Plan your chart of accounts

This topic provides information that will help you plan the chart of accounts for your organization.

To track and maintain financial information in an organization, you can set up a chart of accounts. A chart of accounts is a collection of accounts that define a financial framework. To further track the transactions in these accounts, you can add segments. These segments are known as financial dimensions. For example, an expense account might include financial dimensions that are named Department, Cost center, and Purpose. User-defined rules determine how financial dimensions are attached to the main accounts and to other financial dimensions, and also how transactions are entered. These user-defined rules are known as account structures and advanced rules.

The chart of accounts is a structured list of a legal entity's general ledger accounts. The list is used to prepare financial reports for authorities and owners. The accounts are first grouped into types of accounts and then further aggregated into larger categories. At the most general level, the accounts are grouped as revenues and costs (operating accounts), and assets and liabilities (balance accounts).

A chart of accounts can be shared and used by any legal entity in an organization. The chart of accounts that is used by a legal entity is defined on the Ledger page.

Here are some of the factors that you must consider when you plan the structure of the chart of accounts for your organization:

  • The reporting requirements of the country or region where your organization is based
  • The reporting requirements of your legal entity
  • The degree of specification that is required, both for both external organizations and for your organization

You create the chart of accounts on the Chart of accounts page. You can create main accounts from the Chart of accounts page or the Main accounts page. Your main accounts shouldn't use any special characters that are used as delimiters for chart of accounts. Otherwise, you might experience instability, or you might always have to use lookups or the dialog box when you enter combinations of accounts and dimensions. For more information, see Create a main account.

Note

In Microsoft Dynamics for Finance and Operations version 8.0 (April 2018), you can modify the chart of accounts delimiter from the General ledger parameters page.

It's a good idea to link the main accounts to main account categories, so that you can take advantage of the default financial reports without having to make any modifications. Therefore, you can more quickly and easily design and maintain reports.

You create account structures on the Configure account structures page. Account structures define valid combinations. These combinations, together with main accounts, form a chart of accounts. For more information, see Create account structures.

Legal entity overrides

Not all main accounts are valid for all legal entities, and some main account might be relevant only for a specific period. In this scenario, you can use the Legal entity overrides section to identify the companies that the main account should be suspended for, the owner, and the period when the dimension is active. The overrides at the shared level can't be more restrictive than the overrides at the legal entity level.

For more information, see the following topics: