Your chart of accounts is the key or legend to your financial statements—it dictates the organizational structure for categorizing every transaction related to your business.
Here’s an example of the out-of-the-box inDinero Chart of Accounts:
Choosing a Chart of Accounts
If you’re in the onboarding process or changing your financials from cash to accrual, you’ll want to consider your chart of accounts carefully. You have a few options:
- Use our basic chart of accounts templates (attached, below) —these work for most businesses.
- Use your prior/existing chart of accounts—send us a copy to keep consistent.
- Use our template and customize—if you want a little more specificity to your business
No matter which option you decide to go with, the goal is to choose a Chart of Accounts structure that will keep your business’s financial data as organized as possible.
Chart of Accounts Basics
Your chart of accounts (COA) is a listing of all accounts—which are like categories—that our bookkeepers and accountants use to organize your financial transactions from your general ledger in a way that provides value to you as a business owner.
Your chart of accounts determines what useful categories are displayed so that you and your partners, investors, accountants, and tax preparers can understand your financial activity.
For example, you may want to have multiple categories of revenue, like recurring subscription services versus one-off sales, or you may want to track specific R&D expenses.
All COA’s have the same basic structure:
These five types of accounts are shown across your two most important and most widely used financial reports, the P&L (revenue and expenses) and Balance Sheet (Assets, liabilities, and equity).
Each of these types of accounts is subdivided into accounts and subaccounts to more accurately tag and represent your financial activity.
Updating your chart of accounts
At any time, we can add, remove, or rename any account. Because changes to the chart of accounts can impact your reports immensely, please reach out to your accounting team to make any changes. We’ll evaluate the impact and make the change for you.
Chart of Accounts Templates
- If you're on cash accounting, use the Basic Cash chart of accounts
- If your books are on the accrual accounting method, take a look at the Basic Accrual chart of accounts.
- If you have inventory, start with the Inventory chart of accounts.