How To Set Up a Chart of Accounts in QuickBooks Online
Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.
Mark has researched and reviewed accounting software at Fit Small Business since 2019 and has developed an extensive knowledge of accounting software features and how unique business needs determine the best accounting software.
This article is part of a larger series on Accounting Software.
In this tutorial, you’ll learn how to add, delete, and modify accounts in the QuickBooks Online Chart of accounts list. We’ll also teach you how to import a chart of accounts from an Excel spreadsheet or comma-separated values (CSV) file.
This free tutorial was written to guide you in using QuickBooks Online, our best overall pick for small business accounting software. You’ll gain the most from this tutorial if you follow along in your own QuickBooks account. For those who don’t have an account yet, you can choose between a 30-day free trial or 50% off for three months.
This tutorial is part of our series of Free QuickBooks Tutorials. The video below and the step-by-step illustrated instructions that follow present the same information.
How To Add an Account to the Chart of Accounts List
Step 1: Navigate To Chart of Accounts
First, click on the gear icon on the upper right-hand side of your QuickBooks dashboard, and then select Chart of accounts from the pop-up window, as shown below.
Navigate to Chart of accounts in QuickBooks Online
Step 2: Complete the Account Setup Screen
Next, click the green New button in the upper right corner of the screen to access the account setup window for your new account.
Account setup screen in QuickBooks Online
The account setup screen includes the following fields:
Account Setup Screen in QuickBooks Online
A. Account Type: You must specify an account type from the drop-down menu.
B. Detail Type: Select a detail type from the drop-down menu. The available detail types will vary based on the account type selected. The gray box below the detail type provides an explanation of the detail type selected.
C. Name: Provide a name for your account that will make it easy for you to distinguish when choosing accounts to post transactions. For instance, instead of “Checking Account,” it might be better to include the bank name and the last four digits of the account number, like “US Bank Checking x1234.”
D. Number: Providing a number for your account is optional. If you wish to use account numbers and this field isn’t available, you must enable account numbers as shown in How To Set Up Advanced Settings.
E. Description: You may provide an optional description of the new account.
F. Is sub-account: You can organize your accounts with parent and subaccounts. For instance, you might create a “Utilities Expense” parent account and then create subaccounts for “Electric Expense” and “Gas Expense.” If this is a subaccount, tick the box next to Is sub-account. Then, select the parent account from the drop-down box.
Step 3: Save Your New Chart of Account
When you are satisfied with your answers, click either the green Save and Close button or the drop-down arrow next to it and select Save and New to add another account.
How to Edit an Account in the Chart of Accounts List
To edit an existing account, find the account on the Chart of accounts screen and click the drop-down arrow next to View register. Next, select Edit to open the account setup screen.
Edit an account in QuickBooks Online
The fields available in the account setup screen are the same as discussed in the previous section. Make the needed changes to the account and then click the green Save and Close button.
How to Delete an Account in the Chart of Accounts List
Instead of deleting accounts in QuickBooks Online, you must mark them as inactive. If the account has never been used in a transaction, the account will no longer count toward your maximum number of accounts. If the account has been used in a transaction, the history of the account will be retained, and the account will continue to count toward your maximum.
From the Chart of accounts screen, click the drop-down arrow next to View register for the account you wish to make inactive. Then, select Make inactive from the drop-down list.
Make an account inactive in QuickBooks Online
In the example above, Paul’s Plumbing is making account number 1120, Company Savings Account, inactive. Since the account has been used in at least one transaction, the account will still count toward the maximum number of accounts Paul’s Plumbing can use.
How To View and Print Your Chart of Accounts
From the chart of accounts screen, click the Run Report button on the top right side of the screen to view a copy of your chart of accounts.
After clicking Run Report, a copy of your chart of accounts appears. You can then export your chart of accounts to an Excel file, print it out, or email it if needed.
Chart of accounts screen in QuickBooks Online
After clicking Run Report, a copy of your chart of accounts appears. You can then export your chart of accounts to an Excel file, print it out, or email it if needed.
Sample copy of chart of accounts in QuickBooks Online
How To Import Accounts to the Chart of Accounts List
If you’re transferring your books from another bookkeeping software, you might be able to export your chart of accounts from the prior software into an Excel spreadsheet or CSV file, which can then be imported into QuickBooks Online. Imported accounts will add to—not replace—your current chart of accounts.
Avoid duplicate accounts:
QuickBooks Online won’t import an account if there’s another account with the same name either already in your chart of accounts or import file. After importing your accounts, QuickBooks Online will provide a list of accounts that didn’t import due to duplicates.
Step 1: Prepare Your Spreadsheet
Your spreadsheet must contain columns for the account name, account type, and detail type. You can also include a column for account number if you wish. The spreadsheet can contain other columns, but they won’t be imported into QuickBooks Online. The first line of the spreadsheet should contain a label for each column, which doesn’t necessarily have to match the field name in QuickBooks Online.
Here’s an example spreadsheet ready for import:
Sample spreadsheet to import accounts into QuickBooks Online
Step 2. Import Your Spreadsheet
From the Chart of accounts screen, click the drop-down arrow next to the green New button and select Import.
Import accounts into QuickBooks Online
Next, click the Browse button and select the spreadsheet you prepared for the import.
Upload your import file
After selecting your spreadsheet, click the green Next button in the bottom right corner of the screen (not shown).
Step 3: Map Your Spreadsheet for Importing into QuickBooks
The next screen requires you to map the data in your spreadsheet to the four fields imported by QuickBooks Online. For each QuickBooks Online Field, select the column in your spreadsheet that contains the data.
Mapping account data for importing into QuickBooks Online
Step 4: Verify and Import Your Data
When you’re satisfied with your mapping, click the green Next button. The final screen before importing provides your last opportunity to change any account information or deselect any accounts you don’t wish to import.
Verify account details before importing to QuickBooks Online
After verifying the information is correct, click the green Import button to complete the importing process. The new accounts should now be included in your chart of accounts.
How QuickBooks Creates and Classifies Accounts
QuickBooks Online creates a default chart of accounts list based on the industry you selected when you set up your QuickBooks company. We recommend reviewing this default chart of accounts to determine what accounts need to be added, edited, or deleted.
QuickBooks Online requires detailed information for each account, including both an Account Type and Detail Type. It’s very important that you properly classify accounts so that QuickBooks Online can operate effectively. For instance, you must list your Accounts Receivable account with the Account Type “Accounts Receivable.” Otherwise, QuickBooks Online won’t know to increase this account whenever you issue a new customer invoice. Similarly, your inventory account must have Detail Type “Inventory” so that QuickBooks Online knows which account to increase when you purchase products.
You need to review the default chart of accounts created by QuickBooks. While the default chart is a good place to start, most companies will want to make adjustments to fit their exact needs.
Suggestions for Your Chart of Accounts
Because the chart of accounts is the backbone of your bookkeeping system, it pays to take time now to make sure your list of accounts is complete and appropriate for your business. We recommend having at least the following accounts included in your chart of accounts.
Account Type | Detail Type | Recommendation |
|---|---|---|
Bank | Cash on hand | Create an account to track cash not intended for deposit into a bank account like petty cash |
Bank | Checking | Create a separate account for each checking, savings, or money market account |
Accounts Receivable (A/R) | A/R | At least one A/R account is required to issue invoices to customers |
Other Current Assets | Inventory | You must have at least one inventory account if you buy and sell inventory |
Other Current Assets | Undeposited funds | Every company should have one undeposited funds account to track cash and checks waiting for deposit |
Fixed Assets | Varies | If the company owns fixed assets, it needs at least one account to track the cost of fixed assets |
Fixed Assets | Accumulated depreciation | Companies with fixed assets need at least one account to track the amount of depreciation deducted |
Accounts Payable (A/P) | A/P | You must have at least one A/P account to input and track unpaid bills from vendors |
Credit Card | Credit card | Each credit card account the company possesses should have a separate account in the Chart of Accounts |
Other Current Liabilities | Line of credit (LOC) | Create a LOC account if the company has a LOC with a bank |
Other Current Liabilities | Payroll tax payable | Companies that pay employees must have at least one payroll tax payable account |
Other Current Liabilities | Sales tax payable | Companies that collect sales tax from customers must have at least one sales tax payable account |
Long Term Liabilities | Notes payable | Create a separate notes payable account for each loan the company must repay, including a mortgage |
Equity | Retained earnings | Each company should have a retained earnings account |
Income | Varies | You should have at least one income account for your primary sources of income |
Other income | Interest earned | Create an interest earned account if the company receives interest like from a checking, savings, or money market account |
Expenses | Varies | Create an expense account for each of your major categories of expenses |
Other Expenses | Depreciation | If the company owns depreciable assets, you must have a depreciation expense account |
Wrap Up
Congratulations on completing another tutorial on QuickBooks Online where you learned to add, edit, delete, and import accounts for your chart of accounts list. The next tutorial in our QuickBooks Online Training Course is How To Set Up the Products and Services List. The list of product and service items in QuickBooks Online is extremely important and is central to how QuickBooks simplifies the bookkeeping process.
