What is the Chart of Accounts in QuickBooks Online? (2023)

Having an accurate chart of accounts is important because it feeds the data in your reports. If the information here is inaccurate, then our charts will be wrong.

Accessing the Chart of Accounts

There are a couple different ways to get to the chart of accounts. The first way is to click the gear icon in the Header at the top-right of the screen. From there, you can access the chart of accounts under the Your Company heading.

[Figures: Accessing the chart of accounts through the gear icon ]

Another way to access the chart of accounts is from the Navigation Pane on the left side of the screen. Click the Accounting menu item and you will then see a link to the chart of accounts.

[Figure: Accessing the Chart of Accounts]

Once you are at the chart of accounts, you will see a table with all the relevant information about your company. QuickBooks Online creates the chart of accounts automatically based on the industry and type of company that you specified when making your company file. For a new file, you will need to enter your accounts' opening balances.

At the top of the chart of accounts, you can select to view the chart or reconcile your books with your bank records. Having your accounts reconciled is important because it lets you accurately monitor your finances. Clicking the Reconcile tab will guide you through the process of reconciling your accounts.

[Figure: Selecting a bank account to start reconciling accounts]

Back in the chart of accounts tab, you will see under the title that there is a breadcrumb navigation link that goes to All Lists. Clicking that will take you to a page of lists, which shows that the chart of accounts can be considered a list in QuickBooks terms.

[Figure: The Chart of Accounts main page]

On the right side above the chart are buttons to run reports and create new accounts. We'll look at running reports in another lesson and making new accounts a little later in this lesson.

There is also a search bar directly above the chart where you can search for accounts by name. This is a much faster way to find the account that you are looking for rather than browsing through the list. For example, if you are looking for anything related to travel expenses, just type 'travel' into the search bar and any related accounts will appear instantly.

[Figure: Using the search bar to find accounts]

Three more icons to the right or the search bar allow you to do batch editing, print the chart, and change settings. The pencil icon for batch editing makes every name field in the chart editable. The printer icon allows for printing or exporting into another format like PDF. The gear icon for settings allows you to choose which columns to show, including if inactive items should be shown, and also specify how many rows to show in each result.

The chart has six columns. The columns are name, type, detail type, QuickBooks balance, bank balance, and action. The chart can be sorted in ascending or descending order by name, type, or balances.

The first column shows the name of each account. The name can be changed to whatever you want.

The second column shows the main type of account it is. There are two main types of accounts in QuickBooks Online: Balance Sheet accounts and Income and expense accounts.

Balance Sheet accounts

Balance sheet accounts will appear on your Balance Sheet report. This includes the assets, liabilities, and equity of your business. The Balance Sheet account types are:

The third column shows a more detailed description of the type. The detailed type options change based on the type. Detailed types help you select and name accounts appropriately so that you know exactly where your money is coming from and going to when you run reports. You will be able to specify the detailed type when adding the account or editing it.

The next two columns are for the QuickBooks balance and bank balance. The QuickBooks balance will represent any transactions entered into QuickBooks, while the bank balance will show the balance from the bank if it is downloading bank data.

The last column is the Action column. Here you will have the option of viewing the register or running a report. The register will let you see every transaction that you've had on that account. Clicking the triangle will give you more options, such as editing the account or making it inactive.

Numbering Accounts

Accounts can also be numbered, which they aren't be default. In order to add account numbers, go back to the gear icon at the top-right. From there, click Account and Settings and go down to Advanced. In the Advanced tab, find the setting for Chart of Accounts.

Click the pencil icon to allow for editing the settings. The first toggle item there will enable account numbers. Turn that on. Also, to have the account numbers show up in the chart of accounts, then additionally tick the Show Account Numbers checkbox.

[Figure: Enabling account numbers in the chart of accounts]

Now when you go back to the chart of accounts, you can see a new column added for account numbers. You can edit the account numbers by clicking the pen icon about the table on the right side. That will allow you to edit any fields in the table.

[Figure: Column for account numbers in the chart of accounts ]

Editing Accounts

If you want to edit only one account, then you can click on the triangle in the Action column and then click Edit in the dropdown menu. That will pop open a modal window that allows you to edit only that one account.

[Figure: The window for editing an account ]

Adding an Account

We'll now take a look at how to add an account in QuickBooks. Start by clicking the New button at the top right. That will pop open a modal window where you can add a new account.

[Figure: The window for adding an account ]

The first thing you need to do is choose the Account Type. Next, you will select the appropriate Detail Type. Using the information in the Detail Type, come up with a descriptive name for the account. You can then enter a description.

You then need to specify whether the account is a sub-account of another parent account. Sub-accounts are just there to help keep your accounts organized. For instance, you can make accounts for phone and water a sub-account of a utilities account. That will make subsequent reports easier to read. If you choose to make this a sub-account, then select the parent account from the dropdown menu.

Lastly, choose when you want to start tracking the finances for the account. If it is a brand-new account, then you can select Today and enter its starting balance. If it's an older account, then select Other and choose the date where you want to start tracking from.

To finish adding the account, click the Save and Close button. If your new account is a bank account, then you can connect it to online banking. This can be accomplished by clicking the Connect Bank link in the Action column's dropdown menu.

Make an Account Inactive or Active

You can make an account inactive so that your books are neat and orderly. This won't delete the account information and transactions, so you can keep a record of it.

If the account is connected to a bank, then you should first disconnect it. Once it is disconnected, you can proceed to making it inactive. In the Action dropdown menu, select Make Inactive. Your account will now be hidden from the list.

If there is a balance on that account, then QuickBooks Online will create a journal entry and move the balance to another account. Also, your transactions with the account won't disappear.

You can change the settings in the chart of accounts to see your inactive accounts. To see your inactive accounts again, click on the gear icon above the table. Select the option to Include Inactive in the Other category.

[Figure: Viewing inactive accounts in the chart of accounts ]

You can also make an account active again, however the journal entry created when making the account inactive stay in place. To make the account active, just click Make Active in the Action column.

Conclusion

In this article, you learned all about the chart of accounts. You saw that there are several ways to access the chart of accounts. You learned how to reconcile accounts with a bank and also how to quickly find the accounts you are looking for by using the search bar.

You also learned about all the different types of accounts that are available and how they are put into different categories, such as income, expense, and balance sheet account. and how to add them, edit them, deactivate them, and the activate them again.