Creating your Chart of Accounts
- Updated On 26 Feb 2021
- 4 Minutes To Read
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 (GL) so that you can always access these accounts.
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|
An example of GL code rules in a Chart of Accounts with a 4-tier structure is given below. Header accounts are in orange:
|12000||Short Term Assets|
|12101||Cash Branch 1|
|12102||Cash Branch 2|
Add a new Account
To add a new account to your CoA:
- On the main menu, go to Accounting > Chart of Accounts.
- On the right-hand side of the screen, select Add a New Account.
- Fill in the following information:
- 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 the heirarchy of the CoA.
- Type: choose whether the new account is an Asset, Liability, Income, Expense or Equity.
- Usage: choose 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 reporting purposes.
- Currency: when Accounting in Multicurrency feature (see below) is enabled, you can select the currency of the account.
- Allow Manual Journal Entries: when enabled, you can 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.
Accounting in Multicurrency
The Accounting in Multicurrency feature is not enabled by default. If you would like to enable this feature for your organization, please contact your Customer Success Manager.
The Accounting in Multicurrency feature has currently only been developed for Deposit Products created in a currency other than the base currency.
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
→ With Ignore Trailing Zeros disabled for header account 9900
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.
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.
You can delete an existing GL account by clicking the red minus sign next to it.