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Ametnes Legal ERP - Charts of Accounts#

Charts of Accounts#

In Ametnes Legal ERP system, Chart of Accounts (COA) is a comprehensive list of all financial accounts used by a business or organization. This listing organizes all of the accounts needed to record financial transactions, which fall under categories such as assets, liabilities, equity, revenue, and expenses. The COA serves as the foundation of an organization’s financial structure and enables accurate financial reporting.

Key Elements of a Chart of Accounts:#

  1. Account Codes: Each account in the COA has a unique code or number that makes it easy to identify and categorize. For example, assets might start with 1, liabilities with 2, and so on.
  2. Categories:
    • Assets: What the business owns (e.g., cash, inventory, equipment).
    • Liabilities: What the business owes (e.g., loans, accounts payable).
    • Equity: Owner's interest in the business (e.g., retained earnings).
    • Revenue: Income generated from operations (e.g., sales, services).
    • Expenses: Costs incurred to generate revenue (e.g., rent, salaries).
  3. Hierarchy: The COA is often structured in a hierarchical format, with accounts arranged in broad categories that narrow down into more specific subcategories.

Benefits of a Chart of Accounts:#

  • Streamlined Financial Reporting: A well-structured COA enables quick generation of financial statements like the balance sheet and income statement.
  • Improved Decision-Making: By categorizing expenses and revenue clearly, it becomes easier for management to analyze performance and make data-driven decisions.
  • Enhanced Compliance: The COA helps ensure accurate and consistent financial record-keeping, essential for tax compliance and regulatory reporting.

Example of a Chart of Accounts Structure:#

  1. Assets (1000–1999)
    • Cash (1010)
    • Accounts Receivable (1050)
    • Inventory (1200)
  2. Liabilities (2000–2999)
    • Accounts Payable (2050)
    • Loans (2100)
  3. Equity (3000–3999)
    • Owner’s Capital (3050)
  4. Revenue (4000–4999)
    • Sales Revenue (4050)
  5. Expenses (5000–5999)
    • Rent Expense (5050)
    • Salaries (5100)

A tailored COA allows an organization to categorize transactions in a way that best fits its operational and reporting needs.

Default Charts of Accounts#

The Ametnes Legal ERP system comes with these default charts of accounts. The following table summarized the default chart types.

Type Internal Group
Current Assets Asset
Receivable Asset
Bank and Cash Asset
Prepayments Asset
Fixed Assets Asset
Non-current Assets Asset
Current Liabilities Liability
Payable Liability
Non-current Liabilities Liability
Equity Equity
Income Income
Expenses Expense
Other Income Income
Cost of Revenue Expense
Current Year Earnings Equity

Create Accounts#

To create a new Account, first ensure that the company for the account is selected at the top right corner.

Create Account

  1. Click on the Accounting left menu, to navigate to the Accounting dashboard.
  2. Click on the Configuration -> Chart of Accounts menu.
    1. Click the [New] button. A new entry line will be created.
    2. Set the Account Name.
    3. Select the Type of account.
    4. Select the Account Currency.
    5. Click [Save] button.

Multi-Company Charts#

Ametnes Legal ERP system allows you to set up multi-company charts of accounts

Copying Charts of Accounts

It is possible to copy charts of accounts from one company to another.

  • Firstly export the charts you want to copy.
  • Make any designed modifications to the exported charts.
  • Then select the company you want to copy the accounts.
  • Import the modified accounts into the new company.