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 organisation. Usually gathered together in to groups that represent types of accounting data. When an account is added the group to which it belongs, it 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
- Current Assets - Cash/Undeposited Receipts
- Fixed Asset Accounts (machinery, equipment, Intellectual property)
- Fixed Assets - Intangibles
- Fixed Assets - Long Term Investments
- Fixed Assets - Tangibles
- Current Asset Accounts (Stocks, Customer Accounts)
- Current Assets - Debtors
- Current Assets - Others
- Current Assets - Short Term Investment
- Current Assets - Stock
- Liability Accounts (Supplier Accounts, Payroll & Tax Liabilities, Provisions, Borrowings)
- Liability - Credit Card
- Liability - Current
- Liability - Long Term
- Liability - Long Term Loans
- Liability - Short Term Loans
- 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
- 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:
|Sale||Income||Bank or Customer Account|
|Purchase||Expense||Bank or Supplier Account|
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 organisation was first set up by choosing a template on the Accounting Options tab of the organisation profile.
Adding new accounts or deleting existing accounts can further customise this chart.
Viewing the Chart of Accounts
All the accounts in the organisation's 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 Menu lists the Account Types. Select an account type to list all accounts of that type in the chart of accounts. The display provides an Action Box, Key Account Monitor button, the Account Name, Account Type, and the Balance on the account. For Income and Expenditure accounts the cumulative balance in the current financial period is displayed.
Where the use of ledger codes in data input has been selected on the Organisation Profile then each account name is displayed with a ledger code. If a code is missing or the user wishes to make changes then click the button. Note that the button is not displayed where ledger codes are not being used.
See Ledger Codes for more information.
A number of actions can be selected from the box. Those actions available will depend on the account type so not all will be visible.
- View Ledger
- Opens the transaction register for the account and allows for editing or viewing transactions
- Configure Account
- Opens the account set-up and configuration options. See Account Details Maintenance
- If no transactions have been posted to the account then it may be deleted
- Statement Import (Bank/Credit Card Accounts only)
- Moves directly to the bank statement import process and screens for the account
- Import Rules(Bank/Credit Card Accounts only)
- Bank statement import rules for this account can be created and maintained
- Reconcile (Bank/Credit Card Accounts only)
- Open the manual bank reconciliation screen
Key Account Monitor button
Click on the target symbol (so the centre is solid) to display the account summary on the organisation home page. Click so that the centre is open to remove the account from the home page.
Add 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 Standard Accounts
A list of standard accounts available is shown. Tick the Add box on the right for all those accounts required. Click on OK 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:
- Toggle the monitor switch option to display the balance of the account on the home page
- As the account will be active leave the toggle as Active
- Name the account in Account Name
- Enter or amend a ledger code if being used. The field will not be visible if ledger codes are not used
- Select the Account Type from the drop down box. If you are not sure as to the account type, seek guidance from your advisor
- Non-posing Account, the system has some accounts that cannot be posted to by default, a user may also designate an account as non-posting (usually a summary account) by ticking the box.
- Select from drop-down list if the account being created is a Sub-Account of an existing account
- The TB Cross Reference field is used to relate to an alternative chart of accounts. You would not normally enter a value here unless your advisor has asked you to. This field is useful if your advisor has their own standard chart of accounts defined for generation of statutory year-end accounts.
- An Import Cross Reference can be entered here and is used in conjunction with any upload processes
Click the SUBMIT 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.
- A Default VAT rate may be selected
- A VAT recoverable flag can be set to non-recoverable
- 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: -
- Media Assets
- Media Assets - Costs
- Media Assets - Depreciation
- Media Assets - Revaluation
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.