Chart of Accounts Setup (Import & Setup).

Created by Judy Macharia, Modified on Sun, 24 Sep, 2023 at 9:43 AM by Judy Macharia

The Chart of Accounts (CoA) will be the basis of your organization's accounting. Here you'll have all the accounts you'll need to keep track of the transactions taking place in your organization. It will make sure they're organized logically in the General Ledger so that you can always access these accounts.

The CoA has the following structure

You can create the CoA manually as described below, or you can migrate it using the the Excel Template.

Chart of Accounts Structure

The CoA is structured around two different types of GL accounts, called Header and Detail accounts.

Detail accounts will be the ones that will store the transactions' balances. Whereas Header accounts are used to group Detail accounts under a same category, and have no transactions associated to them. For instance, Current Assets could be a Header account and Bank Account would be one of its detail accounts.

The GL Code of the accounts will determine which Detail accounts are nested under which Header accounts, and the overall position of a GL account in the CoA.

Basic GL code principles:

The digits of the GL code dictate the GL account hierarchy within the CoA
The first digit shows the initial hierarchy and position, the second the second level of hierarchy and so on.
Header Accounts sum up every other GL Account starting with their same hierarchy level.

Of application of GL code rules in a Chart of Accounts with a 4-tier structure (Header accounts in blue):

Add a new Account (Manual Setup of CoA)

To add a new account to your CoA, just go to Accounting > click on Chart of Accounts > Add a New Account.

In the form you'll have a few fields to fill in the:

Account Name enter the name you want to have associated to the new account. The name should be short but clear so that other users know exactly which account it refers to.
GL Code , the General Ledger Code number for the account. Determines the position of the Account in the CoA.
Type you need to choose whether the new account is an Asset, Liability, Income, Expense or Equity.
Usage is whether this will be a Header or a Detail Account in your financial reports.
Allow Manual Journal Entries check box
Description you can add any additional information you want to have associated to the new account.

After you've entered the information above, click Create and the new account will be added to your CoA.

Please Note - You can allow the manual journal entries for the account you created just clicking on the option "Allow Manual Journal Entries"

Edit Accounts

You can edit an existing account at any point. You can change the name, description and code of the GL accounts. To do so, click on the icon next to the account you want to edit > make the changes > Save.

The changes will be reflected in all transactions which occurred before and after editing the account.

Please Note - You cannot change the accounts' Usage. So, you won't be able to turn a Header account into a Detail account or vice-versa.

Delete accounts

You can delete an existing GL account by clicking the red minus sign next to it.

Please Note - You can delete only the accounts that have never been used, i.e. they have been not linked to any product and there have been no manual journal entries entered for them.

Importing the Chart of Accounts

Mandatory fields are in bold text below.

Please Note - If balances are added for the GL sheet, debit amount and credit amount must be equal.

Required GL Accounts for Loan and Savings Products

Loan products:

For each loan products, we need to specify the following accounts (refer to the loan products table below):

Portfolio Control – the current asset account that is controlling the product portfolio.
Transaction Source – the current asset account that is managing your money source.
Write-off Expense – the expense account that you use when cancelling or writing off an account.
Interest / Fee / Penalty Income – the income accounts you recognize when cash is received
Interest / Fee / Penalty Receivable – are the current asset accounts used for managing the interest, fees or penalties you expect to earn in the Accruals Methodology

Screenshot of the accounting rules setup for loan products

Saving Products

For each savings products we need to specify the following accounts (refer to the savings products table below):

Transaction Source – the current asset account that is managing your money source.
Savings Control – the current liability account that is controlling the product portfolio.
Interest Expense – the expense account that you use when have to pay interest for the deposits.
Interest / Fee Income – the income accounts you recognise when cash is received
Overdraft Portfolio Control – the current asset account that is controlling the product portfolio.
Overdraft Write-Off Expense – the expense account that you use when cancelling or writing off an account.
Overdraft Interest Income – the income account you recognise when cash is received