Chart of accounts
See every account with its balance, add your own accounts, and choose the default accounts that invoices, bills, payments and payroll post to.
The chart of accounts is the list of accounts your books are kept in: assets, liabilities, equity, income and expenses, each with a code. Verasol sets up the standard accounts its documents need, such as Accounts Receivable, VAT Output (Payable) or Opening Balance Equity, the first time a posting needs them, and you add the accounts your business needs. Your documents post to these accounts by themselves, through the Default accounts you choose. Some accounts belong to a document type, such as receivables to invoices and payments: only those documents post to them, so each account always agrees with the list of open items behind it.
Find your accounts#
Open Chart of Accounts in the main menu. The tabs show All Accounts (grouped by type), or one type at a time: Assets, Liabilities, Equity, Income and Expenses. Each account shows its Code, its Balance and whether it is Active. Accounts that Verasol created itself, the first time a posting needed them, are marked System.
- 1 Add Account adds an account to the chart.
- 2 The type tabs. A parent account with sub-accounts has an arrow to open them.
- 3 Edit (the pencil) changes an account's name, Arabic name, description, corporate tax treatment and opening balance.
- 4 Deactivate (the switch) takes an account out of use; Delete (the bin) is next to it.
- 5 Default accounts shows which account each kind of posting uses.
The Balance is the total of the posted entries on the account, in AED. For income and expense accounts it is the balance of the current financial year. To see the entries behind a balance, open the general ledger in Reports for that account. See Ledgers and books.
Add an account#
- Click Add Account.
- Enter the Account Code (it must be new in your chart) and the Account Name. You can add an Arabic name, which the Arabic screens show; the books and the English screens keep the English name.
- Choose the Account Type and the Balance Type: Debit (Assets, Expenses) or Credit (Liabilities, Equity, Income).
- To make it a sub-account, choose the Parent Account. Leave None (Root Account) for an account at the top level.
- If the account had a balance when your books in Verasol started, enter it as the Opening Balance. See below.
- Optionally, choose its Corporate Tax Treatment (see below).
- Click Save Account.
1 Account Code, 2 Account Type, 3 Parent Account, 4 Opening Balance, 5 Corporate Tax Treatment, 6 Save Account.
The opening balance of an account#
An Opening Balance is booked straight away, on your opening date (the day before your books start), against Opening Balance Equity. If that date is in a closed period, Verasol refuses it. All the opening balances of the chart are kept in one entry, "Opening balances". You can also enter or change the opening balance later, with Edit. When one of them changes, Verasol reverses that entry and posts it again with the new amounts, on the opening date. Accounts that take their opening balance from their own documents refuse a chart opening balance: receivables, payables, inventory, VAT, fixed assets, the bank accounts and the other control accounts. See Opening balances for where each of those is entered.
Corporate tax treatment#
The Corporate Tax Treatment tells the corporate tax computation how to treat the account: for example Non-Deductible, Partially Deductible with a Deductible Percentage (50% for client entertainment), or Exempt Income. For a non-deductible or partially deductible account you can note the CT Legal Reference. Once the account has postings in a year whose corporate tax return is filed, its treatment can't change: Reopen that return first, change the account, and file the return again. See Corporate tax returns.
Deactivate or delete an account#
- Deactivate an account you no longer use. It is no longer offered on forms and nothing can be posted to it; its past entries stay in the books. Verasol only deactivates an account with no balance (for an income or expense account, no balance in the current financial year) that is not a default account, a bank account's account, or used by items, fixed assets or employees. When an account can't be deactivated, Verasol tells you why, for example the balance it still carries. Activate brings it back.
- Delete is only for an account that has never had an entry, has no sub-accounts, is not a System account and is not used anywhere else. An account with entries can only be deactivated.
Default accounts#
Invoices, bills, payments, payroll, fixed assets, VAT and the other documents post to the accounts on the Default accounts tab. They are grouped as Sales, Purchases, VAT, Bank & cash, Payroll, Fixed assets and Equity & other. Each line says what the account is for and which account it uses now. A line that has never been used shows the standard account, which Verasol creates the first time it is needed.
1 Show sales discounts separately records sales at the full price and each discount on the sales discounts account. Off (the standard), sales are recorded net of discounts. Profit and VAT are the same either way, and only invoices and credit notes posted from then on follow the setting.
2 Control account marks the accounts that only their own documents post to.
3 Change chooses another account for that purpose:
- Click Change on the line.
- Pick one of your active accounts of the right type. Search by code or name narrows the list.
- Optionally, give a Reason (optional).
- Click Use this account.
Only postings made from then on use the new account. Entries already posted never change.
Accounts that only documents post to#
The control accounts, and a few others, take no manual journal entries and no chart opening balances:
| Account | Posted only by |
|---|---|
| Accounts receivable, customer advances | Sales invoices, credit notes and customer payments |
| Accounts payable, advances to suppliers | Bills, debit notes and supplier payments |
| Inventory | Stock adjustments and stock documents |
| Goods received not invoiced | Goods receipts and the bills made from them |
| VAT input, VAT output, VAT payable, VAT refundable | The documents that carry the VAT, VAT returns, VAT payments and refunds |
| Corporate tax payable, corporate tax paid in advance | Corporate tax returns and payments |
| Salaries, deductions and pension payable, end-of-service and leave salary provisions | Payroll runs, end-of-service settlements and payroll opening balances |
| Employee reimbursements payable, employee loans and advances | Expense claims, employee loans and advances |
| Post-dated cheques received and issued | Post-dated cheques |
| Fixed-asset cost, accumulated depreciation and the revaluation surplus | Fixed Assets |
| The account of a bank account in another currency | That bank account's payments, receipts and transfers |
If you try to post a manual entry to one of them, Verasol names the documents to use instead. See Journal entries.
Who can do what#
Everyone in the company can see the chart. The balances and the Default accounts tab need Accounting: journal (view) or Reports and dashboard (view). Adding, editing, deactivating and deleting accounts, and changing the default accounts, needs the permission Accounting: chart of accounts.