Welcome to my Accounting Chart of Accounts page on how to set-up the COA.
Learn how to set up a chart of accounts in QuickBooks. QuickBooks accounting software is one of the most user friendly, forgiving accounting software programs available.
It is especially so when setting up the accounting COA accounts, but QuickBooks makes it easy.
QuickBooks walks you through this process step by step. When given the option to choose an industry during the company set up process, choose the one that fits your company or the closest available. This will provide a relevant framework from which to build the individual company's chart of accounts.
Divide company accounts into the following categories and subcategories on paper. It also helps to give each account a unique name at this point.
The "other" account is for those revenues and expenses that do not relate directly to the business of the company.
These would include income from interest on notes receivable, or gain or loss on the sale of company assets.
The "suspense" account will hold any items that you are not sure how to record until you can determine how they should be reported.
This is an easy but necessary step. To number accounts, first select the company you are going to be working in.
From there go to edit> preferences> accounting>company preferences>use account numbers.
QuickBooks accounting software automatically sets number ranges for the various types of accounts.
Now you find yourself with a basic framework for a Chart of Accounts that you need to personalize to your company, and a list of accounts that need to be included in order to be specific to your company. Compare the list you made in step 2 to the Chart of Accounts automatically generated by the program during the company set up process. Delete, edit, and add accounts as necessary to ensure the chart includes all of the accounts on your list.
To delete an account, click on the account in the chart of accounts, and then choose to delete. To change the name, simply click on edit instead of deleting and type in the new name. To add a new account, choose the "new" option rather than the "delete" or "edit" options.
For income tax return purposes, certain accounts can be grouped, such as electricity, water, and gas under "Utilities." For management purposes, more detail is needed. QuickBooks accounting software allows for the use of sub-accounts for just this reason. To create sub-accounts, go to company>chart of accounts> highlight the sub-account> select account> edit account>choose the "sub account of" option> then select the desired parent account. Reports will show either parent account totals only, or they can show more detail that include parent account totals as well as each subaccount and its respective total.
Setting up a Chart of Accounts in QuickBooks does not have to be overwhelming. It may take a little time, but following these steps will ensure you get the best start and get it done as quickly as possible.
Setting up an accounting chart of accounts in QuickBooks can feel like a daunting task but remember that you are taking a significant step towards organizing and managing your business's finances effectively. Here are some words of encouragement to boost your confidence and motivate you throughout the process:
Remember, setting up a chart of accounts in QuickBooks is a vital step in establishing a solid financial foundation for your business. Embrace the challenge, seek guidance when needed, and stay focused on the positive impact it will have on your business's financial management. With determination and perseverance, you can conquer this task and set your business up for financial success.