A well-designed chart of accounts for a service business limited liability corporation, or LLC, allows for easy reporting and income tax preparation. The chart of accounts is a catalog of all accounts to be used by a business during the year. It's organized to provide a centralized place to accumulate financial information. The accounts are generally identified by numbers and a brief description, such as 1010 Cash - Bank of America, 2010 Accounts Payable and 5020 Insurance Expense.
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Verify what reports you need.
A proper chart of accounts for a business service LLC should provide information for reporting internally and to external parties. You first identify what you need for tax returns and then set up the chart of accounts around this need. Then, check out other government reports, such as mba wiki sales tax or equipment reports and be sure the chart of accounts can help you in these processes. If management or investors need a specific financial report, be sure that the accounts setup in the chart can be compiled to create such a report. You may need to separate sales by type or to provide more granular information, such as sales by locations, or sales by type and you will need to create separate accounts to accumulate data in this fashion.
Assets, liabilities and equity accounts
Set up balance sheet accounts in your chart of accounts, such as assets, liabilities and retained earnings. Identify ranges for assets, such as from 1000 to 1999.
