MYOB Chart of Accounts

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CHART OF ACCOUNTS

Understanding how your Chart of Accounts works from an accounting perspective.

In the Accounts Command centre click on Accounts List.

All Accounts will be listed with individual tabs for your Asset, Liability, Equity, Income, Cost of Sales, Expense and two other for Other Income and Other Expenses.

The Asset account codes relate to assets that your company owns such as: the bank account, trade debtors, office equipment, motor vehicles, buildings, etc.

The Liability account codes relate to liabilities that you currently have such as: trade creditors, PAYE, bank loans, GST, credit cards, etc.

The Equity account codes are the summary of both the Asset and Liability codes and are also where you record the shareholders drawings and any funds that are introduced by the shareholder or owner.

The Asset, Liability and Equity accounts are Balance Sheet items and other than using common codes like PAYE or GST payments/refunds codes, should be discussed with your accountant or senior accounts person before being used.

The Income accounts codes are codes relating to your sales and income. You may have one code for sales or several depending on what information you wish to view. For example you may have several ways of earning income and you would like to be able to see which area is bringing in the most revenue. You would set up different codes to be able to track this; i.e. Software Sales, Computer Sales, Installation Sales, etc.

The Cost of Sales are the codes we use to track how much it costs to make our sales. They are directly related to our sales codes. For example, if we sell software then we have to purchase software to sell. If we sell computers the same things applies. If we service and install computers then it will cost us wages, vehicle and travel expenses. These codes are not to be confused with Expense account codes.

Expense account codes relate to what we call running costs - the means to "keeping the doors open". They are costs that all business need to operate. They are things like electricity, telephone, bank fees, printing and stationery, advertising and so on.

Other Expense and Other Income codes are infrequently used but you may wish to highlight an expense or some form of income so that you can easily find it later to maybe discuss with your accountant or you may just want to have separated from your general account codes.

The Income, Cost of Sales and Expense account codes form your Profit and Loss Statement and are the codes that you use regularly when accounting for your business. They are linked to Trade Debtors and Trade Creditors in your Balance Sheet as being an asset and a liability.