Chart of Accounts

When creating New Account, you need to decide whether the new account belongs to Balance Sheet or Profit and Loss Statement.

Balance Sheet

To create a new account on Balance Sheet, click New Account on the Balance Sheet side of the Chart of Accounts.

Then fill out the form:

• Name should be a short description of the account’s purpose.
• Code field is optional. If you are using account codes, you can enter alphanumerical code here.
• Choose the Group under which the account will be reported.
• Cash Flow Statement lets you select the category where the account will be reported on the Cash Flow Statement report. Options include Operating activities, Investing activities, and Financing activities.
• If you are using Tax Codes, you can select a Autofill - Tax Code if all or most transactions posted to this account will have the same tax code applied. For Balance Sheet accounts, this field is often left blank.
• If you are using Divisions. you can select a Division if the balance of this account will belong to only one division.

Profit and Loss Statement

To create a new account on Profit and Loss Statement, click New Account on the Profit and Loss Statement side of the Chart of Accounts.

Then fill out the form:

• Name should be a short description of the account’s purpose.
• Code field is optional. If you are using account codes, you can enter alphanumerical code here.
• Choose the Group under which the account will be reported.
• Cash Flow Statement lets you select the category where the account will be reported on the Cash Flow Statement report. Options include Operating activities, Investing activities, and Financing activities.
• If you are using Tax Codes, you can select a Autofill - Tax Code if all or most transactions posted to this account will have the same tax code applied.

When creating New Group, you need to decide whether the new group belongs to Balance Sheet or Profit and Loss Statement.

Balance Sheet

On Balance Sheet, you can segment your top-level categories further by creating sub-groups named "Current Assets", "Non-Current Assets", "Current Liabilities" and "Non-Current Liabilities". Depending on your business requirements.

Profit and Loss Statement

On Profit and Loss Statement you can create your own top-level categories such as "Cost of Goods Sold", "Operating Income", "Operating Expenses", "Other Income" and "Other Expenses". You can also create sub-groups to further segment accounts within the top-level groups.

Interim subtotals and final totals are useful in accounting displays. Add them with the New Total button.

Totals calculate a running summation of all groups above them on the Profit and Loss Statement. They are positioned the same way as the groups. After updating, they show with dashed underlines.

If you have no totals defined, your Profit and Loss Statement will show single total named Net profit (loss) at the bottom of the report. If you wish the total to be named something else, you can create New Total and place it in the Chart of Accounts at the bottom.

However, you can also construct elaborate multi-step Profit and Loss Statement with multiple totals such as "Gross Profit", "Operating Profit" or "Net Profit before Tax" etc.