Whenever we are trying to plan our data systems (Accounting, Production Tracking, Inventory) I always ask myself how we will use this data in the future.
For example, we sell alot (To the Trade) of flatbed rigid materials, like PVC, Styrene, CORO, Aluminum Etc. So I had an account for each of the material types - both an income and cost of goods.
Later I realized that having all these different accounts for rigid materials made it hard to get a quick picture of the overall profitability of the flatbed. I had to add everything up every time. Now we have just one account for digital flatbed work (One Income and one COG). We put material, ink and maintenance costs (bulbs, etc) in that one account. Now, when we want a better idea of flatbed profitability, we only have to compare the two accounts.
From there, if we want more detail, we have everything itemized. For example, I know how many sheets of 6mm Sintra we have sold because we have items & categories for it.
Another way to say it would be to set your accounts up based on departments or decision-making areas. Maybe permits should be part of the install costs? Use your accounts to determine profitability for small areas of your company. Like whether a printer is making it's monthly payment or an installer is really making any money at the end of the day.
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Another point I try to make is to keep expenses in two major categories. Recurring and Non-Recurring. I like to put owner lunches, small equipment/tool purchases, one time custom software development, etc in non-recurring expenses and the stuff we pay every month (Power bill, employees, rent) in a recurring expense category. This is a defensive strategy for me. If I ever feel like we didn't show a profit like maybe we should have, I can figure that a pretty good percentage of the non-recurring expenses were more of an "Investment" in the company and could be stopped or cut back next year without affecting the general operations of our company.
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Here's our basic COA as a wholesale printer:
1210 Accounts Receivable Accounts Receivable
1310 Inventory Asset Other Current Asset
1400 Accumulated Depreciation Fixed Asset
1500 Furniture and Equipment Fixed Asset
1600 Vehicles Fixed Asset
1705 Undeposited Funds Other Current Asset
1710 Loan to Shareholder
1750 Receivable - Employee Other Current Asset
2010 Accounts Payable Accounts Payable
2100 Payroll Liabilities Other Current Liability
2110 Direct Deposit Liabilities Other Current Liability
2120 Sales Tax Payable Other Current Liability
2150 401K Liabilities Other Current Liability
2210 Long Term Liability
2300 Equipment Loan Other Current Liability
3100 Capital Stock Equity
3210 Owner Investment
3330 Owner Withdrawal
3900 Retained Earnings Equity
4100 Screen Income
4200 Digital Flatbed Income
4300 Digital Roll Income
4400 Finishing Income
4500 Accessories Income
4520 Blanks Income
4550 Samples Income
4600 Paper & Offset Income
4710 Parcel Shipping Income
4720 Freight Shipping Income
4730 Kitting & Packaging Income
4800 Outsourced Production Income
4820 Design Income
4910 Discounts Income
5100 Screen Cost of Goods Sold
5200 Digital Flatbed Cost of Goods Sold
5300 Digital Roll Cost of Goods Sold
5500 Accessories Cost of Goods Sold
5600 Finishing Cost of Goods Sold
5705 Shipping Supplies Cost of Goods Sold
5710 Parcel Shipping Cost of Goods Sold
5720 Freight Shipping Cost of Goods Sold
5810 Production Wages Cost of Goods Sold
5820 Taxes - Production Payroll Cost of Goods Sold
5830 Workers Comp Insurance - Production Cost of Goods Sold
5840 Health Insurance - Production Cost of Goods Sold
5850 HSA - Production Cost of Goods Sold
5860 401K Production Company Match Cost of Goods Sold
5890 Contracted Production Labor Cost of Goods Sold
5910 Merchant Processing Fees Cost of Goods Sold
5950 Outsourced Production Cost of Goods Sold
6010 Bank Service Charges Expense
6030 Business Insurance Expense
6050 Utilities & Telephone Expense
6080 Rent Expense
6110 Office Supplies Expense
6120 Professional Fees Expense
6240 Owner Wages Expense
6270 Life & Disability Insurance Expense
6350 Automobile Expense Expense
6450 Software & Computers (Off the shelf) Expense
6510 Internet & Website Advertising Expense
6530 Trade Network Dues & Subscriptions Expense
6540 Trade Show Promotion Expense
6550 Direct Mail Promotion Expense
6810 Admin Wages Expense
6820 Taxes - Admin Payroll Expense
6830 Workers Comp Insurance - Admin Expense
6840 Health Insurance - Admin Expense
6850 HSA -Admin Expense
6860 401K Admin Company Match Expense
6900 Taxes Expense
6910 Material Waste Expense
----From here down are figured to be non-recurring---
7040 Small Tools & Equipment Expense
7080 Leasehold Improvements Expense
7100 Meals and Entertainment Expense
7110 Donations Expense
7120 Business Gifts Expense
7310 Healthcare Expense (Not Insrnc) Expense
7400 R&D Expense
7450 Software Development (Custom) Expense
7520 Education - Business Related Expense
7610 Interest Expense Expense
7650 Fraud Expense
7900 Ask My Accountant Other Expense
7910 Depreciation Expense Expense
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FireSprint is a wholesale-to-the-trade sign & graphic printer. Set up an account and let us help you!
