Chart of Accounts

The Chart of Accounts is a mechanism that is used to classify Ledger Accounts into a multi-level hierarchy for reporting purposes. Typically the Chart of Accounts is is set up with a top level of Assets, Liabilities and Equity, with the next level used to split these as used in the Balance Sheet Accounts heirarchy.

Behind the scenes, the Chart of Accounts is a set of named nodes that are each linked to one or more nodes in a hierarchy. Each Ledger Account is associated with just one node in a chart of accounts.

Multiple charts of accounts can be created by linking another set of nodes. Each Financial Entity can have its accounts linked to a different Chart of Accounts, but normally all would link to the same Chart of Accounts.

In order to display a chart of accounts hierarchy, a recursive database view using a Common Table Expression is available. This view presents the nodes in a hierarchy with numbered levels from 1 (the top level) to n. For most businesses, the number of levels is 3, although there is no upper limit.

It is possible to re-link Ledger Accounts to new nodes or to completely different chart of accounts without impacting data in the General Ledger.