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itai@teragen.io
August 21, 2024
Question

Can I add new accounts for the chart of accounts?

  • August 21, 2024
  • 1 reply
  • 0 views
I'm trying to organize my chart of accounts but haven't had much success. My goal is to create a structured system where every expense or revenue item can be recognized and categorized across multiple levels of accounts. I want to break down each expense or revenue into 4-5 levels for better clarity and tracking. Here's how I envision the structure:

For example, if I receive a bill from GitHub (a developer software), I want to classify this expense as follows:

Level 1: Expenses (main category)
Level 2: R&D Department (department or function)
Level 3: Software (subcategory within the department)
Level 4: GitHub (specific account or vendor)
Another example would be a payroll expense for an employee in the marketing department:

Level 1: Expenses (main category)
Level 2: Sales & Marketing Department (department or function)
Level 3: Salaries and Ancillaries (subcategory within the department)
Level 4: Social Security Monthly Payment (specific type of expense)
Could you guide me on the best way to set up and organize this system to ensure that every transaction is accurately classified and easy to track?

Thank you!

1 reply

C
CamelleT
August 21, 2024

Hi there, Itai.

 

Yes, you can add new accounts in the Chart of Accounts. To ensure that every transaction is accurately classified, you may utilize the creation of accounts and sub-accounts. You may also use classes to track transactions by department. This allows clearer insights into your sales, expenses, or profitability by business segment.

 

Using the Class tracking feature with a structured Chart of Accounts permits better tracking and reporting across multiple dimensions of your company when running financial reports.

 

Bill from GitHub

 

For level 1, set it up as a parent expense account . Here's how:

 

  1. Go to Transactions and select Chart of accounts
  2. Click New.



  3. Enter an Account name.
  4. Select an Account type and Detail type.
  5. You may add a description for reference.
  6. Hit Save.


 

For level 2, set it up as a parent class.

 

  1. Click the Gear icon and pick All Lists.



  2. Select Classes.



  3. Click New. 



  4. Then, give this class a name. Tap Save.




For level 3, set it up as a sub-class of level 2. 

 

  1. Go to Settings and select All Lists.
  2. Choose Classes.
  3. Click New. Provide a class name.
  4. Select Is a sub-class and pick the main class. 



  5. Hit Save.

 

For level 4, set up GitHub as a vendor.

 

  1. Go to Expense and pick Vendors.



  2. Tap New Vendor.



  3. Complete the fields and hit Save.


 

Enter the bills you receive into the parent expense account. Then, assign the parent/sub-class you set up for level 2.

 

When setting up payroll expense accounts, it's best to consult with your accountant. They can guide you in choosing the right account and detail type. Additionally, please note that while we can provide technical input on organizing your Chart of Accounts, it's also best if you refer to them for proper guidance.

 

If you have other questions, please add them below. I'll be around to respond promptly.

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