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The Ledger and Chart of Accounts

The general ledger holds the double-entry record of what each company has done, and it is the system of record: Xero, QuickBooks, Sage, Integra and your bank are sources and mirrors, not the destination. The chart of accounts is its foundation, and a finance team can now build and maintain it on the Chart of accounts tab of Ledger & Finance without an architect.

Where to find it

Admin Panel → Finance:

  • Ledger & Finance — the Chart of accounts tab: import, add, edit and classify accounts

Architect Panel → ERP - Finance:

  • Ledger & Finance — the same console for architects
  • Chart of Accounts — the accounts as a datastore, for inspection
  • Posting Rules — which accounts each document type posts to

Starting a chart

  1. Open Ledger & Finance, choose the company at the top and open the Chart of accounts tab. A company with no accounts shows This company has no chart of accounts.
  2. Press Import a template… and choose UK small and medium business: a four-digit chart for a VAT-registered company filing FRS 102 accounts, with the UK VAT codes S20, R5, Z0, EX, OS and RC20 and the account roles the year-end close, VAT return and revaluation need.
  3. Leave Add the template's VAT codes ticked unless you already have tax codes. Tick Fill in empty classification to complete accounts that already exist. The dialog checks the template before you press Import; existing account codes are never renamed or re-sided.
  4. Or press Import a CSV file… to bring a chart from your old package. The first row names the columns: at least code, name and type, optionally side, control, parent, section, cashflow, role, tax and postable. Press Check the file; every row is checked before anything is written. Template CSV downloads an example.

Adding and editing accounts

New account… adds one account. Its settings:

  • Code, Name and Type (asset, liability, equity, income or expense).
  • Normal balance: debit or credit, or the type's usual side.
  • Control account for: Sales ledger control (AR), Purchase ledger control (AP), Bank control or Tax control. Fixed once the account has journal lines.
  • Sits under: a heading account, for sub-totals.
  • Statement heading and Cash-flow category: where it appears in the statements. Blank means the default for its type.
  • Account role: what the ledger uses it for, such as Retained earnings (year-end close) or VAT liability.
  • Default tax code: what a new line on this account starts with.

Editing an existing account changes its name and classification, never its code, type or side: journal lines carry the account, and re-typing one with history would restate every statement it is on.

Checks on the tab

  • Configuration check lists every account code named by posting rules, tax codes and intercompany rules that is not a postable account on this chart. Documents posting through those rules are refused until it is fixed.
  • Reference lists the ledger acts on shows each account role and which account carries it; a role with none is flagged. Without Retained earnings the year cannot be closed; without Unrealised exchange gains and losses a revaluation cannot be posted.
  • Statement headings… renames the headings the statements print, for every company.

Rules the ledger enforces

  • Posted journals are never edited or deleted. A correction is a reversal and a new posting.
  • Nothing posts twice. Every journal carries a key derived from what caused it, so a retried task or redelivered webhook cannot post the same transaction again.
  • Post only from a console or a document. A row typed on the Journals datastore bypasses the balance and period checks.

Worked example

A new UK company imports the template, which gives it 1000 Bank current account and 1010 Bank deposit account with Bank control, 1100 Trade debtors with AR control, and the VAT codes. It also banks in euros, so the controller adds 1030 Bank euro account with New account…, sets Control account for to Bank control and Statement heading to Current assets, then checks the configuration check reports no problems before the first invoice is posted.

Recommendations

  • Start from the template and add to it, rather than building from nothing.
  • Agree the chart with whoever prepares your accounts before the first posting.
  • Clear the configuration check before go-live and after every change to posting rules.
  • Give every role an account. A missing role surfaces at year end or VAT time, the worst moment to find it.