A chart of accounts is simply a listing of all business accounts in the general ledger. Each account is accompanied by a unique reference number.

Small businesses typically have five categories in their charts of accounts: assets, liabilities, net assets, revenue, and expenses. When it comes to assigning the reference numbers, very small businesses may only need three digits: e.g. Assets 1000 -1999, liabilities 2000 - 2999 etc. But it's advisable to include more digits than you think you'll need to allow for future growth.

TIP: Many industry associations publish best practice charts of accounts for firms in their industry to establish a consistent standard. Some accounting software, like Quickbooks (which powers the Finance element of your Smarta Business Builder package), offers a selection of predefined account charts for different businesses.

Your chart should reflect all the various transactions of your business. Try and include as much detail as possible as, once reference numbers are assigned, it's difficult to go back and add details.

Within the chart of accounts, accounts are typically listed in the following order:

Within the categories of operating revenues and operating expenses, accounts might be further organised by department.

Production, Finance and Sales will all have their own outgoings, for example (phone bills, salaries, expenses etc). By sub-dividing your chart of accounts to this level of detail, you'll get an even more in-depth overview of the performance of various parts of your business.

Depending on the size and scale of your business, your chart of accounts will vary in complexity. A small business with international offices and multiple revenue streams will have thousands of accounts. A small local retailer may only need a hundred accounts.

A chart of accounts is simply a listing of all business accounts in the general ledger. Each account is accompanied by a unique reference number.

Small businesses typically have five categories in their charts of accounts: assets, liabilities, net assets, revenue, and expenses. When it comes to assigning the reference numbers, very small businesses may only need three digits: e.g. Assets 1000 -1999, liabilities 2000 - 2999 etc. But it's advisable to include more digits than you think you'll need to allow for future growth.

TIP: Many industry associations publish best practice charts of accounts for firms in their industry to establish a consistent standard. Some accounting software, like Quickbooks (which powers the Finance element of your Smarta Business Builder package), offers a selection of predefined account charts for different businesses.

Your chart should reflect all the various transactions of your business. Try and include as much detail as possible as, once reference numbers are assigned, it's difficult to go back and add details.

Within the chart of accounts, accounts are typically listed in the following order:

Within the categories of operating revenues and operating expenses, accounts might be further organised by department.

Production, Finance and Sales will all have their own outgoings, for example (phone bills, salaries, expenses etc). By sub-dividing your chart of accounts to this level of detail, you'll get an even more in-depth overview of the performance of various parts of your business.

Depending on the size and scale of your business, your chart of accounts will vary in complexity. A small business with international offices and multiple revenue streams will have thousands of accounts. A small local retailer may only need a hundred accounts.