What is a Chart of Accounts and why does it matter in Propio?

A Chart of Accounts (COA) is a structured list of all accounts used by a business to record financial transactions. It serves as the foundation for organizing financial data, facilitating accurate reporting, and ensuring compliance with accounting standards.

1. Assets: Resources owned by the business that provide future economic benefits. Examples include cash, accounts receivable, inventory, and property.

2. Liabilities: Obligations the business owes to external parties. This category encompasses accounts payable, loans, and mortgages.

3. Equity: The owner's residual interest in the business after liabilities are deducted from assets. Common equity accounts include owner's capital and retained earnings.

4. Revenue: Income generated from the primary operations of the business, such as sales or service fees.

5. Expenses: Costs incurred in the process of earning revenue, including rent, utilities, salaries, and supplies.

Organizing accounts into these categories aids in the systematic recording and reporting of financial information, ensuring clarity and consistency.

Customizing your COA to align with your business's specific needs is essential for effective financial management.

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Next →Standard COA Templates