Chart of Accounts for Startups and SaaS Companies
Accounting is fundamental to starting a business. You need to have a basic understanding of accounting principles and essential bookkeeping. I had to learn it. There was no choice. For filing taxes, your CPA is going to ask you for an Income Statement (also known as P/L statement). If you're doing taxes by yourself, then the Income Statement serves as a crucial report for filing taxes.
There are many resources out there to get started with the Bookkeeping process, but I had to spend a lot of time organizing chart of accounts. You need to organize this upfront as it will be a huge mess to change later.
I searched for a high quality chart of accounts, but it was either A) Disorganized mess, B) Too broad with 500+ accounts for every possible business C) Organized but without Chart of Account numbers D) Meant for massive C-Corps. You won't be able to chatGPT out of it, trust me.
Account Numbers are a must. I am generally obsessed with naming things right, it has always served me well. When you're communicating to your CPA, you can refer to them precisely by numbers.
Here is mine, it's meant for a software based startup with a single-member LLC (passthrough tax entity). If you have more than one members in the LLC, just duplicate the "Owner's" accounts for each member; rename "Owner" to "Member". If it is an S-Corp, change "Owner" to "Shareholders". There are a few differences in terminology (e.g. Distributions vs. Draw), but you'll figure that out later. Accounts can be renamed at any time, just make sure the structure and type of account is correct. I use it for Quickbooks Desktop (not sold anymore), but there is no reason why it can't be used in any accounting software.
| Account # | Account Description | Type | |
|---|---|---|---|
| 1010 | Stripe Account | Bank | |
| 1020 | Checking Account #1 | Bank | |
| 1030 | Checking Account #2 | Bank | |
| 1040 | Savings Account #1 | Bank | |
| 1100 | Clearing Account | Bank | |
| 1200 | Inventory Asset | Other Current Asset | |
| 1410 | Brokerage Account #1 | Other Current Asset | |
| 1411 | Cash | Other Current Asset | |
| 1412 | Investments | Other Current Asset | |
| 1413 | Unrealized Gains and Losses | Other Current Asset | |
| 1490 | ACH and Wire Clearing | Other Current Asset | |
| 1500 | Computers and Equipment | Fixed Asset | |
| 1510 | Computers | Fixed Asset | |
| 1520 | Computers Acc Depreciation | Fixed Asset | |
| 1600 | Furniture and Fixtures | Fixed Asset | |
| 1610 | Furniture | Fixed Asset | |
| 1620 | Furniture Acc Depreciation | Fixed Asset | |
| 2000 | Accounts Payable | Accounts Payable | |
| 2100 | Credit Card #1 | Credit Card | |
| 2600 | Due to Owner | Short Term Liability | |
| 2610 | Expense Reimbursement | Short Term Liability | |
| 3000 | Opening Balance Equity | Equity | |
| 3100 | Owner's Capital | Equity | |
| 3110 | Owner's Investments | Equity | |
| 3120 | Owner's Asset Contributions | Equity | |
| 3200 | Members Equity | Equity | |
| 3300 | Owner's Distributions | Equity | |
| 3310 | Owner's Withdrawals | Equity | |
| 3320 | Personal Expenses | Equity | |
| 3400 | Unrealized Gains and Losses | Equity | |
| 4000 | Revenue | Income | |
| 4010 | Non-Recurring Sales | Income | |
| 4020 | Subscription Sales | Income | |
| 4030 | Refunds and Allowances | Income | |
| 5000 | Cost of Goods Sold | Cost of Goods Sold | |
| 5500 | Payment Processing | Expense | |
| 5510 | Transaction Fees | Expense | |
| 5520 | Transaction Fee Allowances | Expense | |
| 5530 | Payment Services | Expense | |
| 6000 | Hosting and Cloud Computing | Expense | |
| 6010 | Datacenter Colocation | Expense | |
| 6020 | Cloud Services | Expense | |
| 6030 | Website and Domains | Expense | |
| 6100 | Software and Subscriptions | Expense | |
| 6110 | Software Applications | Expense | |
| 6120 | Software Subscriptions | Expense | |
| 6130 | Memberships | Expense | |
| 6200 | Office Supplies and Equipment | Expense | |
| 6210 | Stationery | Expense | |
| 6220 | Beverages and Canteen | Expense | |
| 6230 | Shipping and Postage | Expense | |
| 6240 | Office Electronics | Expense | |
| 6250 | Small Office Equipment | Expense | |
| 6300 | Education and Training | Expense | |
| 6310 | Books | Expense | |
| 6320 | Media Subscriptions | Expense | |
| 6330 | Courses and Seminars | Expense | |
| 6400 | Utilities | Expense | |
| 6410 | Internet Service | Expense | |
| 6420 | Telephone | Expense | |
| 6430 | Mechanical and Electrical | Expense | |
| 6500 | Maintenance and Repair | Expense | |
| 6510 | Appliance Maintenance | Expense | |
| 6600 | Meals | Expense | |
| 6610 | Meals with Clients | Expense | |
| 6700 | Travel | Expense | |
| 6710 | Transportation | Expense | |
| 6720 | Lodging | Expense | |
| 6800 | Automobile | Expense | |
| 6810 | Mileage Reimbursement | Expense | |
| 6820 | Repairs and Maintenance | Expense | |
| 6900 | Legal and Professional | Expense | |
| 6910 | Taxes and Accounting | Expense | |
| 6920 | LLC Operations and Management | Expense | |
| 7000 | Advertising and Marketing | Expense | |
| 7010 | Social Media Campaigns | Expense | |
| 7020 | Website Advertisement | Expense | |
| 7030 | Search Advertisement | Expense | |
| 7200 | Research and Development | Expense | |
| 7210 | Materials and Supplies | Expense | |
| 7600 | Bank Service Charges | Expense | |
| 7610 | Credit Card Allowances | Expense | |
| 7620 | Bank Fees | Expense | |
| 7700 | State Taxes | Expense | |
| 7800 | Depreciation | Expense | |
| 7810 | Furniture Depreciation | Expense | |
| 7820 | Computer Depreciation | Expense | |
| 7900 | Rent and Lease | Expense | |
| 7910 | Office Rent | Expense | |
| 8000 | Non-Operating Income | Other Income | |
| 8010 | Interest Income | Other Income | |
| 8020 | Dividend Income | Other Income | |
| 8030 | Other Non-Operating Income | Other Income | |
| 9000 | Ask My Accountant | Other Expense | |
Feel free to use it in your company as long as following conditions are met:
In short: use it as you please for your company, no need to attribute me, don't sue me and don't sell this chart of accounts.
- Grant of License: The licensor hereby grants you a perpetual, worldwide, non-exclusive, no-charge, and royalty-free license to use the Chart of Accounts template for any purpose, including for commercial purposes and within a company for bookkeeping, subject to the conditions herein.
- No Warranty & No Liability: The Chart of Accounts template is provided "as is" without any warranties of any kind, either express or implied, including, but not limited to, the implied warranties of merchantability or fitness for a particular purpose.
- Restrictions: You are expressly prohibited from selling the Chart of Accounts template, or any derivative thereof, as a standalone product. Redistribution of the Chart of Accounts in its original or altered form is not permitted unless it's a part of a larger system or product where the Chart of Accounts is not the primary value.
Copyright 2023, Neil Panchal.