Creating your Chart of Accounts
  • 27 Jan 2020
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Creating your Chart of 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.

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

Chart of Accounts view with All, Assetsm Liabilities, Equity, Income and Expenses tabs


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 into categories 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 is It will sum up Detail/Header accounts with codes
10000 1xxxx
11000 11xxx
11100 111xx
↑ The example above assumes that all header accounts are set to ignore trailing zeros

An example of GL code rules in a Chart of Accounts with a 4-tier structure is given below. Header accounts are in orange:

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
12205   Bank 2

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.

Chart of Accounts tab - Income Tab - Add a New Account button.

In the form you'll have a few fields to fill 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. This determines the position of the Account in heirarchy of the CoA.
  • 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. Header Accounts are used to organise and group any Detail accounts under them for reports.
  • Allow Manual Journal Entries: when enabled, users will be able to manually add new journal entries to this account from the Journal Entries tab (only available for Detail Accounts)
  • Ignore Trailing Zeros in Reports Calculations: see below for details (only available for Header Accounts)
  • 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.

Adding a General Ledger Account with mandatory fields.

Ignore Trailing Zeros

By default Ignore Trailing Zeros will be enabled meaning that if you had a header account with the GL Code 9900, balances from any Detail Accounts starting with 99, for example 99023, 9945 or 990067 would be included when calculating totals for this Header Account. If the option is disabled, then the trailing zeros would not be ignored when matching to Detail Accounts so only the balance of the account 990067 would be summed up for this header.

→ With Ignore Trailing Zeros enabled for header account 9900
chart of accounts header account with ignore trailing zeros enabled

→ With Ignore Trailing Zeros disabled for header account 9900
chart of accounts header account with ignore trailing zeros disabled

Depending on how your Chart of Accounts is structured you can decide which option works best for you when setting up your General Ledger Accounts in Mambu.


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 all transactions which occurred before and after editing the account.

Edit GL Accounts - pencil button found on each row.

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

Delete accounts

You can delete an existing GL account by clicking the red minus sign next to it.
Delete GL Accounts - minus button found on each row

Please Note
You can only delete accounts which have never been used, i.e. they have been not linked to any product and there have been no manual journal entries entered for them.
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