Chart of Accounts

A chart of accounts is a list of all the accounts (categories) that is used to gather and record accounting data for an entity. Usually gathered together in to groups that represent types of accounting data. When an account is added the group to which it belongs is determined by selecting an account type.

Groups and selectable account types included in the Balance Sheet: -

Bank and Credit Card Accounts
Current Assets - Bank Account
Fixed Asset Accounts (machinery, equipment, Intellectual property)
Fixed Assets - Intangibles
Fixed Assets - Long Term Assets
Fixed Assets - Tangibles
Current Asset Accounts (Stocks, Customer Accounts)
Customer
Current Assets - Debtors
Current Assets - Others
Current Assets - Short Term Investment
Current Assets - Stock
Liability Accounts (Supplier Accounts, Payroll & Tax Liabilities, Provisions, Borrowings)
Supplier
Liability - Credit Card
Liability - Current
Liability - Long Term
Liability - Long Term Loans
Liability - Short Term Loans
Provisions
Shareholders Equity, LLP Member, Sole Traders Capital Accounts or Fund Accounts
Shareholders Funds (in a Ltd Company)
Members Debts (in a LL Partnership
Members Loans (in a LL Partnership
Members Other Interests (in a LL Partnership
Capital (in a Sole Trader)
Funds (in a Charity)

Groups included in a Profit and Loss Statement or SOFA (Statement of Financial Activities)

Income Accounts (Sales and other Income)
Income UK
Income Non UK
Income Other
Expenses Accounts
Expense
Expenses Other

All business financial transactions will have an impact in two or more accounts and accounting groups. This is commonly known as Double Entry. Examples are:

Examples of Double Entry
Item Affects Affects
Sale Income Bank or Customer Account
Purchase Expense Bank or Supplier Account
Borrowing Bank Liabilities

These impacts are dealt with automatically when a transaction is entered, except in the case of a journal entry where specific information is required.

Setting up the Chart of Accounts

An initial and relevant chart of accounts was selected when the new entity was first set up. In the entity details tab an accounts template was selected. Adding new accounts or deleting existing accounts can further customise this chart.

Viewing the Chart of Accounts

All the accounts in the entity Chart of Accounts can be viewed. In addition two other options exist in the menu. Add from Standard Accounts allows the addition of an account to the chart from a system standard list. If an account is required that is not available from the standard list a customised account can be created by using Add a Custom Account. See below for more details on both options.

What is in the Accounts Display List

The Accounts display lists the all the accounts or the filtered list. The display provides the Account Name, Account Type, P11D section letter and the Balance on the account. For P/L accounts the cumulative balance in the current financial period is displayed.

The VIEW button will access the transaction register for the selected account. The individual transactions can be viewed or edited depending on status. A printable PDF report can be accessed by clicking the PDF button. The date range will be the current financial period. Modify the date range if required.

Where it exists the EDIT button may allow the profile of the account to be amended. The profile of most accounts has been pre-determined by the system or your advisor and can only be changed or amended by your advisor. If an account has been added as a custom account, then the user has full access to profile maintenance. Clicking on the radio button icon toggles placing the account balance on the Home page of the entity The DEL Button allows for an account to be deleted from the Chart of Accounts for the entity. It may only deleted if there are no transactions associated with the account.

Add from Standard Accounts

If an account you require is not available in the current Chart of Accounts, look to see if that account is in the standard list and add it from there.

Accounts - Add From Standard Accounts

A list of standard accounts available is shown. Tick the Add box on the right for all those accounts required. Click on SUBMIT at the bottom of the page to add the accounts to the Chart of Accounts.

Add a Custom Account and cross references

If an account you require is not available in the current Chart of Accounts, or available from the standard list a custom account can be created.

Accounts - Add a Custom Account

The Edit account details screen is shown:

Click the SUBMITt button to confirm the account.

If the account is an Expense account some other items exist, you are strongly recommended that you consult your advisor before setting these parameters.

  1. A Default VAT rate may be selected
  2. A VAT recoverable flag can be set to non-recoverable
  3. P11D Classification allows expense items to appear on a P11D report if at the time the transaction is entered an employee/director is also selected.

Certain other account types have other parameters that may be selected or entered.

Fixed Asset - Tangibles

Although a number of pre-defined tangible fixed asset accounts exist a user may have customised tangible fixed asset name and description accounts. Create accounts as above, selecting the Account Type as Fixed Assets-Tangibles. So for example a user could create a new fixed asset group such as: -

When an asset is added to the asset register the Accounts tab on the maintenance screen allows a user to define where the asset ledger accounting is recorded.

Current Asset - Bank Accounts and Current Liability-Credit card

The user can enter an opening balance and opening balance date, as well as configuring for electronic statement uploads.

Current Asset - Debtors and Liability Current

The user can add information on an employee loan and whether it is to be included in a P11D return. If you are unsure on any item you are recommended to consult an advisor.

Editing an Account Details

The profile details of many standard and all custom accounts can be amended. Click the EDIT button and the Edit Account Details screen is displayed with the current account details.