Back to Glossary
Accounting Terms
Chart of Accounts
Definition
A list of all accounts used to classify and record financial transactions.
Overview
The chart of accounts organizes your financial data into categories: assets, liabilities, equity, revenue, and expenses. It's the foundation of your accounting system.
Example
A chart of accounts might include: Cash, Accounts Receivable, Revenue, Office Expenses, Contractor Fees.
Best Practices
Set up accounts that match your business needs. Keep it simple but comprehensive enough for reporting.
Common Mistakes to Avoid
Too many accounts
Inconsistent categorization
Not matching business needs
Frequently Asked Questions
How many accounts should I have?
Enough for useful reporting, but not so many that tracking becomes burdensome. 15-30 is typical for small businesses.