Chart of Accounts

The Chart of Accounts (CoA) is a structured list of all the accounts used to record your company’s financial transactions. It organizes assets, liabilities, income, expenses, and equity into a hierarchical structure for accurate bookkeeping and reporting.

To access the Chart of Accounts, navigate to Setup → Chart of Accounts from the sidebar.

Types of Accounts

The Chart of Accounts contains two types of accounts:

Ledger Accounts

Ledger Accounts are the individual accounts used for recording accounting transactions. Entries posted to these accounts appear in the General Ledger and financial reports.

Group Accounts

Group Accounts are used to organize related accounts together. They cannot be used directly for accounting transactions but help create a logical hierarchy within the Chart of Accounts.

Root Accounts

At the top level of the Chart of Accounts are the Root Accounts. These are the primary account groups under which all other accounts are organized.

The number of Root Accounts depends on the Chart of Accounts template selected during company setup.

• The Indian Chart of Accounts contains four Root Accounts.
• The Standard Chart of Accounts contains five Root Accounts.

Each Root Account is classified as either a Debit or Credit account. Every account created beneath a Root Account inherits its debit or credit nature.

Viewing Accounts

Clicking a Group Account expands it to display the accounts contained within it.

Selecting a Ledger Account opens its Quick Edit form, where you can view and update the account details.

Creating a New Account

To add a new account to the Chart of Accounts:

1. Open Setup → Chart of Accounts.
2. Hover over the Group Account where you want to add the new account.
3. Click Add Account to create a Ledger Account or Add Group to create another Group Account.
4. Enter the account name.
5. Click Save to create the account.

Choosing Between Account Types

• Use a Ledger Account when the account will be used for recording transactions.
• Use a Group Account when you need to organize multiple related accounts under a common category.

Best Practices

• Use meaningful account names that clearly describe their purpose.
• Create Group Accounts to keep related Ledger Accounts organized.
• Avoid creating duplicate accounts with similar purposes.
• Review your Chart of Accounts periodically to keep it well structured.
• Only post accounting transactions to Ledger Accounts, not Group Accounts.