Understand the Chart of Accounts
Your Chart of Accounts is the complete list of ledger accounts your organisation uses to classify every transaction. This guide explains what it is, how accounts are described, and which accounts you can and cannot post to.
Before you begin
- You need to be signed in with the organisation selected.
- Go to Settings → Chart of Accounts (or open the Settings hub and choose Chart of Accounts).
What the Chart of Accounts is
Every amount you record — a sale, a bill, a payment, some VAT — is filed against a ledger account, and the balances of those accounts drive your financial reports. The Chart of Accounts is that list of accounts.
You do not have to build it from scratch. A starter Chart of Accounts is created for you when the organisation is set up, matched to the Business Type you chose (for example General business, SaaS / Subscriptions, Retail / E-commerce or Professional Services). You can then extend or adjust it — see Add or edit a ledger account.
How each account is described
The Chart of Accounts page lists your accounts with these columns:
- Code — a short unique code for the account (for example 4100).
- Name — what the account is called (for example "Sales" or "Office Costs").
- Type — the accounting category: Asset, Liability, Equity, Income or Expense.
- Role — the special job an account does in Sales Scribe's automatic bookkeeping, if any (see below).
- Status — Active or Archived.
- Postable — whether transactions can be posted directly to the account.
You can filter the list by Account Type, and tick Include Archived to show archived accounts.
[Screenshot required: Chart of Accounts list showing the Code, Name, Type, Role, Status and Postable columns]
Accounts you cannot post to directly
Some accounts are marked with a badge because they are protected:
- Control accounts — your Accounts Receivable (AR) Control and Accounts Payable (AP) Control. These hold your total customer and supplier balances, and Sales Scribe maintains them automatically as you issue invoices and record payments. You cannot post to them by hand or change their code and type.
- System accounts — accounts Sales Scribe relies on internally. Some fields are locked and they cannot be deleted.
Accounts can also be flagged as Bank or Cash where relevant. An account's Postable setting controls whether you can post to it directly at all — non-postable accounts are usually headings or totals.
Roles: how Sales Scribe finds the accounts it needs
When Sales Scribe posts something for you — VAT on an invoice, a customer's balance, an exchange difference, a rounding penny, a bad debt, a shipping charge, a bank account's opening balance — it finds the account to use by its role, never by its name or code. So you may rename or recode any account freely: "Bad Debt Expense" can become "Irrecoverable receivables" and write-offs still find it. Every starter chart carries an account for each role. If your chart was created before a role existed, the first feature that needs it looks for an account with the original name (for example an Expense account called Bad Debt Expense) and takes it on; if none exists, it tells you which account to add.
Where money the owners take out is posted
Every starter Chart of Accounts includes one Equity account for money taken out of the business by its owners, named for what your organisation actually is:
| Legal form | Account (code 3050) |
|---|---|
| Limited company and other registered forms | Dividends |
| Sole trader | Owner's Drawings |
| Partnership | Partners' Drawings |
| Limited liability partnership | Members' Drawings |
You post to it in the ordinary way — taking a dividend or a drawing is a transaction you record, not something that happens only at the year end. It is deliberately separate from Retained Earnings, which is the accumulated profit left in the business and which only the year end should ever move.
The wording differs because the mechanism does. A sole trader does not declare dividends, and an account labelled as though they did would be asserting something untrue about their business.
If your Chart of Accounts was created before this account existed, the page offers to add it, named for your legal form. It has to be added this way rather than through Add Account: the account carries a role, and the ordinary form deliberately cannot set one — otherwise any account could be turned into the VAT control account.
Accounts held by a person
A director's loan account — or a member's loan, or a partner's current account — is an ordinary ledger account with one extra fact recorded against it: who holds it. You will see it in the list named with its holder, for example Director's Loan – Jane Smith.
Two things are worth knowing:
- The holder's name is not stored in the account's name. It is added wherever the account is displayed, which is why the same account reads as (former director) everywhere at once when its holder resigns.
- These accounts are created when first needed, from the person's page rather than here, and there is one per person for life. You can also point one at an account you already keep, without changing its code, balance, history or type.