Event Management Industry Accounting: COA Template & Account Hierarchy

Posted In | Finance | Accounting Software | Chart of Accounts

The event management industry encompasses various types of events, such as corporate events, weddings, and concerts. Effective financial management is essential for the success of any event management business, and a key component of this process is the Chart of Accounts (COA). In this article, we will discuss the importance of a COA for event management businesses, provide an example template, and outline the account hierarchy.
 

 

What is a Chart of Accounts (COA)?

A Chart of Accounts (COA) is an organized list of all financial accounts used by a business to record and report its financial transactions. The COA serves as the foundation for the company's accounting system, enabling accurate tracking and reporting of financial activities. For event management businesses, a well-structured COA can provide insights into profitability, cost management, and areas for improvement.

 

Example COA Template for Event Management Businesses

The following is an example COA template designed specifically for event management businesses. Keep in mind that every business is unique, and your COA should be tailored to your specific needs and requirements:
 

1. Assets
 

1.1. Current Assets

1.1.1. Cash

1.1.2. Accounts Receivable

1.1.3. Prepaid Expenses
 

1.2. Non-Current Assets

1.2.1. Property, Plant, and Equipment

1.2.2. Intangible Assets

 

2. Liabilities
 

2.1. Current Liabilities

2.1.1. Accounts Payable

2.1.2. Accrued Expenses

2.1.3. Current Portion of Long-term Debt
 

2.2. Non-Current Liabilities

2.2.1. Long-term Debt

2.2.2. Deferred Tax Liabilities

 

3. Equity

3.1. Owner's Capital

3.2. Retained Earnings

 

4. Revenue

4.1. Event Management Fees

4.2. Ticket Sales

4.3. Sponsorship Income

4.4. Other Income

 

5. Expenses
 

5.1. Cost of Services

5.1.1. Venue Rental

5.1.2. Equipment Rental

5.1.3. Catering Expenses

5.1.4. Decorations and Supplies

5.1.5. Talent and Performer Fees
 

5.2. Operating Expenses

5.2.1. Salaries and Wages

5.2.2. Rent and Utilities

5.2.3. Marketing and Advertising

5.2.4. Office Supplies

5.2.5. Insurance

5.2.6. Depreciation and Amortization
 

5.3. Interest Expense
 

5.4. Income Tax Expense

 

Account Hierarchy in Event Management Industry Accounting

Account hierarchy is essential for maintaining consistency and accuracy in financial reporting. A typical account hierarchy for event management businesses consists of the following levels:
 

1. Category: The highest level in the hierarchy, representing the main divisions of the financial statement (assets, liabilities, equity, revenue, and expenses).
    

2. Subcategory: A more detailed level within the main categories, further segregating accounts based on their nature or function (e.g., current assets, non-current assets, operating expenses).
    

3. Account: The most detailed level, representing individual financial accounts used to record specific transactions (e.g., cash, accounts receivable, venue rental).

 

A well-organized Chart of Accounts is crucial for effective financial management in event management businesses. By creating a customized COA tailored to the specific needs of your event management business and establishing a clear account hierarchy, you will ensure accurate financial record-keeping, facilitate reporting, and provide valuable insights for decision-making. Event management businesses have unique accounting needs, such as tracking venue and equipment rental costs, managing catering expenses, and handling talent and performer fees. It is essential to consider these specific requirements when developing your COA. You may also want to include accounts for travel and accommodation expenses, permits and licenses, and security services, as these are common financial events in the event management industry.