How a Chart of Accounts Works
A Chart of Accounts (COA) groups transactions into clear buckets-assets, liabilities, equity, income, and expenses-so reports make sense.
The structure
- Assets & Liabilities: what you own and owe
- Equity: owner investment and retained earnings
- Income & Expenses: what you earn and spend
Best practices
- Use plain names customers and staff understand
- Keep the list short; create sub‑accounts only when needed
- Number accounts (1000s assets, 2000s liabilities, etc.)
Learn the benefits of maintaining a COA and the key features to include.
Want us to review your COA and fix common issues?
Start a QuickBooks Cleanup or move to Monthly Bookkeeping.
Dedicated bookkeeper