conflicting opinions on ways to record those resource costs. ;) 

For the COA, the SuiteSuccess software has a suggested numbering template, so I will begin there and see how things fall. 

Thanks for the template and the feedback!

The biggest headache I have when it comes to revamping COAs is the numbering system. There is also the argument about what constitutes cost of services sold in a service-based company like yours.

With numbering, I use 5 or 6 digit numbers depending on how many sub levels there are.

1#### are Assets

2#### are Liabilities

3#### are Equity accounts

4#### are Revenue accounts

5#### are COGS

6#### are Expenses

7#### are Other Income

8#### are Other Expenses

9#### are Non-posting accounts.

I can share a more detailed template if you need one.

Hi all!

I am expanding an accounting department for a rapidly growing company. My team is growing and we are implementing new software. I would like to revamp the chart of accounts from a simple structure to one that is more thought out and includes departments. We are a professional services company, so no inventory. Our main costs are the salaries associated with our services, and our overhead. I have a decent level of knowledge and experience on the subject, but I am far from an expert on this subject.  I would love to hear suggestions / pitfalls / advice so I can get this new COA right the first time. 

Thanks in advance! :)

The biggest headache I have when it comes to revamping COAs is the numbering system. There is also the argument about what constitutes cost of services sold in a service-based company like yours.

With numbering, I use 5 or 6 digit numbers depending on how many sub levels there are.

1#### are Assets

2#### are Liabilities

3#### are Equity accounts

4#### are Revenue accounts

5#### are COGS

6#### are Expenses

7#### are Other Income

8#### are Other Expenses

9#### are Non-posting accounts.

I can share a more detailed template if you need one.

Hi all!

I am expanding an accounting department for a rapidly growing company. My team is growing and we are implementing new software. I would like to revamp the chart of accounts from a simple structure to one that is more thought out and includes departments. We are a professional services company, so no inventory. Our main costs are the salaries associated with our services, and our overhead. I have a decent level of knowledge and experience on the subject, but I am far from an expert on this subject.  I would love to hear suggestions / pitfalls / advice so I can get this new COA right the first time. 

Thanks in advance! :)

@David Belnap Could you please share some light on when "Non-posting accounts,' is used and how it is managed in an accounting software?

Thank you.

The biggest headache I have when it comes to revamping COAs is the numbering system. There is also the argument about what constitutes cost of services sold in a service-based company like yours.

With numbering, I use 5 or 6 digit numbers depending on how many sub levels there are.

1#### are Assets

2#### are Liabilities

3#### are Equity accounts

4#### are Revenue accounts

5#### are COGS

6#### are Expenses

7#### are Other Income

8#### are Other Expenses

9#### are Non-posting accounts.

I can share a more detailed template if you need one.

Hi all!

I am expanding an accounting department for a rapidly growing company. My team is growing and we are implementing new software. I would like to revamp the chart of accounts from a simple structure to one that is more thought out and includes departments. We are a professional services company, so no inventory. Our main costs are the salaries associated with our services, and our overhead. I have a decent level of knowledge and experience on the subject, but I am far from an expert on this subject.  I would love to hear suggestions / pitfalls / advice so I can get this new COA right the first time. 

Thanks in advance! :)