Reduce the number of general ledger accounts. The number of general ledger accounts tends to grow over time as business divisions or new expense categories are added. Having many accounts gives the accounting staff too many similar ones to choose from when creating journal entries, which can result in erroneous entries to the wrong accounts. Finding and fixing these entries is extremely time-consuming. To avoid this issue, prune the number of general ledger accounts on a regular basis by merging similar accounts.

Use identical charts of accounts for subsidiaries. When a company acquires other entities, it typically allows them to retain their own charts of accounts. The parent company then must either incorporate each additional account code into its own general ledger for consolidation purposes or develop a complicated consolidation table to convert each subsidiary’s accounts. Though it’s initially more time-consuming, the parent company should require subsidiaries to adhere to the master chart of accounts, making the month-end roll-up process easier.

Restrict use of journal entries. In larger accounting departments, allowing multiple employees to create journal entries often results in confusion. CPAs should recommend a better approach: to restrict access to a single user so all journal entries flow through and are tracked by just one person.

Use a standard journal entry list. It is impossible to issue consistently reliable financial statements unless exactly the same journal entries are used every month. The assistant controller should create a standard journal entry list from those transactions that have been used repeatedly in prior months and check off items from the list as part of the standard month-end closing process.

Use boilerplate journal entries. Most accounting software packages allow users to create boilerplate journal entries. Staff accountants should use this feature; it ensures that every journal entry uses exactly the same account codes every month, resulting in consistent account usage.

Modify the general ledger to accommodate ABC information. If a company uses activity-based costing (ABC), much of the information it accumulates varies considerably from the data that are stored in the traditional chart-of-accounts structure and maintained in electronic spreadsheets. This “off-site” data storage may be acceptable if the ABC system is used only for individual projects. If it’s used on a regular basis, though, cost accountants should consider creating accounts for the new ABC data in the chart of accounts. This will result in a more formal data storage system and likely will yield more consistent ABC information.