Before Adding an Account
Before you can add an account, you must decide the following:
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The account number and description (name) of the account.
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The account type, and normal account balance (debit or credit)
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The account group in which the account belongs, if account groups are used for the company.
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Whether to post transactions in detailed or consolidated form, or to prohibit posting to certain accounts.
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Whether to close an income or expense account to an account specified for a particular account code segment.
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Whether this account is to be used as a control account for a subledger, and if so, for which subledger.
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Whether to reallocate the account balance to other accounts on a regular basis, and if so, to which accounts and in what proportions.
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The currencies in which you want to enter transactions for the account (if you have a multicurrency ledger).
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Whether to store additional information for the account by using optional account fields.
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Whether you want to keep optional fields with transactions you post to the account.
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Whether to maintain quantity data for the account, and, if so, the unit of measure to use.
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Whether to roll up accounts, and which accounts can be rolled up.
Design the chart of accounts carefully before adding any accounts
How you organize your chart of accounts depends on how you intend to use particular features of the General Ledger system.
You must decide:
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Which accounts you need.
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Which account segments each account requires.
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How you will assign account numbers.
Design your chart of accounts carefully. It is much easier to move accounts around before entering them, than to change them afterward.
See also