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ProCash, an Economic Model for Income Properties

Creating or Modifing Inputs

Suggestions for the Use of a Chart of Accounts

A chart of accounts must work for several purposes. It must work to enable the business to be managed well, and in that regard must reflect the issues and items that management at all levels feel are important. It must also work administratively. It must work to provide information needed to serve contract administration. It must be understandable and workable to those who will do the coding, and thus not overly complicated. And it must work to satisfy generally accepted accounting principles. It should also not be changed lightly. Usually one person, the controller, is designated as the person responsible for approving all chart of account changes.

Suggestions for how the coding system might work.

Never post to a number adding in zero. Numbers adding to zero are roll-up levels.

Don't assign numbers, as, for example, 8801. This would roll-up to 8800, just as all the numbers from 8801 thru 8899 would. Better to use 8811, skipping all the numbers from 8801 thru 8809.

Very rarely is it right to assign a special chart of accounts number to a particular vendor. There will be too many of them, and they will change too often. Instead create another field for assigning vendor, client, lender, tenant, or whatever entity the transaction involves. Partners might, however, get their own chart of accounts code in some cases, as who they are does not change often and their accounts must be kept in accord with distributions of profits and losses and recognition of their basis.

Numeric codes are preferable, because computers can process numeric codes faster and with less likelihood of error on the part of the people who use the computer. The computer system should ask the operator to affirm names of vendors and chart of account codes when numeric codes are entered, to reduce errors.

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