The Chart of Accounts

Summary

This guide explains everything you need to know about the Chart of Accounts in Sage 50cloud Accounts, including what it is, what it contains and how to edit it.

Description

What is a Chart of Accounts?

When you run management reports in Sage 50cloud Accounts, your nominal accounts are categorised so you can analyse your income, expenditure, assets, liabilities and capital, and see how your business is performing. The Chart of Accounts is a list of all your nominal accounts and it determines which category each account appears in. You can have more than one Chart of Accounts.

What is a nominal account?

Nominal accounts are records that track the different types of sales and purchases for your business, for example, bank charges, petrol or sales. Each nominal account has a unique nominal code reference to identify the account, though you can change them to use your own numbering scheme if needed.

When you enter a transaction in Sage 50cloud Accounts, you assign the relevant nominal code depending on what you're recording. For example, a sales invoice or a bank payment.

Default Layout of Accounts

When you first set up your company in Sage 50cloud Accounts, your nominal accounts and Chart of Accounts are based on the business type you select. For example, sole trader, partnership, limited company or charity.

What does the Chart of Accounts consist of?

The chart of accounts is split into two areas - Profit & Loss and Balance Sheet.

TIP: To view the default Chart of Accounts, categories, and list of nominal codes - Click here >

Profit & Loss categories

To view the Profit & Loss categories - Click here >

Sales	Income or revenue you generate by selling products or services.
Purchases	Purchases made by your company, for example, buying stock and any associated transport costs.
Direct Expenses	Costs directly involved in the sale of goods, for example, direct labour and sales commission.
Overheads	Business expenses that are not directly attributable to the cost of sales. This includes wages, rent, rates, annual depreciation and so on.
Taxation	Used for corporation tax and shows an expense for taxation on the profit and loss report after net profit.

Balance Sheet categories

To view the Balance Sheet categories - Click here >

Fixed Assets	Property, plant and equipment your company owns. This includes the original asset purchase value and the accumulated depreciation.
Current Assets	Includes assets owned by your business that have a short life, such as stock, cash and money in the bank.
Current Liabilities	Liabilities you have to pay in the near future, such as creditors, VAT Liability and short term loans, wages.
Long Term Liabilities	Liabilities that are not due in the current financial year, such as long term creditors.
Capital and Reserves	Capital introduced, share capital, unused reserves and the accumulated profit or loss.

What can I do to the Chart of Accounts?

If necessary you can:

Sage Intacct

Sage Intacct is designed for companies that have more complex requirements. To learn more about how Sage Intacct can benefit your growing business visit our dedicated web page.