Chart of Accounts for Small Business: A Simple Starter List
Your chart of accounts is the list of categories every transaction lands in. Get it right and your monthly profit & loss reads cleanly. Get it messy and every report needs a translator.
What a chart of accounts is
Five families: assets, liabilities, equity, income and expenses. Assets through equity build the balance sheet; income and expenses build the profit & loss.
A common numbering pattern
1000s assets, 2000s liabilities, 3000s equity, 4000s income, 5000s cost of goods sold, 6000s+ operating expenses. Leave gaps (1010, 1020) so new accounts fit later.
A simple starter list
Business checking; business savings; accounts receivable; business credit card; sales tax payable; owner contributions; owner draws; service income; product sales; cost of goods sold; advertising; bank and merchant fees; contract labor; insurance; software and subscriptions; rent; vehicle; utilities. Prune what you don't use.
Mistakes that make books messy
A catch-all 'miscellaneous' account; one account per app; recording owner draws as an expense; creating a new account for every one-off.
Fixing a messy chart
If categories have drifted for months, Books Clean-Up ($150 per month behind, $600 minimum, $1,800 cap) gets the books current, then a monthly plan keeps them that way.
How Linked-do-Books helps
100% remote, nationwide bookkeeping that's technology-assisted with human review and a plain-language monthly note. Lite is $199/month (up to 50 transactions and 1 bank or card account). Bookkeeping only — tax preparation and tax advice stay with a licensed tax professional.
Related reading
- Bookkeeping pricing
- Catch-Up Bookkeeping: Get Your Overdue Books Current
- The Small Business Bookkeeping Checklist (Free PDF)
- QuickBooks Online Bookkeeping for Small Businesses
- How to Reconcile a Bank Account
- Bookkeeping vs. Accounting: What's the Difference, and Which Do You Need?
- Bookkeeping vs. Tax Prep: Who Does What for Your Small Business
Questions? Call (406) 500-5242 · Linked-do-Books, 226 S Cruse Ave, Helena, MT 59601 · 100% remote, nationwide
Frequently asked questions
What is a chart of accounts?
It is the list of categories your bookkeeping uses to sort every transaction, grouped into assets, liabilities, equity, income and expenses.
How many accounts should a small business have?
Many small businesses use a lean list and add an account only when seeing that line separately would help a decision.
How are accounts usually numbered?
A common pattern is 1000s for assets, 2000s liabilities, 3000s equity, 4000s income, 5000s cost of goods sold and 6000s and up for operating expenses.
Are owner draws an expense?
No. Owner draws are recorded in equity, not as a business expense.
Can Linked-do-Books clean up a messy chart of accounts?
Linked-do-Books offers Books Clean-Up at $150 per month behind, with a $600 minimum and a $1,800 cap, and monthly bookkeeping plans from $199 a month.