Customizing the chart of accounts

 

 The chart of accounts is at the heart of any QuickBooks Online file. Although you can choose a default chart of accounts when you sign up a client, you and your client may still need to customize it to meet the needs of their business.

 

The benefits of having a customized chart of accounts

Setting up a client’s chart of accounts correctly in QuickBooks Online means paying attention to their business’s needs and business profiles. Some clients may not want to include accounts that do not apply to their business. Still, they may need new accounts that are specific to their industry or unique to their business. 

As a ProAdvisor, you can help your clients reflect their needs in the way you set up their chart of accounts (COA).

How can you and your clients customize their chart of accounts?

As well as adding accounts, edits to a default chart of accounts can include: 

• Editing the names of default accounts  
• Adding account numbers 
• Merging duplicate accounts 
• Making unused or redundant accounts inactive (Note that you can’t delete an account) 
•  

Sample client A

Client A is a sole proprietor with no employees and isn’t eligible for corporate tax. Their primary focus when it comes to data and reporting is customer profitability. 

The reports that this client is most interested in are: 

• Profit and Loss by Customer 
• Un-invoiced Charges 
• Balance sheet 
• Accounts Receivable Aging  

So, how should you set up the chart of accounts for this client?

Because the client deals with job-related expenses in their business, they have two materials accounts on their COA:

1.     Job Materials (Purchases): used for categorizing reimbursable expenses used on billable jobs

2.     Materials and Supplies (Overhead): used for categorizing other non-customer-related purchases

Sample client B

Client B is a real estate investment company with a portfolio of multiple properties.

So, how should you set up the chart of accounts for this client?

Their chart of accounts needs to reflect the business. So, they have individual accounts for each of their mortgages and a combined property income account with expense subaccounts for each property. They even have an account to record the escrow costs related to the purchase costs to keep track of when they sell a property. 

 

To enable account numbers: 

1.     Select the Gear icon, then Account and settings 

2.     Select the Advanced tab from the left 

3.     Select anywhere in the Chart of accounts section to enable editing 

4.     Move the slider next to the Enable account numbers option. Note that this setting will affect all users in the client’s company

5.     Next, check the Show account numbers option. This setting allows account numbers to show on the chart of accounts and on reports. If it is not selected, account numbers will be hidden on reports—but clients will still be able to search for an account by number when they record transactions

6.     Select Save  

7.     Then select Done 

QuickBooks Online now allows account numbers in the chart of accounts. It may automatically assign account numbers, but these can be changed if needed.

To do this: 

1.     Select the Gear icon, then Chart of accounts 

Alternatively, select Accounting from the left-hand navigation and select Chart of accounts

2.     Select the Pencil icon above the Action column

3.     In the Number column, enter the desired account numbers. These can be up to twenty digits long

4.     When done, select Save