Product Tips

New Chart of Accounts Features in QuickBooks 2007 By: Sandi Smith, CPA Product: QuickBooks 2007 Tip Category: Setting up New Account

Situation

You are setting up a new client's Chart of Accounts.

Response

Your work will go smoother with the newest versions of QuickBooks. The 2007 version offers a multitude of options for customization by industry as well as type of entity.

During the company file setup, you are asked for the type of entity of the company. This information is used to set up the correct equity accounts in the Chart of Accounts. This is a great addition since this area is difficult for most small business owners to understand.

Additionally, you'll have a chance to select from the following 30 highly customized industry default Charts of Accounts or two generic ones:

• Accounting or Bookkeeping
• Advertising or Public Relations
• Agriculture, Ranching or Farming
• Art, Writing or Photography
• Automotive Sales or Repair
• Church or Religious Organization
• Construction General Contractor
• Construction Trades (Plumber, Electrician, HVAC, etc.)
• Design, Architecture, or Engineering
• Financial Services other than Accounting or Bookkeeping
• Hair Salon, Beauty Salon, or Barber Shop
• Information Technology (Computers, Software)
• Insurance Agency or Broker
• Lawn Care or Landscaping
• Legal Services
• Lodging (Hotel or Motel)
• Manufacturing Representative or Agent
• Manufacturing
• Medical, Dental or Health Service
• Non-Profit
• Professional Consulting
• Property Management or Home Association
• Real Estate Brokerage or Developer
• Rental
• Repair and Maintenance
• Restaurant, Caterer or Bar
• Retail Shop or Online Commerce
• Sales: Independent Agent
• Transportation, Trucking or Delivery
• Wholesale Distribution and Sales
• General Product-Based Business
• General Service-Based Business

The new Chart of Accounts will be customized from this selection. This customization should save time after setup for both you and the client. Account editing and additions should require fewer modifications.

Numbered Accounts Option. If you decide to use account numbers, these have been standardized as well. Here are standard chart of accounts number ranges, which are identical to accounting industry standards:

10000 - 19999 Assets
20000 - 29999 Liabilities
30000 - 39999 Equity
40000 - 49999 Income or Revenue
50000 - 59999 Job Costs/Cost of Goods Sold
60000 - 69999 Overhead Costs or Expenses
70000 - 79999 Other Income
80000 - 89999 Other Expense

The five digits provide some growing room when new accounts need to be sandwiched into the list in the right order. The five digits are used as follows:

• The first digit is the high level account type (asset, liability, etc.)
• The second two digits are used in account numbering
• The last two digits are used in subaccount numbering

You can still override the standard numbering system to any system you'd like, or avoid account numbers altogether.

Conclusion

With these additions to the Chart of Accounts, new company file setup should go smoother and faster for all.

Sandi Smith, CPA, is a freelance writer and professional speaker located in Dallas, Texas. She is a frequent contributor to Intuit® ProConnection®. Her web site is http://www.sandismith.com.

Last Updated: 03/28/2007

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