Advanced Accounting allows owners to have the same accounting features as an accountant, including these tasks:
-
Manage the Chart of Accounts structure
- Create, edit or archive accounts in the Chart of Accounts
- Create Journal Entries
To activate Advanced Accounting, use the below steps:
- Go directly to Accounting preferences here, or select the Settings section
- Under Advanced Preferences, select Accounting
- Slide the toggle next to Advanced Accounting to turn it on. The changes will save automatically.
![Toggle enabled next to Advanced Accounting.]()
To get started with the Accounting features in FreshBooks, review the below best practices:
Chart of Accounts
The Chart of Accounts (CoA) can be accessed by going to the Accounting section, then selecting Chart of Accounts underneath. In the Chart of Accounts, you can:
- Archive accounts that are not needed
- Edit accounts with updated names, numbers, or parent / sub account locations
- Add accounts
Chart of Accounts Notes:
- The expense categories map to the Expense section and the Profit and Loss report
- Income accounts can be used together with items and services
- The balances on the Chart of Accounts do not include opening balances, and reflect the net change in balances for the date range set in the filter in the top right corner
Bank Reconciliation
In Bank Reconciliation (Bank Rec), the Bank Account Balance is recorded and FreshBooks Entries are moved from the Petty Cash (clearing) account. In Bank Rec, you can:
- Connect the bank account through the Bank Connections section
- Once connected, set the Opening Date and Balance in your Bank Rec
- Reconcile simple and complex transactions.
Bank Reconciliation Notes:
- Mark as Transfer - Use for credit card payments and transfers between connected accounts, as well as any entries that have to be recorded with a journal entry for assets, liabilities, and transactions that need to be reflected in a custom account
- Mark as Owner’s Equity - Use for owner’s draws and contributions
- Expense Refunds - Use for recording expense refunds
- Connected Accounts - Avoid writing journal entries to a connected account, this will duplicate the impact of the bank transaction
- Add, Edit, and Delete - Manually add, edit, or delete bank transactions, including missing and duplicate transactions
Custom Income Accounts
Custom Income accounts can be assigned to items and services, which are then added as line items to invoices. When using Income accounts, review these details:
- Create custom Income accounts in the Chart of Accounts, or while creating or editing an item or service
- Invoices with items and services assigned to an Income account will have the income reflected the Income account on the Chart of Accounts
- Assigning an Income account to an item or service will only apply for new invoices moving forward
- Set the Profit and Loss report’s Breakdown filter to By Account to view income by account