Defining Ledger Accounts
Ledger accounts are optional.
Before defining ledger accounts complete Company set up.
A set of accounts is installed with the software. Review that and modify as required.
For an overview of a possible account structure see Ledger Account Structure.
Accounts can be set up as company level. Company level accounts are those that don't relate to specific department/divisions. For example a lease on a combination shop/workshop where the shop is one department and workshop another.
Once an account has been set up the code may not be edited. An account may only be deleted if it is not in use - that is not attached to any transactions.
Think of how to track income and expense. For example, if you are a plumber and suspect roofing jobs are the main source of income, it would be wise to set up a separate account for roofing jobs. If you sell several lines, it would be sensible to set up income (and possibly expense) accounts for each.
To create company-level accounts leave the Department/Division field blank. These accounts are for such things as leases, insurance, loans, etc that are not specific to a department. Accounts for departments should for those things that directly relate to the cost and income of the department.
To create, or edit, an account click the Edit or New buttons. The following form activates.
Consider all fields compulsory.
Type - select either expense of income. This is used to calculate profit and loss.
The Account Code must be unique for the company. This means, if you are using numbers, and have multiple departments, the account codes could be something like the following:
1000 - Sales for department 1
1001 - Sales for department 2
The Description field is not compulsory, but you are advised to fill it in as it is likely some account codes will be similar and the description helps to identify the correct one. The description prints on transaction and account reports and is used as the default description for all transactions as you enter them.
If the account is for a department/division enter/select the department/division. If this field is left blank the account is a company level one.
Check Affects tax amount if the account is part of your profit and loss for tax purposes. If the box is not checked the account will appear as a balance sheet item in the trial balance and balance sheet. See Balance Sheet and Assets Register for more information on getting the best out of your ledger set up.
Apply G.S.T check this if the account is to have G.S.T. applied. Most accounts will. Those that won't are payroll, donations, tax payments, etc, and domestic accounts. This setting overrides the G.S.T. status for the company and department. That is, if both have it enabled, any account to which it does not apply results in transaction entries for that account not having G.S.T. calculated. To change an account's G.S.T. status do so immediately after you calculate G.S.T.
Check Active if the account is to be used immediately.