Chart of Accounts in QuickBooks
If you’re new to QuickBooks Online, one of the most important tools you’ll encounter is the Chart of Accounts. Think of it as the financial backbone of your business, where every dollar gets categorized, tracked, and reported.
What Is the Chart of Accounts?
The Chart of Accounts (COA) is a list of all the categories your business uses to classify income, expenses, assets, liabilities, and equity. It’s how QuickBooks knows where to place each transaction—whether you’re recording a sale, paying a bill, or buying supplies.
Key account types include:
Assets – What your business owns (cash, equipment, inventory)
Liabilities – What your business owes (loans, credit cards)
Income – Money earned from sales or services
Expenses – Costs of running your business
Equity – The owner’s interest in the business
Each account acts like a digital filing cabinet, helping you stay organized and compliant.
How to Customize Your Chart of Accounts in QuickBooks Online
The image below displays a screenshot of a QuickBooks Online Dashboard. To access the Chart of Accounts, click on the Settings or gear icon at the top-right corner. ⚙️
QuickBooks Online Dashboard
Then select (Your Company > Chart of Accounts).
Settings (gear icon) > Your Company > Chart of Accounts
This can also be accessed by clicking on the bar on the left side of the dashboard and clicking on (Transactions > Chart of Accounts).
Menu > Transactions > Chart of Accounts
As seen below, the chart of accounts dashboard is opened. To create a new account, click on the green “New account” bar.
Chart of accounts > New account
On the “New account” menu, you can add account information. In this example, an expense for the Truck repair is created as a company expense with further detail that it is a Repair and Maintenance expense. In addition, the Truck repair will appear as a subcategory of the Maintenance and Repair expense category as checked by Make this a subaccount. If you scroll down further on the new account menu, you also have the option of marking the expense taxable or not.
New account menu
As can be viewed below, the Truck repair expense is added to the Chart of accounts. The P&L between the detail type and account type means that the expense will be displayed in the profit and loss statement.
Truck repair added as a repair and maintenance expense
Common Accounts for Small Businesses
Here’s a starter list most businesses should have in QuickBooks Online:
- Income – Sales, Service Income, Consulting Revenue
- Expenses – Rent, Office Supplies, Advertising, Software Subscriptions
- Assets – Bank Accounts, Accounts Receivable, Equipment
- Liabilities – Credit Card, Payroll Taxes Payable, Loan Payable
- Equity – Owner’s Draw, Retained Earnings
Mistakes to Avoid
Overcomplicating your Chart of Accounts (too many categories = confusion)
Using the wrong account type (e.g., putting a loan under income)
Not reviewing your COA regularly to merge or archive unused accounts
Bottom Line: Clean Accounts = Clear Decisions
The Chart of Accounts is more than just a list—it’s the structure that supports every financial decision you’ll make. A well-built COA gives you clarity, control, and confidence in your numbers.
Want Help Setting Up or Cleaning Your QuickBooks Chart of Accounts?
We offer free estimates and QuickBooks Online setup support for small business owners.