Chart of Accounts FAQs

Applies to: [x] C&P Classic [x] C&P Pro [x] Job Tracker [x] C&P SQL [x] My C&P! See also:

Summary: Frequently-asked questions about setting up G/L accounts in Clients & Profits. General Ledger accounts are the foundation of your financial statements. Each account (of which you can have hundreds) represents a specific, meaningful dollar amount for your assets, liabilities, equity, income, and expenses. Am I stuck using the standard Clients & Profits chart of accounts? Is it possible to change account numbers once they're used? Can G/L account numbers contain letters? What are the two digits to the right of the account number? Do I have to include department numbers on my G/L account numbers? Are there any limitations to G/L account numbers? Why can't I delete an inactive account that has no balance? Does the account number affect the way financial statements are subtotaled? Can I set up G/L accounts for clients and jobs Are profit centers required? Where do I enter the profit center in a G/L account number? Can I subtotal accounts within a classification? For example, I want to subtotal my payroll accounts together in the Expenses section of the Income Statement. How do I assign a subclass to a G/L account? What is the roll-up option and how is it used? Q. Am I stuck using the standard Clients & Profits chart of accounts? No, your chart of accounts is fully customizable. There is no rigid, pre-formatted chart of accounts in Clients & Profits. Every account you create is user-defined, containing a custom number and description. Every account is identified by a unique number, which is used throughout Clients & Profits to make debit and credit entries. Q. Is it possible to change account numbers once they're used? No. An account number can't be change if a G/L account has a balance or activity (i.e., journal entries). Income, job cost, and expense accounts are cleared at year-end, which is the only good time to change these account numbers. To change an asset, liability, and equity account number, you'll have to wait until the G/L account has no balance and no journal entries. So make sure you've carefully considered your numbering system before entering data. That's because how your accounts are numbered is extremely important because they are with you for many years. Q. Can G/L account numbers contain letters? No. The account number is a numeric field, so it can't contain letters or other characters. Q. What are the two digits to the right of the account number? Those two digits represent the department. (Departments aren't required.) They track department costs, such as rent, supplies, and salaries. They are different than profit centers. Profit centers are used to track performance of different business units or divisions within the agency. Departments exist within profit centers (e.g., salaries expense for the San Diego office). Q. Do I have to include department numbers on my G/L account numbers? No. Departments are optional. An account number that ends with ".00" has no department. Q. Are there any limitations to G/L account numbers? Yes. A G/L account number can't exceed 9 digits. Each account has an optional 2-digit department suffix, which limits you to 99 departments. And an account can't begin with a zero and can't contain letters, dashes, or other characters. Q. Why can't I delete an inactive account that has no balance? An account can't be deleted if it has activity, even if the balance is zero. For auditing reasons you need that G/L account as long as there are journal entries in the General Ledger for the account. Once these JEs are purged by the year-end closing procedure, the account can finally be deleted. Q. Does the account number affect the way financial statements are subtotaled? The account number doesn't affect subtotaling on financial statements. Financials use the account category (i.e., balance sheet or income statement), class (i.e., asset, liability, etc.), and sub-class (i.e., current assets, etc.) to make sub-totals. However, accounts are sorted by account number within these groups. This is the primary reason why account numbers are numeric fields, not character fields. Q. Can I set up G/L accounts for clients and jobs? Yes, but it's not recommended. Clients & Profits uses the job tickets and tasks to produce profitability reports, not the General Ledger. This means the General Ledger can focus on the agency's overall profit and loss. Creating and managing accounts for every client is complicated and prone to error, because there would be so many more accounts to maintain and proof. (Each journal entry is posted with a job number and client number for better accountability. You can print audit trails by client and job number. Q. Are profit centers required? No. An account number doesn't need a profit center, but depending upon your office structure, they might be necessary. (To set up Profit Centers, choose Setup > Chart of Accounts then click on the Profit Center button.) After setting up profit centers, there is an option on each account to designate a profit center. It's not literally part of the account number. This is done for flexibility -- you can move accounts around within profit centers without renumbering an account and its activity. Moving an account into a different profit center is easy -- just change the account's profit center. (Choose Setup > Chart of Accounts then double-click on the account you wish to edit.) Given how agencies often reorganize themselves, this option makes it easy to control how your financial statements appear. Q. Where do I enter the profit center in a G/L account number? The profit center is not necessarily part of the G/L account number. Instead, it is an attribute of the G/L account number. It's simply a category you choose that's used for grouping and sorting financial statements. If an account name is generic, like Office Supplies, to help immediately identify the profit center, you can include it within the account number. (In addition to its being designated as described above.) It is entered at the end of the account number, the last two digits to the left of the decimal point. Q. Can I subtotal accounts within a classification? For example, I want to subtotal my payroll accounts together in the Expenses section of the Income Statement. Yes. Accounts with the same classification (e.g., Expenses) can be grouped together using subclasses. Subclasses are user-defined, so you have complete flexibility in how accounts are sorted and subtotaled on financial statements. First, you'll set up your subclasses: choose Setup > Chart of Accounts then double click on the Subclasses button. The G/L Subclasses window lets you add, edit, and delete account subclasses. Q. How do I assign a subclass to a G/L account? Choose Setup > Chart of Accounts. Highlight and double-click on the account you wish to edit. In the Edit Account window you'll see a pop-up menu listing your subclasses. Choose a subclass from the menu, then click Save. That's it -- the changes take effect immediately. You can change your mind anytime by simply choosing a different subclass for a G/L account. Q. What is the roll-up option and how is it used? The roll-up option is a way of combining two or more account balances into one account on the printed financial statement. In the chart of accounts, an account is set up as the account into which the other accounts will roll-up. When a financial statement is printed and the roll-up option is selected, balances from the accounts roll up into the designated account. To use the roll-up feature, choose Setup > Chart of Accounts. Highlight and double-click on the account you wish to edit. In the Edit Account window, find the Roll up into: field. Enter the account number you want this account to roll into. You can also have accounts that are used strictly for rolling up; no amounts are charged directly to them. To prevent accidental postings to these accounts, select the Roll up account only checkbox.   Search the Daily Q&A database