Chart of Accounts: A Copy-Paste Template and Setup Checklist
A complete copy-paste chart of accounts template for a small business, how the numbering convention works, four steps to build your own, the five mistakes that make a chart useless, and a setup checklist.
This article is for educational and informational purposes only and does not constitute financial, tax, legal, or accounting advice. Groundwork is not a licensed financial advisor, accountant, or attorney. Before making decisions, consult a qualified professional.
A chart of accounts is the list of every category your business records money against: your bank accounts, your revenue lines, your expenses, what you own and what you owe. It is the filing system your bookkeeping drops each transaction into. Every account gets a number, and the number ranges follow a convention almost everyone uses: 1000s for assets, 2000s for liabilities, 3000s for equity, 4000s for revenue, 5000s and up for expenses. Building one takes four steps: start from a standard template, cut anything you will not use, add the handful of categories specific to how you actually make money, then leave gaps in the numbering so you can add more later without renumbering everything. The copy-paste template below is a complete working chart for a small business. Most owners get this wrong in the same direction, which is building something far too detailed, and the section on mistakes explains why that quietly makes your reports useless.
Nobody has ever been excited about a chart of accounts. It is a list of categories. It sounds like the most skippable possible thing to spend an afternoon on.
Then six months later you want to know what you actually spend on software, and the answer is spread across four categories called Software, Subscriptions, Tools, and Office Expenses, because you invented each one on a different Tuesday. That is what a chart of accounts prevents. Half an hour now, or an afternoon of untangling later.
So the template comes first, before the explanation. Copy it, then read the rest if you want to know why it is shaped that way.
The Copy-Paste Template
This is a complete working chart of accounts for a small business or freelancer. Paste it into a spreadsheet, or use it as the reference while you set up your accounting software. Delete freely: a chart you do not use every line of is fine, a chart with categories you do not understand is not.
NUMBER ACCOUNT NAME TYPE 1000 ASSETS 1010 Business checking account Asset 1020 Business savings account Asset 1030 Petty cash Asset 1100 Accounts receivable Asset 1200 Prepaid expenses Asset 1400 Equipment Asset 1410 Accumulated depreciation Asset (contra) 2000 LIABILITIES 2010 Accounts payable Liability 2020 Credit card payable Liability 2100 Sales tax payable Liability 2200 Payroll liabilities Liability 2400 Loans payable Liability 3000 EQUITY 3010 Owner's investment Equity 3020 Owner's draw Equity 3900 Retained earnings Equity 4000 REVENUE 4010 Product sales Revenue 4020 Service revenue Revenue 4030 Recurring revenue Revenue 4900 Discounts and refunds Revenue (contra) 5000 COST OF SALES 5010 Materials and inventory Cost of sales 5020 Subcontractors Cost of sales 5030 Payment processing fees Cost of sales 6000 OPERATING EXPENSES 6010 Advertising and marketing Expense 6020 Software and subscriptions Expense 6030 Professional fees Expense 6040 Rent and utilities Expense 6050 Insurance Expense 6060 Salaries and wages Expense 6070 Travel Expense 6080 Meals and entertainment Expense 6090 Office supplies Expense 6100 Bank fees Expense 6110 Training and education Expense 6900 Other expenses Expense
Select the block above and copy it. Gaps in the numbering are deliberate, and the next section explains what they are for.
What a Chart of Accounts Actually Is
Think of it as the set of labelled drawers your money gets filed into. Every transaction your business makes has to land in one of them. When you categorise a bank payment as "Software and subscriptions," you are choosing a drawer from this list.
That is the whole idea. What makes it matter is what happens downstream: your profit and loss statement is nothing more than your revenue and expense accounts added up, and your balance sheet is your asset, liability, and equity accounts added up. The reports are not separate documents someone prepares. They are this list, totalled.
Which explains why a messy chart produces useless reports. If software spending is split across four categories, no report will ever tell you what you spend on software. The information is technically in there, and practically it is gone.
Aziz's take: The moment this stops being abstract is the first time you try to cut costs. You sit down to find something to trim, open your expense report, and the largest line is a category called "General" holding nine hundred pounds of things you cannot identify. You cannot cut what you cannot see. A chart of accounts is not bookkeeping neatness, it is the difference between having an opinion about your costs and having a fact.
How the Numbering Works, and Why It Is Worth Following
The number ranges are a convention rather than a rule, but they are near-universal, and following them means any bookkeeper or accountant who ever looks at your books understands them immediately.
1000s
Assets. What the business owns or is owed.
2000s
Liabilities. What the business owes.
3000s
Equity. What the owner has put in or taken out.
4000s
Revenue. Money earned.
5000s+
Costs and expenses. Money spent.
The first digit tells you the type. Everything else is organisation within that type.
The gaps matter more than the numbers. Notice the template jumps from 1030 to 1100, and from 6110 to 6900. That space is deliberate. When you add a new expense category next year, you want a free number sitting next to its relatives rather than having to bolt it on at the end or renumber everything below it. Number in tens, leave the hundreds free, and your chart can grow for years without a reorganisation.
One more convention worth knowing: contra accounts, like accumulated depreciation or refunds, sit next to the account they reduce and work in the opposite direction. A refund is filed under revenue at 4900 because it is negative revenue, not an expense. Filing refunds as an expense is a common error and it overstates both your income and your costs at the same time.
How to Build Yours: Four Steps
Step 1: Start from the template, do not start from blank
Building from scratch invents categories that will not match anything standard, and it is the slowest possible route. Copy the block above and edit down. Your accounting software also ships a default chart, which is a reasonable starting point for the same reason.
Step 2: Delete everything you will not use
No inventory? Delete materials and inventory. No employees? Delete payroll liabilities and wages. A shorter chart is a better chart, because every category you keep is a decision someone has to make on every future transaction. Deleting is the step people skip, and it is the one that does the most good.
Step 3: Add the few categories specific to how you make money
This is the part no template can do for you, and it is where the chart earns its keep. Split revenue by the lines you actually want to compare: if you do retainers and one-off projects, those are two revenue accounts, because someday you will want to know which is growing. Same for any expense large enough that you would want to see it move. The test is simple: would you ever want a report on this by itself? If yes, it is its own account.
Step 4: Leave gaps and write down what each account means
Number in tens as described above. Then, for anything ambiguous, write a one-line note about what belongs in it. Does a domain renewal go in software or office supplies? Whichever you choose is fine, as long as you choose once and it is written down. This note is what keeps the chart consistent when someone else does the categorising, or when you return to it in eight months having forgotten your own logic.
Chart of Accounts Versus General Ledger
These get confused constantly, and the distinction is simple once you see it.
The chart of accounts is the list of categories. The general ledger is the actual transactions filed inside them. Chart is the empty filing cabinet with labelled drawers; ledger is the paperwork in the drawers.
So the chart of accounts is a structure you design once and adjust rarely, while the general ledger grows every day the business trades. Both are built on double-entry bookkeeping, which is the method that decides how each transaction gets recorded into those accounts. If the ideas of debits and credits are not solid yet, that guide covers them with worked examples.
The Five Mistakes That Make a Chart Useless
- Too much detail. The most common error by a distance. Eleven separate software categories does not give you better information, it gives you eleven near-empty reports and a decision to make every time you categorise anything. If two categories would never lead to different actions, merge them.
- A "General" or "Miscellaneous" account that grows. Fine as a temporary parking space, dangerous as a habit. Once it is one of your largest expense lines, your reports have stopped describing your business. Review it monthly and re-file what is in there.
- Mixing personal and business. Personal spending run through the business chart contaminates every report and creates a real problem at tax time. It belongs in owner's draw, not in expenses.
- Renaming or deleting accounts that have history. Change an account after a year of transactions and your prior-period comparisons quietly break. Make accounts inactive rather than deleting them, and add new ones instead of repurposing old ones.
- Filing refunds and discounts as expenses. They are negative revenue and belong in the 4000s. Putting them in expenses inflates your reported revenue and your reported costs simultaneously, which makes your margins look wrong in both directions.
The Setup Checklist
Run through this once when you build the chart, then revisit it once a year.
- Every account has a number, and the first digit matches its type.
- Numbering leaves gaps, so a new account can slot in beside its relatives.
- Every account you kept is one you can define in a sentence.
- Revenue is split by the lines you would genuinely want to compare.
- Anything ambiguous has a one-line note saying what belongs in it.
- There is no category you would be embarrassed to explain to an accountant.
- "General" or "Miscellaneous" is either absent or genuinely small.
- Personal spending has a home in equity, not in expenses.
- The chart fits on one screen. If it does not, you probably have too much detail.
Once the structure is right, the reports built on it become trustworthy. Our guide to reading a profit and loss statement covers what those reports tell you, and the complete guide to small business finance puts the whole system in context. If you would rather not maintain any of this by hand, bookkeeping software for freelancers covers the tools that manage it for you.
Frequently Asked Questions
