Accounting Chart of Accounts

If you do not set up a good chart of accounts or do it wrong, your accounting statements such as trial balance, income statement, balance sheet will give erroneous results. For a business, incorrect accounting statements can cause irreparable losses. The people who will design the charts of accounts should be experts. The people who will save the account plans and settings to the system should be chosen from meticulous and careful people.

Accounting account codes have extremely simple logic. There are main accounts that start with a numeric value from 1-9. Main accounts are divided into sub-accounts using point separators. The purpose of using the accounts up to the first point in the hierarchy is determined by legal regulations. All the accounts under it are determined by the needs and thinking system of the enterprises.

Sub-accounts after the first point and other sub-accounts opened under them and other sub-accounts opened using the point can theoretically create an endless hierarchical structure. However, do not forget that; Opening too many unmanageable sub-accounts can cause confusion. As we always say, no business should deal with details that it cannot manage,

Since we think that you will find a very familiar subject and a lot of detailed content and benefit from experts, we will only explain this with a simple example.

1. Current Assets
   10. Cash and Cash Equivalents
          100. Cash Account
               100.001  A Branch Office
                      100.001.01 A Branch Office EURO Cash Account
                      100.001.02 A Branch Office USD Cash Account
    

Account codes starting with 1, 10, and 100 are standard codes and come pre-installed in W3. According to the example above, cash account codes are grouped according to branch offices first and then according to currencies.

You can create uniform charts of accounts in W3 in accordance with IFRS (International Financial Reporting System). This feature allows you to use single and IFRS codes simultaneously. If you are an independent audit or a foreign partner company, you will often need a uniform chart of accounts and IFRS at the same time. Generally, businesses or accountants move the transactions recorded in the uniform chart of accounts to the accounts created with the IFRS codes at the end of the period and produce the accounting statements in IFRS standards. You have the opportunity to work simultaneously in W3.

• Using Chart of Accounts Registration Screens
• Standard Accounting Account Code Table and Explanations

Accounting account codes are linked with the following business functions.

Suggestion
One of the most common mistakes is to use the accounting chart of accounts that you used in your old accounting application or that you received from the previous financial year. Account plans, mostly formed over the years, contain many redundant and unused account codes. Sometimes, the old chart of accounts may lag behind the developments in the business. Do not try to convey a chart of accounts that you have not worked on, reinterpreted, or edited.

You can view, add new accounts and update account definitions for chart of accounts: Dashboard > Settings > Parameters > ERP > Finance Accounting > Accounting Definitions > Accounts

You can create a new record by filling in the Account Name and Account Code fields. You can create uniform charts of accounts in W3 in accordance with IFRS (International Financial Reporting System). This feature allows you to use single and IFRS codes simultaneously. If you are an independent audit or a foreign partner company, you will often need a uniform chart of accounts and IFRS at the same time. Generally, businesses or accountants move the transactions recorded in the uniform chart of accounts to the accounts created with the IFRS codes at the end of the period and produce the accounting statements in IFRS standards. You have the opportunity to work simultaneously in W3.

Tip
IFRS codes are based on Company Flow Parameters. If you want to make changes in the relevant field; Check the Use IFRS code box on the Settings > General Settings > Company Flow Parameters page.