Adding Account Numbers to your Chart of Accounts.
Note: This next section is only required if you wish to review your Chart of Accounts and the "Account Numbers" and ranges in your Chart of Accounts in Xero.
Realigning your Account numbers to your chart of accounts will not affect the functions of reporting, it can in some circumstance help in the financial entry of transactions, by allowing users to type the account code, rather than the text (both will work).
Common Account Number Ranges
In principal ranges can be defined for any purpose, it is however recommended that the accounts are ranged to help in the grouping and reporting. The following represents a common table of accounting number ranges. The ordinal ranges can be arranged with or without the dash, in hundreds (100) or thousands (1000), it is really up to you and your accountant to work out the best CoA that fits the needs of the business.
|Account Range (Commencing Ordinal)||Financial Reporting Purpose|
|4-0000||Income / Revenue|
|5-0000||Cost of Goods Sold|
Good practice is to align your direct costs of sales to the direct revenues which are reported. This can help to identify your profitability of specific services or groups of services or products that you sell.
Cost of Goods Sold (COGS or COS) should align to your revneue in numbering, so that it can make coding of transactions and mapping Revenue and COGS in ConnectWise GL Accounts setup more intuitive.
|Revenue Account||Cost of Goods Sold|
The example also provides for the Wise-Sync SLI grouping, allowing simple entry of HTG Group Members Quarterly Figures.