Setting Up Your Chart of Accounts

You have the option to use account numbers in addition to naming each account.  If you use account numbers, these will appear throughout the software when choosing or displaying the account.  In the setup wizard, choose “Yes” to the question “Do you want to use Account Numbers?”  Once you are past the setup wizard, you can go to Settings > Accounting Settings > General Settings > Chart of Accounts > and toggle Show Advanced Options to use account numbers.

There are five different types of accounts:

1) Asset Accounts are your main accounts that track the money deposited and withdrawn from your bank or cash accounts. Checking, Savings, and Petty Cash accounts have already been added for you. You can change the account names to something more meaningful by clicking inside each box.  You can add as many asset accounts as you need, and remove any that you do not use.

2) Liability Accounts are used to keep track of the debts and obligations that your business owes to other businesses or individuals.  These should be reported on your balance sheet if you are using modified cash basis or accrual basis. A Sales Tax Collected account has already been added, and you can add more as needed.  If you use Patriot to run payroll, you will need to use Modified Cash basis and create a liability account with the Sub Account Type of “Current Liabilities” to track your payroll taxes that you will be paying to tax agencies (if you are a Basic Payroll customer), and deductions/contributions that you will be paying to benefit providers.

3) Equity Accounts are created to track owner investment in the business, owner withdrawals, and any net income or loss incurred.  Equity can also be calculated by subtracting assets minus liabilities.  We have added a default account, “Owners Equity,” for you to use in equity transactions, but you can rename or create additional accounts as needed.

4) Income accounts keep track of incoming money, such as product sales. Commonly-used income accounts have already been added. You can rename an income account, add a new one, or remove these accounts as needed.

5) Expense accounts keep track of the types of outgoing money, such as payroll expenses. A list of commonly used expense accounts has already been added. You can rename an expense account, add a new one, or remove any that you do not use.

When you are finished setting up your chart of accounts, click “Continue” at the bottom of the page.  Next, you will set up your Transaction Settings.

To Manage Your Accounts After Initial Setup

Settings > Accounting Settings > Chart of Accounts

• Click the “Add New Account” link next to the account type you want to add (Asset, Liability, Equity, Income, or Expense). A set of blank fields will appear.
• Enter a unique description for the new account, up to 40 characters.
• Select the Subtype.  The Subtype will group similar accounts together and determine how transactions are recorded to the general ledger.  These Subtypes are not editable. Note these are different than subaccounts, which are coming soon! See below.
• Keep the “Active” selection.  You can inactivate the account later if you no longer use it.
• Click Save.

For your convenience, you can also add a new account “on the fly” when recording a journal entry.

Accounting > Financial Tasks>  Journal Entry

• Simply click the +Add New link. A modal will appear for you to fill in the following fields:
  • Account Number (if used)
  • Account Name
  • Account Type
  • Sub Account Type (if applicable)
• Click Save.

To edit an account:

• Click the “Edit” icon in the row of the account you want to edit.
• Make your changes, and click Save.

To inactivate an account:

• Click the “Edit” icon in the row of the account you want to edit.
• Uncheck the “Active?” box.
• Click Save.

To delete an account:

• Click the “Delete” icon in the row of the account you want to delete. If you do not see a “Delete” icon in that row, this means it has been used in a transaction and cannot be deleted.   Instead, you can inactivate an account with history.  NOTE:  Once you delete an account, it’s gone for good.
• Click Yes to delete.

Need to add a subaccount?

Good news! We’re currently in the process of developing the feature to add subaccounts to our chart of accounts. Want to be kept in the loop? Just fill out the form below and we’ll let you know when the feature is available.