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How to Setup a Chart of Accounts in QuickBooks?

In QuickBooks Online, the Chart of Accounts is a complete list of a company’s accounts that helps in analyzing and classifying income, assets, liabilities, and expenses. Whenever a user creates a company file in QuickBooks Online, QuickBooks automatically categorizes the chart of accounts based on the business entity.

By setting up and organizing a chart of accounts in QuickBooks, you can easily fill out the income tax without any issue. In general, the chart of accounts has four categories: asset account, liability account, income account, and expense account. Although those users who have recently started using the QuickBooks online version are facing challenges in setting up a chart of accounts in QuickBooks.

chart of account in quickbooks

In this guide, we are going to cover the complete steps that you can follow step-by-step to set up a chart of accounts in QuickBooks Online.

Points to Remember Before Setting up Chart of Accounts

Some of the important points that you must ensure before organizing the chart of accounts are as follows:

  1. In the beginning, try to keep the line items simple. Make sure to provide suitable titles for the line items.
  2. Avoid creating a new line item for each transaction, as it can mess up the entire chart of accounts. Instead of that, users must use headings.
  3. While creating a new account for PayPal fees, make sure to create a sub-account under the bank fees section rather than creating a separate line.

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Steps to Setup a Chart of Accounts in QuickBooks

Let’s discuss the steps that you can execute step-by-step to setup a chart of accounts in QuickBooks online software:

  • Firstly, move to the dashboard page of your QuickBooks online account and then click on the “Gear” icon.
  • Secondly, select the “Chart of Accounts” option.
Quickbooks online account setting
  • Now, the accounts menu will appear on your screen. Here, you have to click on the tab, and then the Accounts menu option will open on your screen.
  • Followed by the above steps, click on the “Add New Account” option.
creating new account
  • Here, click on the “Account Type” option and then select the specific account type.
account creating in quickbooks
  • Now, click on the “Continue” option. With that effect, the “Add Account” page will open on your desktop screen.
add new account
  • Here, you must ensure that the account name is the same as what you want to display in the financial statements.
  • Moving ahead, make use of the specific account name box and then verify the sub-account.
sub-account list
  • Once you have selected the sub-account, you must provide a relevant name for the particular parent account.
  • In case QuickBooks comprehends having access to other currencies, it will automatically notify you to search for those specific customers, vendors, bank accounts, etc. Tip: Avoid providing the account description. (It’s not mandatory.)
  • Now, identify the credit card account type version, which is available on the Add New Account page. This will help you save all the important information related to credit cards and bank accounts.
  • Moving ahead, identify the tax line. Now the tax return of the corporation and the cash account balances will be registered automatically. If you still want to add a new bank account, you can use the drop-down list available in the tax-line mapping.
account creating drop down setting
  • At last, save the new account details by clicking on the “Next” option. Thereon, you can easily view the account details on the “Add New Account” page.
Done add account
  • Once you are done with the setup of both accounts, the accounts will be displayed automatically in the chart of accounts list.

Congrats! By performing the above-listed steps, you have successfully set up a chart of accounts in the QuickBooks online version.

How to use QuickBooks Online Chart of Accounts?

A. QuickBooks Desktop

Below are listed the steps that you can perform step-by-step to access the chart of accounts in the QuickBooks desktop version:

  • First of all, navigate to the QuickBooks menu and then click on the “Chart of Accounts” option.
  • Thereon, move ahead to the company option and then select the “Accountant” or “Lists” option.
Quickbooks desktop setting chart of account in quickbooks

B. QuickBooks Online

To access the chart of accounts in QuickBooks Online, just navigate to the settings page and then click on the “Chart of Accounts” option.

Quickbooks online setting chart of account in quickbooks

That’s how simple it is to access charts of accounts in the QuickBooks online version.

A Guide to Modify A Chart of Accounts in QuickBooks

In case you want to modify an account from the chart of accounts, then below are illustrated the steps that you can carry out to do so:

  • Firstly, navigate to the “Chart of Accounts” option, and then scroll down to the account that you want to modify.
  • Then, click on the drop-down arrow icon, which is available next to the “Run Report” option.
  • Thereon, click on the “Edit” option, and then a new window will open on your screen.
modify a chart of account in quickbooks
  • Note: If you have already created transactions with that account, then you must avoid changing the account category.
modify chart of account in quickbooks
  • Apply the necessary changes that you want to make to your chart of accounts.

Ending Note

As shown above, in this blog, we have put together the complete procedure for how you can set up a chart of accounts in QuickBooks. You can easily go ahead and execute the steps mentioned above to get it done. Furthermore, if you are stuck with any other error while working on the software, then you can get in touch with our experts. Our experts will surely help you in every possible manner so that you can seamlessly work on QuickBooks software without facing any issues.

Benjamin James
Benjamin James

I am Benjamin james, a technical content writer with over 13 years of experience in the domain. My passion for technology and writing has helped me become an expert in software tools. Through my extensive knowledge and expertise, I am working to help the world leverage the power of technology.

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