QBO Tutorial: How to Setup Chart of Accounts
What is Chart of Accounts? Why is it Important?
According to Investopedia, a chart of accounts (COA) is an index of all the financial accounts in the general ledger of a company. In short, it is an organizational tool that provides a digestible breakdown of all the financial transactions that a company conducted during a specific accounting period, broken down into subcategories.
An important purpose of a COA is to segregate expenditures, revenue, assets, and liabilities so that viewers can quickly get a sense of a company’s financial health. This makes readers locate specific accounts, each one typically contains a name, brief description, and an identification code. A well-designed COA not only meets the information needs of management, but it also helps a business to comply with financial reporting standards (TechTarget). This all in all gives a clearer insight into the company's financial health.
How Setup Chart of Accounts Work
Start on the Dashboard page
Click on the Gear icon, at the top right
Select Import Data under Tools
Click on Chart of Accounts
Select Browse (find the file you created for your COA), click Next
QBO gives you a second chance to double-check everything before it fully imported
If everything looks good, click Import
How to Manually List Sub Accounts Under Parent Accounts
Head over to Chart of Accounts, (Gear icon > Your Company)
Select the account and click Edit, under Run Report arrow
Check off the box that says Is sub-account
Choose the account it should fall under
Here's a video, for a more visual tutorial (INCLUDES our Chart of Accounts Template):
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