21st Century Accounting Help - General Ledger

Designing a Chart of Accounts

Think about your company's current and future accounting needs before you set up your account structure. Make a list of the accounts you use now and consider your company's potential for growth. Then review these topics:

Account Structure Overview

At the heart of your accounting system, your Chart of Accounts allows you to record and track your business transactions by type of transaction. The 21st Century Accounting flexible account structure gives you the ability to post by department, by division, by cost center, by revenue center, or by any other accounting subdivisions your company requires.

Learn About Account Segments

Account numbers can consist of up to 5 segments, for a total of 20 alphanumeric characters (including separators). Traditionally, the primary or account segment represents the type of transaction (sales, cost of goods, revenues, various expenses). Additional segments can represent departments, divisions, regions, stores, right down to departments within stores or individuals in, for example, a law firm.

Some Tips for Numbering Accounts

Keep these points in mind as you set up your account numbers. See the Sample Company Chart of Accounts for examples of these account-numbering principles.

Use numbers for your segments, rather than letters and numbers to ensure easy to define ranges for printing and have your accounts appear in predictable order.
Put the account segment (the segment that identifies the account category) first in the structure.
The account should identify the account category. Asset accounts should have account segments with numbers in the 1000 to 1999 range, liability account segments should be in the 2000-2999 range, and so on.
Leave generous unused blocks of numbers to allow for future additions.
Differentiate segments by lengths.
Know at a glance which accounting subdivisions an account represents.

Related Topics:

Step-by-Step Account Structure