• Wendy Ni

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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