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The Chart of Accounts is the list of all accounts your organisation has available to record your transactions. Having the right Chart of Accounts is important for classifying your transactions correctly, keeping your accounts accurate and generating meaningful reports to help you run your business better. Ensuring your Chart of Accounts is correctly linked up between DEAR and your accounting system (if using QBO/Xero) is crucial to the effective functioning of DEAR Inventory.


DEAR provides a default Chart of Accounts, but you can import a chart from your accounting system or your own custom chart. Make sure to consult with your accountant or bookkeeper before adding or editing any accounts. 


DEAR also allows you to select a hierarchical Chart of Accounts structure. This structure allows organisations to consolidate their transactions by levels for summary purposes. Hierarchical COA is not available for accounts integrated with QBO and Xero.


Once your Accounts have been uploaded to DEAR, you can add your Bank Accounts and then enter your Opening Balances


NOTE: This article is about using DEAR in standalone mode. If you are using Xero or QBO, accounts are created in your accounting system and then synchronised with DEAR, where they appear in read-only format. See our guides for QuickBooks Online or Xero if you are using them as your accounting system.


NOTE: All products and services in QBO must have an account to which they are mapped. This mapping will always override the revenue account mapping in DEAR. Unfortunately there is no way to override this from DEAR. Please ensure product level revenue account mapping in DEAR should match the QBO account mapping.


Prerequisites


Table of Contents


Select COA structure

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DEAR allows you to choose between a flat Chart of Accounts structure and a tree, or hierarchical, structure. 


NOTE: Accounts integrated with Xero/QBO only support a flat COA.


In a tree COA, transactions can only be posted to the bottom-most level of sub-accounts. Parent accounts and higher-level sub accounts cannot hold transactions, and are used for organisational purposes only. Adding a sub-account to an account with transactions will trigger a  confirmation message, confirming that all transactions will be moved to the sub-account. Accounts with transactions can not be deleted, but can be deprecated. 


To select a chart of accounts structure, go to Settings → Financial Settings and change Chart of Account type to Tree structure or Flat structure. By default in accounts without Xero or QBO, Tree structure is selected. 



Required Accounts

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DEAR Systems requires the following accounts (with the account settings listed below) 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 SoldExpense - Direct Cost (DEAR standalone/Xero)
Cost of Sales - Supplies and Materials (QBO)
None

Doesn't accept payments


Default RevenueRevenueNone

Doesn't accept payments

Tax LiabilityCurrent LiabilityNone

Doesn't accept payments

Work In ProgressCurrent AssetNoneDoesn't accept payments
In-transit Current AssetNoneDoesn'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


Managing Accounts

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You can create, edit, or delete accounts from your Chart of Accounts when required. If you are using Xero or QBO, accounts are managed through your accounting system and will be read-only in DEAR.


Add an Account

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Add an account:

  1. Navigate to Settings → Reference Books → Financial → Chart of Accounts.  All the different types of accounts are grouped under various class headings (Asset, Liability, Expense, etc.). You can sort the screen to only show a particular class.
  2. Click + Account to add new Accounts.
  1. On the Add a new Account window, enter all the relevant details like Account Type, Account Code, Name of the account and also an optional description.
  2. Enable the account to accept payments by toggling the Accept payments button. This will let you use the account in the payment section of the Purchase and Sales modules.
    • If your organisation has a Tree COA, a field will be added for Parent Account. Selecting NONE for Parent Account will create a new root account. Selecting a parent account will cause the new sub-account to inherit the properties of the parent account, which cannot be changed. Up to 10 levels of sub-accounts are allowed.
    • Adding a sub-account to an account with transactions will trigger a confirmation message, confirming that all transactions will be moved to the sub-account.
  3. Once done, click Save.


Edit an Account

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You may make changes to your Chart of Accounts at any time.


To edit an Account:

  1. On the Chart of Accounts page, click the account to be edited.
  2. On the Edit Account window, make the desired changes to the account, then click Save.


Delete an Account

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An account needs to be archived first before it can be deleted. Once an account has been used in a transaction, it is no longer possible to delete the account. Unused accounts can be archived  so they can no longer be used for transactions.


To delete an Account:

  1. On the Chart of Accounts page, click the account to be deleted.
  2. On the Edit Account window, change the status from Active to Archived
    • Archiving a parent account will also archive its subaccounts.
  3. To archive more accounts, repeat Steps 1-2. Otherwise, click More actions → Delete unused archived accounts to delete the archived accounts.


Import Chart of Accounts

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You can perform bulk actions such as deleting archived accounts and importing/exporting the Chart of Accounts from a spreadsheet by clicking More.


For a large number of Accounts or for quick import of the previous Chart of Accounts, information can be imported in CSV format.


To import a Chart of Accounts:

  1. Navigate to Settings → Reference Books → Financial → Chart of Accounts.
  2. Click More actions → Import. Here, you can click the plus sign on the left-hand corner to expand and see the description of all the required and optional column headings.
  3. Click Export current Chart of Accounts to CSV file to download the default template.
  4. Open the template using Excel or another spreadsheet program, then add, edit, and/or delete accounts, if necessary; then save and Upload back to DEAR.


Reset the Chart of Accounts

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To reset your Chart of Accounts to the default one that comes with your DEAR subscription, click the Use Default button.


Tree Chart of Accounts

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The Chart of accounts lists the accounts used by an organisation to define the entity’s finances and segregate expenditures, revenue, assets and liabilities. Multi-level accounting structures are used by merchants to track segments of companies, business units, or profit centers. This structure allows organisations to consolidate their transactions by levels for summary purposes. 


DEAR allows the option of selecting a tree, or hierarchical COA structure as well as the flat structure in your organisation's financial settings. Tree COAs allow users to create subaccounts for an existing account. Tree COA is not available for accounts integrated with QBO and Xero.


When adding a new account, a field will be added for Parent Account. Selecting NONE for Parent Account will create a new root account. Selecting a parent account will cause the new sub-account to inherit the properties of the parent account. Up to 10 levels of sub-accounts are allowed. 


The following field are inherited from the parent account, and cannot be edited either at account creation or during account editing. 

  • Parent Account
  • Account Type
  • System Account


Transactions can only be posted to the bottom-most level of sub-accounts. Adding a sub-account to an account with transactions will trigger a confirmation message, confirming that all transactions will be moved to the sub-account.


Only the bottom level of sub-accounts can be mapped in Account Mapping, selected in DEAR fields during sales, purchases, etc, and used in journals. 


Parent accounts can be selected to view details when using the following reports:

  • TRIAL BALANCE REPORT
  • BALANCE SHEET REPORT
  • PROFIT & LOSS REPORT
  • ACCOUNT SUMMARY REPORT
  • FINANCIAL PAYMENT DETAILS REPORT


Account Mapping

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Make sure your Chart of Accounts is correctly linked to your key business activities with Account Mapping.


NOTE: If you have optional accounts such as Inventory Accrual Transactions and Gift Cards, these will not be visible.


To perform Account Mapping:

  1. Navigate to Settings → Reference Books → Financial → Account Mapping.
  2. Default accounts have been selected for some activities. Check that these are correct, changing them, if necessary. For those activities that don't have any accounts yet, select the correct accounts from the lists.
  3. Click Save.

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