Charts of Accounts and Other Financial Settings

A quick and successful integration between DEAR and other accounting software depends largely on the quality of the initial setup. One of the critical elements of the initial setup is a Chart Of Accounts. DEAR generates accounting transactions in the background and, at a later stage, these transactions are exported to your chosen accounting software. All settings must be set up before any initial data load occurs (supplier, customer, products, stock on hand), buys, sells, and so on.


DEAR allows changing accounts and tax rules from default for each transaction. This allows users to design an effective Chart of Accounts in order to carry out successful analysis and managerial decisions.


NOTE: The order of priority for financial settings is:

  • Order line (highest priority, will override all other assigned accounts/tax rules)
  • Product
  • Sale/Purchase order document header
  • Supplier/Customer.


Prerequisites:


Table of Contents:


Required Accounts

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DEAR Systems requires the following accounts (with the account settings listed below) to be available to function correctly. 

  • If you are using DEAR standalone, you can create accounts in DEAR by going to Settings -> Reference Books -> Financial -> Chart of Accounts. 
  • If you are using Xero/QBO, you must create accounts in Xero/QBO. They will then be imported into DEAR when you next synchronise your accounts. You can view your Chart of Accounts by going to Settings -> Reference Books -> Financial -> Chart of Accounts, but it will be read-only. 


You can add more accounts to suit your business requirements – make sure to consult with your accountant or bookkeeper before adding or editing any accounts.


NOTE: Some accounts created in Xero and QBO require different settings to map correctly. Please check Xero Integration - Basic and QuickBooks Integration - Basic for more information if you are using these accounting systems. 


Already created by DEAR:

  • Accounts Receivable
  • Accounts Payable
  • Sales Tax (GST, VAT...)
  • Sales/Revenue.


Required accounts: 

AccountAccount TypeSystem AccountAccepts Payments
Inventory ControlCurrent AssetNone

Doesn't accept payments

Inventory DiscrepancyExpenseNone

Doesn't accept payments

Cost of Goods SoldDirect Cost (DEAR standalone/Xero)
Cost of Sales - Supplies and Materials (QBO)
None

Doesn't accept payments


Default RevenueRevenueNone

Doesn't accept payments

Tax LiabilityLiabilityNone

Doesn't accept payments

Supplier DepositsCurrent AssetNoneAccepts payments
Customer CreditsCurrent LiabilityNoneAccepts payments



Optional Accounts:

Inventory Accrual/Stock in Transit (requires Inventory Accrual to be enabled)

AccountAccount TypeSystem AccountAccepts Payments
Inventory Accrual (Goods Received, Not Invoiced)Current Asset OR
Current Liability
NoneDoesn't accept payments
Stock in Transit (Goods Invoiced, Not Received)Current AssetNoneDoesn't accept payments


Gift Card Liability (requires Gift Cards to be enabled)

AccountAccount TypeSystem AccountAccepts Payments
Gift Card LiabilityCurrent LiabilityNoneAccepts payments


See Accounts and Chart of Accounts for more information about creating accounts in DEAR. 


Account Mapping

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Make sure your accounts in DEAR and in your accounting system are correctly linked with Account Mapping.


NOTE: You can use DEAR without completing this account mapping. If you attempt to use functions that are linked to an unmapped account, DEAR will report an error and may be unable to complete the operation.


NOTE: If you have optional accounts such as Inventory Accrual Transactions and Gift Cards, these will not be visible unless they are enabled in the General Settings.  


To perform Account Mapping:

  1. Navigate to Settings -> Reference Books -> Financials -> Account Mapping.
  2. Check all accounts are correctly linked together.
  3. Save any changes.




Product-level Customisation

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DEAR allows you to specify inventory control, revenue and COGS accounts at the product level. This allows revenue analysis to occur at the product level if your business needs require it. Create additional accounts either through Settings -> Reference Books -> Financials -> Chart of Accounts in DEAR or through your accounting system and assign them on the details screen. 


Tax Rules can also be specified at the product level. 




Supplier-level and Customer-level Customisation

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Further customisation can be done at the Customer and Supplier level.


The Supplier screen allows you to change the default Accounts Payable account, Tax Rule, and Payment Terms that will be applied when you process an invoice from the given supplier. 


If you set a Supplier currency different to your base currency, DEAR will automatically apply a currency conversion rate effective at the time when the document is created. This field can be manually overridden to enter the actual rate of conversion.



The Customer screen allows you to change the Accounts Receivable account and default Sale/Revenue account. This will allow you to implement ‘customer-centric’ revenue analysis.


You are also able to change the Tax Rule and Payment Terms that will be applied when creating Invoices for a given customer. If you set a Customer currency that is different from your base currency, DEAR will automatically apply a currency conversion rate effective at the time the document is created. This field can be manually overridden to enter the actual rate of conversion.


 


Purchase/Sale Invoice-level Customisation

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All defaults can be overwritten again at the document level at the time of creating a new purchase or sale invoice. 


The Sale screen allows you to modify the Sale account and Tax Rule. You are also able to adjust the Tax Rule at the invoice line level if required. Additional costs can be allocated to a different sale account, and different tax treatment can be applied as well. When selling to other countries, DEAR will pre-fill the conversion rate field with the most recent rate. This can also be manually amended to reflect the actual rate. 




The Purchase screen allows you to modify the Inventory Account where the stock should be allocated. You are also able to adjust the Inventory Account at the invoice line level if required. Tax Rules can also be changed at the order and/or order line level. 


Additional costs can be allocated to the same Inventory Account to form the landing cost of your stock; alternatively, it can be any other expense account if those expenses are classified differently by your business. 


You can specify different Tax rules for additional costs as well. When selling to other countries, DEAR will pre-fill the conversion rate field with the most recent rate, which can be manually amended. 



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