- Chart of Accounts
- 2015-05-13 08:40:39
InoERP provides a multi-segment chart of account structure which you can use to represent your organizational structure and different dimensions of your business that you want to track & report financially. Though, there is no limit to the number of segments you can use in a chart of account structure, it’s advisable not to use more than 8 segments in a single structure. Similarly, you can use any number of characters in each segment but it’s advised to use less than 10 numbers of characters.
Each accounting structure should have at least four minimum segments representing
1. The Balancing Segment
2. The Cost Center
3. The Natural Account
4. The Intercompany Segment
You can use any alpha-numeric characters to create value for the different segments of the chart of account. The value of each natural account should be associated with an account type. The different account types available in the system are
1. Asset: Cash, Accounts Receivable, Prepaid Expenses, Inventory, Fixed Assets, Accumulated Depreciation (contra account), Other Assets
2. Liability: Accounts Payable Accrued Liabilities, Taxes Payable, Wages Payable.
3. Stockholder's Equity: Common Stock, Retained Earnings
4. Revenue / Income: Sales, Service revenue, Interest income.
5. Expense: Rents, Depreciation, Cost of Goods Sold, Supplies, Utilities, Other Expenses
Steps for chart of account setup
1. Design your account structure by considering all your business and reporting needs.
Carefully evaluate the seeded account structure (which is designed after a lot of thought & consideration). If you decide to use the seeded accounting structure then you can ignore step 3 & 4.
2. Create value group and value group lines for each your account segments. (Setup -> Master Data -> Value Group). If you decide to use the seeded accounting structure then you can use the seeded value groups. Modify the value group values and description as per your business needs.
3. Create a new option to represent your chart of account. (Setup -> Option)
Use General Ledger as module code and Chart of Account as Option Assignments.
4. Enter all your segments values as different option values for the option created in step2.
5. Define the chart of account.
6. Create all your allowed account combinations (General Ledger -> Account Combination. You can import from excel).
Using Account Combination
Using accounting in inoERP is quite easy. All the forms and fields have been designed to default values wherever possible. If you are required to manually enter an account combination then you can enter the account number in different ways
i. Enter 2 consecutive characters from any part of the account number in the account number field and system will show you a list of account containing the text entered in that field. You can select the account number from the suggestion list.
ii. If you know the complete account numbers then enter it in the account number field.
iii. If you want to search account numbers, then click on account number field. System will show you a search icon next to the account field. Click on the search icon to search & select account.