Understanding Chart of Accounts

The Chart of Accounts (CoA) is the foundation of your accounting system. It categorises all your financial transactions into logical groups.

What is a Chart of Accounts?

Think of it as a filing system for your money. Every transaction is assigned to an account, making it easy to track income, expenses, assets, and liabilities.

Account Types

Assets (1000-1999)

Things your business owns

1050 - Current Account 1100 - Trade Debtors 1200 - Stock

<div class="p-4 rounded-lg border-l-4 border-red-500 bg-red-50 dark:bg-red-900/20">
    <p class="font-semibold text-red-700 dark:text-red-400">Liabilities (2000-2999)</p>
    <p class="mt-2 text-sm text-zinc-600 dark:text-zinc-400">Money your business owes</p>
    <div class="mt-2 flex flex-wrap gap-2">
        <span class="inline-flex items-center px-2.5 py-0.5 rounded-full text-xs font-medium bg-zinc-100 text-zinc-800 dark:bg-zinc-700 dark:text-zinc-200">2100 - Trade Creditors</span>
        <span class="inline-flex items-center px-2.5 py-0.5 rounded-full text-xs font-medium bg-zinc-100 text-zinc-800 dark:bg-zinc-700 dark:text-zinc-200">2200 - VAT Liability</span>
        <span class="inline-flex items-center px-2.5 py-0.5 rounded-full text-xs font-medium bg-zinc-100 text-zinc-800 dark:bg-zinc-700 dark:text-zinc-200">2300 - Loans</span>
    </div>
</div>

<div class="p-4 rounded-lg border-l-4 border-green-500 bg-green-50 dark:bg-green-900/20">
    <p class="font-semibold text-green-700 dark:text-green-400">Income (4000-4999)</p>
    <p class="mt-2 text-sm text-zinc-600 dark:text-zinc-400">Money coming into your business</p>
    <div class="mt-2 flex flex-wrap gap-2">
        <span class="inline-flex items-center px-2.5 py-0.5 rounded-full text-xs font-medium bg-zinc-100 text-zinc-800 dark:bg-zinc-700 dark:text-zinc-200">4000 - Sales</span>
        <span class="inline-flex items-center px-2.5 py-0.5 rounded-full text-xs font-medium bg-zinc-100 text-zinc-800 dark:bg-zinc-700 dark:text-zinc-200">4001 - Sales - Products</span>
        <span class="inline-flex items-center px-2.5 py-0.5 rounded-full text-xs font-medium bg-zinc-100 text-zinc-800 dark:bg-zinc-700 dark:text-zinc-200">4002 - Sales - Services</span>
    </div>
</div>

<div class="p-4 rounded-lg border-l-4 border-orange-500 bg-orange-50 dark:bg-orange-900/20">
    <p class="font-semibold text-orange-700 dark:text-orange-400">Expenses (5000-8999)</p>
    <p class="mt-2 text-sm text-zinc-600 dark:text-zinc-400">Money going out of your business</p>
    <div class="mt-2 flex flex-wrap gap-2">
        <span class="inline-flex items-center px-2.5 py-0.5 rounded-full text-xs font-medium bg-zinc-100 text-zinc-800 dark:bg-zinc-700 dark:text-zinc-200">5000 - Cost of Sales</span>
        <span class="inline-flex items-center px-2.5 py-0.5 rounded-full text-xs font-medium bg-zinc-100 text-zinc-800 dark:bg-zinc-700 dark:text-zinc-200">6000 - Rent</span>
        <span class="inline-flex items-center px-2.5 py-0.5 rounded-full text-xs font-medium bg-zinc-100 text-zinc-800 dark:bg-zinc-700 dark:text-zinc-200">7000 - Wages</span>
    </div>
</div>

Warning

Avoid deleting accounts that have transactions. Archive them instead to preserve your financial history.