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Creating your Chart of Accounts

Last Updated: Jun 10, 2015 10:11PM CEST

 

General information about the CoA

Chart of Accounts Structure

Add a new Account

Edit Accounts

Delete accounts

 

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General information about the CoA

The Chart of Accounts (CoA) will be the basis of your organization's accounting. Here you'll have all the accounts you'll need to keep track of the transactions taking place in your organization. It will make sure they're organized logically in the General Ledger so that you can always access these accounts.

The CoA has the following structure

You can create the CoA manually as described below, or you can migrate it using the Migration tool and filling the Excel template

 

 

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Chart of Accounts Structure

The CoA is structured around two different types of GL accounts, called Header and Detail accounts.

Detail accounts will be the ones that will store the transactions' balances. Whereas Header accounts are used to group Detail accounts under a same category, and have no transactions associated to them. For instance, Current Assets could be a Header account and Bank Account would be one of its detail accounts.

The GL Code of the accounts will determine which Detail accounts are nested under which Header accounts, and the overall position of a GL account in the CoA.


Basic GL code principles:

- The digits of the GL code dictate the GL account hierarchy within the CoA
- The first digit shows the initial hierarchy and position, the second the second level of hierarchy and so on.
- Header Accounts sum up every other GL Account starting with their same hierarchy level.
 

If a Header account code is  It will sum up Detail / Header accounts with codes
10000    1xxxx
11000    11xxx
11100    111xx
 
 
Example of application of GL code rules in a Chart of Accounts with a 4-tier structure (Header accounts in blue):
 
10000   Assets      
  11000   Fixed Assets    
    11001   Cars  
    11002   Furniture  
  12000   Short Term Assets    
    12100   Cash  
      12101   Cash Branch 1
      12102   Cash Branch 2
    12200   Bank  
      12201   Bank 1
      12201   Bank 2



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Add a new Account

To add a new account to your CoA, just go to Accounting > click on Chart of Accounts > Add a New Account.

 

 

In the form you'll have a few fields to fill in:

  • In Account Name enter the name you want to have associated to the new account. The name should be short but clear so that other users know exactly which account it refers to.
  • GL Code, the General Ledger Code number for the account. Determines the position of the Account in the CoA.
  • In Type you need to choose whether the new account is an Asset, Liability, Income, Expense or Equity.
  • Usage is whether this will be a Header or a Detail Account in your financial reports.
  • In Description you can add any additional information you want to have associated to the new account.

After you've entered the information above, click Create and the new account will be added to your CoA.

 

 

You can allow the manual journal entries for the account you created just clicking on the option "Allow Manual Journal Entries"

 

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Edit Accounts

You can edit an existing account at any point. You can change the name, description and code of the GL accounts. To do so, click on the icon next to the account you want to edit > make the changes > Save.

The changes will be reflected in the transactions which occurred before and after editing the account.

 

 

You cannot change the accounts' Usage. So, you won't be able to turn a Header account into a Detail account or vice-versa.

 

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Delete accounts

You can only delete accounts that never had any transactions logged against it.

 

 

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