Step 3 — Accounting structure: required accounts

What this step does

Step 3 displays the chart of accounts (list of all financial accounts) that will be created based on your industry choice in Step 2. You review these accounts, confirm their names and types, and can add or remove accounts if needed. This is a critical step—your chart of accounts is the foundation of all financial reporting.

Before you start

• Understand basic account types: Assets (what you own), Liabilities (what you owe), Equity (owner's stake), Revenue (income), Expenses (costs).
• If you have a prior accounting system or records, have your old chart of accounts available for reference.
• Know if your company operates in multiple currencies—the wizard may ask you to select your base currency here or in the next step.

Steps

1. Review the proposed accounts. The wizard displays the default chart grouped by type (Assets, Liabilities, Equity, Revenue, Expenses). Each account shows:

   • Account name
   • Account code (used internally for sorting)
   • Account type (asset, liability, etc.)
   • A brief description

2. Verify account names. Check that account names match your company's terminology or local regulations. For example:

   • "Accounts Receivable" may be called "Trade Receivables" or "Customer Invoices."
   • "Cost of Goods Sold" may need adjustment based on your industry.

3. Add custom accounts (if needed). Click the "Add Account" or "+" button to create additional accounts not in the default list. Enter:

   • Account name
   • Account code (optional, but recommended)
   • Account type
   • Parent category (for hierarchical organization)

4. Remove accounts you don't need. If the default list includes accounts your business will never use, you can delete them here. (Note: you can also add accounts later from Settings → Accounts, but doing it here is cleaner.)

5. Confirm your chart. Once satisfied, select Continue. The system creates all accounts in the database.

Accounting impact

The accounts you confirm here become the backbone of your financial system. Every transaction (invoice, expense, payment) is recorded by debiting one account and crediting another. A well-organized chart ensures accurate profit/loss reporting, balance sheet accuracy, and easy financial audits.

Example: For a pharmacy:

• Revenue account: "Sales — Pharmaceuticals"
• Cost of Goods Sold: "Cost of Pharmaceuticals Sold"
• Inventory accounts: "Pharmaceutical Inventory — (quantity) units"
• Accounts Receivable: "Customer Credits (Insurance, etc.)"
• Accounts Payable: "Vendor Credits"

Tips & common mistakes

• Account codes: use a consistent numbering scheme (e.g., assets = 1000–1999, liabilities = 2000–2999). This makes the chart easier to navigate.
• Do not over-customize now: start with the defaults. You can rename, add, and reorganize accounts after setup without breaking existing transactions.
• Unused accounts: leaving unused accounts in the chart does not hurt, but it can clutter reports. Remove them if you are certain you will not need them.
• Currency accounts: if you operate in multiple currencies, confirm that accounts exist for each currency. Some modules (e.g., multi-currency pricing) may create separate accounts automatically.
• Reserve accounts: be cautious about removing reserve, suspense, or clearing accounts—these are often used by the system internally for temporary transactions.