Chart of accounts

 

Updated: November 1, 2016

Applies To: Dynamics Marketing

System_CAPS_importantImportant

Microsoft Dynamics Marketing is scheduled to be retired on May 15, 2018. After that date the service will no longer be available. Please plan accordingly. For details, see the customer FAQ. You can also read the blog post Microsoft Dynamics Marketing service will be discontinued, and learn what’s coming next.

Set up different accounts in Microsoft Dynamics Marketing to track revenue and expenses. Dynamics Marketing provides the following account types:

  • Asset Accounts:

    Use asset accounts to track the value of depreciable assets you purchase and own that aren't likely to be converted into cash within a year, such as equipment or furniture.

  • Bank Accounts:

    Bank accounts are asset accounts used to pay bills.

  • Cost of Goods Sold (COGS) Accounts:

    Use COGS accounts to track the value of the cost of goods and materials held in inventory and then sold.

  • Expense Accounts:

    Use expense accounts to track marketing expenses such as supplies, advertising, etc.

  • Liability Accounts:

    Use liability accounts to track the value of liabilities that are scheduled to be paid within one year, such as purchases, sales and short-term loans.

  • Revenue Accounts:

    Use revenue accounts to track revenue from services such as design, copywriting, etc.

  • Tax Accounts:

    Use tax accounts to track sales tax, withholding taxes, value added taxes, and other tax payments.

  • Payment Holding Accounts:  

    Payment holding accounts are a type of current asset account used to hold payments until they are deposited into a bank account. Payment holding accounts are used to temporarily hold cash receipts.

Chart of accounts

The chart of accounts is a listing of all the accounts in the general ledger; each account is accompanied by a reference number. To set up a chart of accounts, define the various accounts to be used by the business first. Each account should have a number to identify it. For very small businesses, three digits may suffice for the account number, though more digits are desirable in order to allow for new accounts to be added as the business grows. With more digits, new accounts can be added while maintaining the logical order. Complex businesses may have thousands of accounts and require longer account reference numbers. It is worthwhile to put thought into assigning the account numbers in a logical way, and to follow any specific industry standards. An example of how the digits might be coded is shown in this list:

Accounts numbering

  • 1000 - 1999: asset accounts

  • 2000 - 2999: liability accounts

  • 3000 - 3999: equity accounts

  • 4000 - 4999: revenue accounts

  • 5000 - 5999: cost of goods sold

  • 6000 - 6999: expense accounts

  • 7000 - 7999: other revenue (for example, interest income)

  • 8000 - 8999: other expense (for example, income taxes)

    By separating each account by several numbers, many new accounts can be added between any two while maintaining the logical order.

Accounts definition

There is a trade-off between simplicity and the ability to make historical comparisons. Keeping the number of accounts to a minimum has the advantage of making the accounting system simple initially. If you start with a small number of accounts, as certain accounts acquire significant balances they would be split into smaller, more specific accounts. However, following this strategy makes it more difficult to generate consistent historical comparisons. For example, if the accounting system is set up with a miscellaneous expense account that later is broken into more detailed accounts, it then would be difficult to compare those detailed expenses with past expenses of the same type. In this respect, there is an advantage to organizing the chart of accounts with a higher initial level of detail.

Some accounts must be included due to tax reporting requirements. For example, in the U.S. the IRS requires that travel, entertainment, advertising, and several other expenses be tracked in individual accounts. One should check the appropriate tax regulations and generate a complete list of such required accounts.

Other accounts should be set up according to vendor. If the business has more than one checking account, for example, the chart of accounts might include an account for each of them.

Accounts order

Balance sheet accounts tend to follow a standard that lists the most liquid assets first. Revenue and expense accounts tend to follow the standard of listing the items most closely related to the operations of the business first. For example, sales would be listed before non-operating income. In some cases, part or all of the expense accounts simply are listed in alphabetical order.

To view the Chart of Accounts, users must have an Edit/View Chart of Accounts User role. More information: License, create, and approve users

The following are examples of some of the accounts that might be included in chart of accounts.

Asset Accounts

Current Assets

1000 Petty Cash

1010 Cash on Hand (e.g. in cash registers)

1020 Regular Checking Account

1030 Payroll Checking Account

1040 Savings Account

1050 Special Account

1060 Investments - Money Market

1070 Investments - Certificates of Deposit

1100 Accounts Receivable

1140 Other Receivables

1150 Allowance for Doubtful Accounts

1200 Raw Materials Inventory

1205 Supplies Inventory

1210 Work in Progress Inventory

1400 Prepaid Expenses

1410 Employee Advances

1420 Notes Receivable - Current

1430 Prepaid Interest

1470 Other Current Assets

Fixed Assets

1500 Furniture and Fixtures

1510 Equipment

1520 Vehicles

1530 Other Depreciable Property

1540 Leasehold Improvements

1550 Buildings

1560 Building Improvements

1690 Land

1700 Accumulated Depreciation, Furniture and Fixtures

1710 Accumulated Depreciation, Equipment

1720 Accumulated Depreciation, Vehicles

1730 Accumulated Depreciation, Other

1740 Accumulated Depreciation, Leasehold

1750 Accumulated Depreciation, Buildings

1760 Accumulated Depreciation, Building Improvements

Other Assets

1900 Deposits

1910 Organization Costs

1915 Accumulated Amortization, Organization Costs

1920 Notes Receivable, Non-current

1990 Other Non-current Assets

Liability Accounts

Current Liabilities

2000 Accounts Payable

2300 Accrued Expenses

2310 Sales Tax Payable

2320 Wages Payable

2330 401-K Deductions Payable

2335 Health Insurance Payable

2340 Federal Payroll Taxes Payable

2350 FUTA Tax Payable

2360 State Payroll Taxes Payable

2370 SUTA Payable

2380 Local Payroll Taxes Payable

2390 Income Taxes Payable

2400 Other Taxes Payable

2410 Employee Benefits Payable

2420 Current Portion of Long-term Debt

2440 Deposits from Customers

2480 Other Current Liabilities

Long-term Liabilities

2700 Notes Payable

2702 Land Payable

2704 Equipment Payable

2706 Vehicles Payable

2708 Bank Loans Payable

2710 Deferred Revenue

2740 Other Long-term Liabilities

Equity Accounts

3010 Stated Capital

3020 Capital Surplus

3030 Retained Earnings

Revenue Accounts

4000 Sales

4060 Interest Income

4080 Other Income

4540 Finance Charge Income

4550 Shipping Charges Reimbursed

4800 Sales Returns and Allowances

4900 Sales Discounts

Cost of Goods Sold

5000 Cost

5050 Raw Material Purchases

5100 Direct Labor Costs

5150 Indirect Labor Costs

5200 Heat and Power

5250 Commissions

5300 Miscellaneous Factory Costs

5700 Cost of Goods Sold, Salaries and Wages

5730 Cost of Goods Sold, Contract Labor

5750 Cost of Goods Sold, Freight

5800 Cost of Goods Sold, Other

5850 Inventory Adjustments

5900 Purchase Returns and Allowances

5950 Purchase Discounts

Expenses

6000 Default Purchase Expense

6010 Advertising Expense

6050 Amortization Expense

6100 Auto Expenses

6150 Bad Debt Expense

6200 Bank Fees

6250 Cash Over and Short

6300 Charitable Contributions Expense

6350 Commissions and Fees Expense

6400 Depreciation Expense

6450 Dues and Subscriptions Expense

6500 Employee Benefit Expense, Health Insurance

6510 Employee Benefit Expense, Pension Plans

6520 Employee Benefit Expense, Profit Sharing Plan

6530 Employee Benefit Expense, Other

6550 Freight Expense

6600 Gifts Expense

6650 Income Tax Expense, Federal

6660 Income Tax Expense, State

6670 Income Tax Expense, Local

6700 Insurance Expense, Product Liability

6710 Insurance Expense, Vehicle

6750 Interest Expense

6800 Laundry and Dry Cleaning Expense

6850 Legal and Professional Expense

6900 Licenses Expense

6950 Loss on NSF Checks

7000 Maintenance Expense

7050 Meals and Entertainment Expense

7100 Office Expense

7200 Payroll Tax Expense

7250 Penalties and Fines Expense

7300 Other Taxes

7350 Postage Expense

7400 Rent or Lease Expense

7450 Repair and Maintenance Expense, Office

7460 Repair and Maintenance Expense, Vehicle

7550 Supplies Expense, Office

7600 Telephone Expense

7620 Training Expense

7650 Travel Expense

7700 Salaries Expense, Officers

7750 Wages Expense

7800 Utilities Expense

8900 Other Expense

9000 Gain/Loss on Sale of Assets

  1. Choose Home > Budgeting.

    Dynamics Marketing displays active bank accounts and the Chart of Accounts.

  2. Open the Chart of Accounts to display all accounts.

    Dynamics Marketing displays all active accounts you are allowed to see.


When you create a new account, it may already have a balance. If so, you need to create a transaction to enter this amount into the account.

  1. If you haven't entered an opening balance for any accounts, you must first create an Opening Balance Equity account to be able to balance your opening balance transaction.

  2. Create a journal entry on the date as of which the balance is correct in the account and Opening Balance Equity account.

  1. On the Chart of Accounts page, choose New Account New button.

    Dynamics Marketing opens the new Account page.

  2. Enter the information.

    Field

    Description

    Active

    Choose the check box to indicate that the account is active.

    Name

    Enter the name of the account.

    Account #

    Enter the account number. Account numbers must be unique.

    Sub Account of

    Select an existing account from the pull-down menu.

    System_CAPS_noteNote

    Accounts can only be sub-account of accounts of the same account type.

    Type

    Select the account type from the pull-down menu.

    Inventory

    If the Account Type = Cost of Goods Sold, choose the check box to specify that the account is used for tracking inventory.

    Default Bank/Cash Account

    If the Account Type is 'Accounts Payable' or 'Accounts Receivable' the Default Bank/Cash Account pull-down menu is displayed. (Optional.)

    Default Check Format

    If the Account Type is Bank' or 'Cash' the default Check Format pull-down menu is displayed to enable you to select the default check format to use. (Optional.)

    Created by

    Select a contact.

    Secured

    Choose the check box to indicate that the account is 'Secured'. information in Secured accounts cannot be viewed on reports unless the user has the special User role to permit viewing of 'Secured' information.

    Description

    Enter a description of the account. (Optional.)

  3. Choose Submit.

Choose the Security tab to view and change user access privileges:

  • To give a user read access, choose the Can Read check box Check box symbol.

  • To give a user edit access, choose the Can Edit check box Check box symbol.

  • To give all users read access, choose the Can Read check box Check box symbol in the All Users row.

  • To give all users edit access, choose the Can Read check box Check box symbol in the All Users row.

Choose the Secured check box to restrict this account from appearing in reports, unless the user has special permissions. More information: License, create, and approve users

To deactivate an account:

  1. Select the account you want to cancel by choosing its check box Check box symbol.

  2. Choose the Delete buttonDelete button.

    Dynamics Marketing prompts you to confirm the deletion.

  3. Choose OK.

    Dynamics Marketing marks the account canceled.

System_CAPS_noteNote

To view inactive accounts, choose the Show All button.

The general ledger in Dynamics Marketing is the main accounting record of the system. Dynamics Marketing uses a system comprised of a transaction file and a general ledger file. Users create transactions and Dynamics Marketing automatically creates two entries - a debit and credit in the general ledger file.

The main categories of accounts in the general ledger are subdivided into sub categories that include accounts as Cash, Accounts Receivable, Accounts Payable, etc.In traditional accounting paper-based ledger systems, two sets of entries (double entry) are made to record each transaction - Debits and Credits. Each entry is made in a separate account.

For day-to-day transaction entry, Dynamics Marketing uses familiar forms including invoices, expenses, checks, etc. These transactions automatically create entries - also known as posting - in the general ledger. For example for an Expense transaction, Dynamics Marketing makes a single entry in the Accounts Payable account and in the Expense or COGS accounts specified by the user. Posting is the process of recording amounts as credits and debits in the general ledger. Because each bookkeeping entry debits one account and credits another account in an equal amount, the double-entry bookkeeping system helps ensure that the general ledger is always in balance.

The following table shows how transactions post, or don’t post, to the general ledger.

Transaction

Description

Post to general ledger

Booking

Lets users reserve an asset item.

Doesn’t post

Client Quote

Lets users provide clients with a price quote.

Doesn’t post

Credit Memo

Lets users enter a client credit into Dynamics Marketing to apply against an invoice.

Debit Revenue

Credit AR

Expense

Lets users enter an expense to be paid.

Debit Expense

Credit AP

Inventory Purchases (Expenses)

Lets users purchase inventory.

Debit Inventory Credit AP

Inventory Adjustment – Qty Decrease

Lets users adjust the quantity or value of inventory on hand.

Doesn’t post

Inventory Adjustment – Qty Increase

Lets users adjust the quantity or value of inventory on hand.

Doesn’t post

Inventory Adjustment – Unit Cost

Lets users adjust the quantity or value of inventory on hand.

Credit Inventory

Debit Adjustment account

Inventory Use

Lets users move inventory costs to a project.

Credit Inventory

Debit Expense

Invoice

Lets users enter a client bill.

Credit Revenue

Debit AR

Media Expense

Lets users enter an expense to be paid.

Debit Expense

Credit AP

Media Invoice

Lets users enter a client bill.

Credit Revenue

Debit AR

Media Order

Lets users enter a purchase order for media.

Doesn’t post

Media Sales Order

Lets users enter a sales order for a client.

Doesn’t post

Purchase Order

Lets users enter a purchase order.

Doesn’t post

Refund

Lets users enter a client refund into Dynamics Marketing for payment.

Debit Revenue

Credit AP

Retainer

Lets users enter a retainer or advance invoice for a client.

Credit Deferred Revenue

Debit AR

Sales Order

Lets users enter a sales order for a client.

Doesn’t post

Transfer Funds

Lets users move cash from one account to another.

Debit Bank

Credit Bank

Vendor Quote

Lets users enter a vendor quote.

Doesn’t post

Vendor Return

Lets users return inventory to a vendor.

Doesn’t post

Write Check

Lets users pay bills by check.

Credit Bank Debit Expense

Notes

  • Transaction templates never post.

  • The accounts are organization-specific.

Dynamics Marketing lets users associate financial transactions with a myriad of entities including clients, vendors, locations, departments, jobs, events, campaigns, etc. These transactions permit users to analyze financial results with more detail than is possible using the general ledger and traditional accounting reports such as Income Statements and Balance Sheets.

Use the journal-entry function to create transactions directly in the general ledger. Note that journal entries are not associated with clients, vendors, locations, departments, jobs, events, campaigns, etc. More information: Manage journal entries

Financial and general ledger accounts are designed for marketing budget management only. Financial features are restricted to the limits stated in the Security and Financial Disclaimer. Microsoft Dynamics Marketing is not designed to comply with country/region-specific laws, regulations, or common business practices.

Show: