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      What Is the Chart of Accounts?

      The Chart of Accounts (CoA) is a customizable and unique list of all the accounts in FreshBooks in which transactions are recorded. The accounts that appear in the CoA will also appear in the General Ledger Report, where you can see transactions in more detail. Where the CoA provides a great overview of your business’ accounts, the General Ledger shows you the details of transaction movement in and out of those accounts.

       

      Advanced Accounting and customizable Chart of Accounts is only available for certain users on Plus, Premium and Select plans for now. Our Product Team is working on updates to make this available in the near future. Interested in trying this? Join the priority waitlist here.

       

       

      Access the Chart of Accounts

      The Chart of Accounts can be accessed by either going to: 

      • Click on the Accounting section, then click on the Chart of Accounts sub-tab underneath Accounting
        Chart of Accounts under Accounting in the navigation menu.
      • Click on the Accounting section, then scroll to Chart of Accounts and click on the View Your Accounts button
        ViewYourAccountsButton.png

       

      To adjust your view of the CoA, you can either:

      • Click on the Filters button to adjust your view
        Filters on the chart of accounts.
        • Date Range - Choose from This Year, This Quarter, Last Quarter, or Custom to enter a date range instead (Jan 1, 2018 is the earliest date we can retrieve data from currently) - if you’ve changed your Fiscal Year End date, you can also choose from the extra options
        • Currency - Choose between individual currencies

      • Toggle between All Accounts, or by Account Type with the Asset, Liability, Equity, Income or Expense tabs
        Tabs above the main chart of accounts showing each section of the chart of accounts.

       

      If you need to look at transactions more closely, in the top right corner, click on More Actions, and then click on General Ledger to be taken to the General Ledger Report.

       

      Default Chart of Accounts 

      The CoA is organized by the industry standard, Generally Accepted Accounting Principles (GAAP), and is sorted by Account Type and Account Sub-Type first, with Parent Accounts and Sub Accounts underneath.

      Account Types

      • Asset - A resource that your business owns, like cash in hand, prepaid expenses or office equipment
      • Liability - What your business owes to others
      • Equity - The value of your business, including investments into and withdrawals from your business; what remains after liabilities are deducted from assets
      • Income - Revenue your business earns
      • Expense - Costs incurred by your business

       

      Account Type Account Sub Type Parent Account Account / Sub Account
      Asset Cash & Bank Cash* Petty Cash*
      Bank Account (if added)*
      Current Asset Accounts Receivable*  
      Customer Deposits  
      Deferred Discounts*  
      Deposits  
      Prepaid Expenses  
      Property, Plant and Equipment Property, Plant and Equipment Furniture
      Furniture - Accumulated Depreciation
      Office Equipment
      Office Equipment - Accumulated Depreciation
      Liability Current Liability Accounts Payable*  
      Accruals Accrued Payroll
      Accrued Rent
      Credit Cards* Credit Card (if added)*
      Customer Credit*  
      Taxes Payable Income Tax Payable*
      Property Tax Payable*
      Custom Taxes Payable Account (if added)*
      Sales Tax Name (if added)*
      Unearned Revenue*  
      Equity Equity Common Stock  
      Opening Balance Opening Balance Adjustments*
      Owner's Equity*  
      Retained Earnings* Dividends
      Income Income Revenue Billed Expenses*
      Discounts*
      Sales*
      Sales Credits
      Uncategorized Income*
      Expense Costs of Goods Sold Costs of Goods Sold Costs of Goods Sold (general)
      Cost of Billed Expenses
      Cost of Shipping & Handling
      Operating Expense Advertising  
      Cars & Truck Expenses Car & Truck Expenses (general)
      Gas
      Mileage
      Repairs
      Vehicle Insurance
      Vehicle Licensing
      Contractors  
      Education and Training  
      Employee Benefits Employee Benefits (general)
      Accident Insurance
      Health Insurance
      Life Insurance
      Meals & Entertainment Meals & Entertainment (general)
      Entertainment
      Restaurants & Dining
      Office Expenses & Postage Office Expenses & Postage (general)
      Hardware
      Office Supplies
      Packaging
      Postage
      Printing
      Shipping & Couriers
      Software
      Stationery
      Other Expenses Other Expenses (general)
      Bank Fees
      Business Insurance
      Commissions
      Depreciation
      Interest - Mortgage
      Interest - Other
      Online Services
      Reference Materials
      Repairs & Maintenance
      Subscriptions/Dues/Memberships
      Taxes & Licenses
      Wages
      Personal  
      Professional Services Professional Services (general)
      Accounting
      Legal Fees
      Rent or Lease Rent or Lease (general)
      Equipment
      Machinery
      Office Space
      Vehicles
      Supplies  
      Travel Travel (general)
      Airfare
      Hotel/Lodging/Accommodations
      Taxi & Parking
      Uncategorized Expenses*  
      Utilities Utilities (general)
      Gas & Electrical
      Phone
      Sales Taxes Paid* Sales Tax Name (if added)*

      *System Account or Automatically Created Account which are required for recording automated transactions in FreshBooks, and have additional restrictions covered below.

       

      Parent Accounts

      An example of two Parent Account called Cash and Accounts Receivable.

      • Each Parent Account has an icon and has accompanying Sub Accounts underneath
      • A default unique multi-digit Account Number is automatically assigned based on the account type
      • All the FreshBooks Balances listed in each Account underneath makes up the Net Movement of the Parent Account for the selected date range
      • Transactions posted directly to the Parent Account will appear in the [Parent Account] (general) Sub Account (e.g., posting to Revenue Parent Account will create a new Revenue (general) Sub Account)
      • Creating a Sales Tax will automatically create Sales Tax Name Accounts under:
        • Taxes Payable Parent Account - When the Sales Tax is applied to a Service or Item on an Invoice, Other Income, or on applicable Credits
        • Sales Taxes Paid Parent Account - When the Sales Tax is applied to an Expense or Bill

       

      Sub Accounts

      An example of a Sub Account, called Petty Cash.

      • Appear underneath each Parent Account
      • A default unique multi-digit Account Number is automatically assigned based on the account type
      • Transactions are recorded in every Sub Account where applicable, common actions like creating an Invoice and applying a Payment will automatically post transactions to Sub Accounts in your CoA
      • Setting a starting balance in Bank Reconciliation will automatically create these default Sub Accounts:
        • A Bank Account is created under the Cash Parent Account
        • A Credit Card Account is created under the Credit Cards Parent Account

       

      Restricted Accounts

      The below two types of Accounts are required to record automated transactions in FreshBooks and have restrictions to minimize errors in your financial reporting:

        System Accounts Automatically Created Accounts
      Accounts Impacted
      • Cash
      • Petty Cash
      • Accounts Receivable
      • Deferred Discounts
      • Accounts Payable
      • Credit Cards
      • Customer Credit
      • Unearned Revenue
      • Opening Balance Adjustments
      • Owner’s Equity
      • Retained Earnings
      • Billed Expenses
      • Sales
      • Discounts
      • Uncategorized Income
      • Uncategorized Expenses
      • Bank Accounts added via Bank - Connections
      • Credit Card Accounts added via Bank Connections
      • Tax Payable + associated Sub Accounts
      • Sales Tax Paid + associated Sub Accounts
      Restrictions
      • Archive or Delete

      • Change Account Type or Account Sub-Type

      • Rename or Move Uncategorized Expenses Account

      • Archive or Delete
      • Change Account Type or Account Sub-Type
      • Rename
      • Remove from Parent Account

       

      Manage Accounts

      Add Accounts

      Once an Account is added, Journal Entries can be posted to it. Create an Account with these steps:

      1. With Advanced Accounting enabled, or as an Accountant, click on the Accounting section
      2. Then click on the Chart of Accounts sub-tab underneath Accounting
      3. Click on More Actions
      4. Then select Add New Account
        Add new account with fields to fill out.
      5. Under Account Type, choose between Asset, Liability, Equity, Income or Expense
      6. Next, under Account Sub Type, choose from the available options based on your Account Type as needed
      7. Then choose between Parent Account or Sub Account
        1. If Sub Account is chosen, in the Group Under Parent Account dropdown, select the Parent Account you want this new Sub Account to be organized under
      8. Next, enter an Account Name
      9. Then enter the unique Account Number, which is automatically populated for you but can be overwritten
      10. If needed, add in details in the Description field
      11. Click Save to create the new Account. 

       

      Edit Accounts

       

      Before making any edits to Accounts, we recommend consulting with an Accountant and reviewing the restrictions for certain Accounts first. Making changes will impact Reports.

       

      Edit any custom Accounts as well as some default Accounts in order to do any of the following:

      • Move to a different Parent Account
      • Change the Account Name or the Account Number
      • Turn a Sub Account into a Parent Account
      • Update the description

       

      After checking with your Accountant and reviewing the restrictions for certain Accounts, edit Accounts with these steps:

      1. With Advanced Accounting enabled, or as an Accountant, click on the Accounting section
      2. Then click on the Chart of Accounts sub-tab underneath Accounting
      3. Next, either:
        1. Hover over any Account and click on the pencil icon to edit it
          Edit button next to the account.
        2. Or click on any Account, then click on the More Actions button and select Edit.

       

      Notes:

      • Parent Accounts - Parent Accounts must not have any Sub Accounts underneath it before becoming a Sub Account; otherwise all Sub Accounts underneath must also be removed (either to another Parent Account or become Parent Accounts of their own)
      • Sub Accounts - To remove a Sub Account from a Parent Account, edit the Sub Account and turn it into a Parent Account or move it to a different Parent Account instead

       

      Archive & Unarchive Accounts

      Archive Accounts that you no longer use to keep your Chart of Accounts organized. This will not change your Reports, and can be done with the below steps:

      1. With Advanced Accounting enabled, or as an Accountant, click on the Accounting section
      2. Then click on the Chart of Accounts sub-tab underneath Accounting
      3. Next, either:
        1. Hover over any Account and click on the box icon to archive it
          Archive button next to the account.
        2. Or click on any Account, then click on the More Actions button and select Archive
      4. Confirm the action by checking off the boxes and clicking Archive to finish.

       

      Once an Account is archived:

      • The archived Account no longer appears in the Chart of Accounts, in dropdowns while adding or editing an Account, or while creating a new Journal Entry
      • All transactions will remain in the archived Account and your reporting will not change
      • Archived Sub Accounts will remain connected to the Parent Account
      • Archived Parent Accounts with Sub Accounts underneath will be archived as well

       

      Unarchiving an account can be done by:

      1. With Advanced Accounting enabled, or as an Accountant, click on the Accounting section
      2. Then click on the Chart of Accounts sub-tab underneath Accounting
      3. Scroll to the bottom of the Chart of Accounts and click on the View All Archived Accounts button
      4. Next, either:
        1. Hover over any Account and click on the arrow icon to unarchive it
        2. Or click on any Account, click on the More Actions button and select Unarchive
      5. Click on Unarchive to confirm and click on All Accounts to go back to your Chart of Accounts. The unarchived Account will now appear in your Chart of Accounts.

       

      FAQs

      Can I change the Account that is affected when I enter an Expense or apply a Payment in FreshBooks?

      When you enter common transactions like Expenses or Payments, FreshBooks automatically posts accounting entries to specific default Accounts in your CoA.

      The process of completing Bank Reconciliation (Bank Rec) will assign transactions to the correct Account in the CoA. Your Accountant can also reassign any transaction entered to other Accounts in the CoA with Journal Entries.


      Why is there a large balance in my Petty Cash Account?

      FreshBooks uses Petty Cash as a clearing account, with many transactions flowing through it before they are reconciled in Bank Reconciliation (Bank Rec). If not using Bank Rec, the Petty Cash account is used as a catch-all for transactions instead of a Bank Account or Credit Card Account.


      Can I import an existing Chart of Accounts?

      While you cannot import an existing Chart of Accounts from another source, you (through Advanced Accounting), or your invited Accountant can customize your Chart of Accounts by adding new Accounts as needed.


      Where do I enter the beginning balances in my Chart of Accounts if I’m moving my finances from a different accounting system?

      Account Balances can be added to your CoA by having your Accountant create Journal Entries to the specific default Accounts. In the notes of the Journal Entries, include the cut-off date of when you made the transition from the old system to FreshBooks.

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