I am from post U.S.S.R. country and some time before we had compulsory chart of account (now it is not compulsory). In legislation where written accounts and all companies had obligation to use only the chart of accounts, written in legislation.
So I have question - how about UK? As I know in UK there is no compulsory chart of accounts?
Does it mean that each company can use its own chart? For example one company records receivables in account 1100, but other in 7000? Doesn't it makes a confuse and mess?
Yes, I am thinking about bookkeeping in UK (because such question). Reasonably standard....I know, for example, accounts payables, receivables, bank, cash, etc. are almost the same. But if tax authorities examine companies accounts there may be some confuse for tax authorities if in one company, for example, in account 6000 are recorded sales, in other company in 6000 are recorded expenses, but in third company in 6000 are recorded capital assets. I have no knowledges about UK accounting, because that such (stupid) questions. In Latvia almost all companies in group 1000-2000 record assets, in 3000-5000 liabilities, 6000 - income, 7000-expenses. So tax authorities know, if number of account starts wit 7xxxx, then these can be only expenses and nothing else.
I was thinking about this too. Being new to accounting software, i really only have knowledge of Sage Line 50 albeit quite a good understanding of the program. I was wondering if other software was easy to move over to as far as the chart of accounts goes? are nominal codes pretty much the same across the vaious accounting software? I have got hold of some VT stuff and Quickbooks, i think they are demos or not really to be used in business but haven't had chance to play yet.
I hope someone corrects me on this but I think even using the same Sage version, different firms might use quite different nominal codes for the same thing. Mine uses 2 digit alpha-numeric codes. First digit indicates Asset, Expense, Income, Liability etc:-
S = Sales O = Overheads etc. The second digit breaks it down further into type -- OA Advertising OV Work Clothing. The main thing is that the vast majority are the same for all clients, so you'd soon pick it up wherever you worked. I think VT is just as flexible but not sure about Quickbooks.
Some software, (particularly non-UK) have some rather "interesting" charts of accounts, but generally, they can be altered. (Personally, I'd avoid software that didn't allow for some customisation - particularly if the client is doing some/all of the bookkeeping, otherwise, you might end up with clients posting everything to "Misc")
Sage themselves provide a number of template chart of accounts to choose from, depending on whether the "entity" is a sole trader or a company etc... and what trade they are engaged in. Makes sense, really - you wouldn't want a code for share capital for a sole-trade etc... (although many of the codes are the same or similar).
To Neil - in the UK, the final accounts don't show the account codes, so it doesn't actually matter what the nominal code was... also, not every company uses computerised software - in that instance, there wouldn't be any codes at all anyway :) With the introduction of iXBRL, the accounts are tagged in a standard way regardless of what software/chart of accounts might have been used to produce the accounts.
One issue for accountants & bookkeepers might be where they support various packages (and various charts of accounts) and import the data into accounts production software: different chart of accounts would require different mappings setting up.
-- Edited by Figurate on Wednesday 4th of January 2012 02:28:40 PM
Sage themselves provide a number of template chart of accounts to choose from, depending on whether the "entity" is a sole trader or a company etc... and what trade they are engaged in. Makes sense, really - you wouldn't want a code for share capital for a sole-trade etc... (although many of the codes are the same or similar).
Heh my secret identity remains intact. Who is the man in the tin?
Thank you for your replies Tim and Louise. I didn't think it would be hard to pick up new nominal code layouts or formats in various other software. Was just wondering if the software companies used something across the board but it looks like nope is the answer. Everyday is a school day.
-- Edited by Spamkebab on Wednesday 4th of January 2012 02:37:05 PM
