What Is A NAIC Code?
VIDEO TRANSCRIPTION – What is an NAIC code and why do you need one? Hi, I’m Steven D. Cooper, also known as Coach Coop with Cooper’s Accounting Service because your financial freedom matters.
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Let’s define. What does an NAIC stand for? North American Industry Classification System. It is normally a two to six digit code that describes your industry. I’m gonna cover a few key aspects, but before I cover that, I had an interesting conversation with a banker that we networked together
He made a comment that your NAIC code can potentially hurt you when you apply for a loan, depending upon what industry you’re in. So you want to see, as best as possible, the broadest NAIC code that you can use. My NAIC code falls under tax accounting, and that’s relatively a broad range, but some of you may have a specific one, and talk to your tax advisor about broadening it, so that will help you qualify for a loan.
Some of the key aspects, standard system. It is a standard system for classifying business, replacing the older SIC system. Hierarchy, codes can be more specific or more districts are added. Detailing sectors, sub-sectors or industries. Purpose, used for statistical reporting, tax filing, governmental contracting and understanding economic trends.
In simple terms, it’s like a zip code for business industries, helping the government and researchers understand exactly what do you do and what is in it for the economy.
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