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CHART OF ACCOUNTS & ANNUAL BUDGET
Version 2024.02
Setting up your accounts and budget is done within two worksheets. Starting with the Account Groups worksheet, you can think of these as your “big buckets”. Most small non-profits will only have a handful of these. You’ll need at least one revenue group and one expense group, but more are recommended.
First, enter unique group numbers. These are usually in the hundreds or thousands. Whichever you choose, be consistent (all hundreds or all thousands). Also keep in mind that your reports will use the numbers for sorting purposes, with the lowest number listed first in many reports. Enter your group names. Then, classify each as either a Revenue or Expense group using the dropdown menus in the Type column.
Next, go to your Accounts/Budget worksheet. These are your smaller buckets, and they will “roll up” into the account groups you already setup. Here you would also need a minimum of two (one revenue, one expense), but more are recommended.
Note: if you are struggling to understand how Account Groups and Accounts are related, look at the A: Budget and the A: Budget Summary reports within the provided template with sample data.
Using similar numbering as used for account groups, assign unique account numbers. The first number in the account number (or first two if using thousands) should match the first number of the account group it will roll up to. The account numbers will also affect how things are sorted in your reports.
Enter the names of your accounts.
Associate your accounts to your account groups using the dropdown in the Account Group column. This will only allow you to choose account groups entered in your Account Groups sheet. You can click the dropdown icon within the field or type the code or name and select the account group.
Cells highlighted in light yellow are populated via formulas. These cells should not be altered. As you populate your Account Group column, the Type column will auto populate based on the classification entered in the Account Groups sheet utilizing a hidden formula.
If you’ve never setup a chart of accounts, use the template with sample data to get an idea. Search the web for a sample chart of accounts for your type of organization. You may find yourself jumping back and forth between the Accounts and Account Groups worksheets during setup, which is fine.
This can be a time-consuming activity if setting up a chart of accounts for the first time. You may need to involve others at your organization to determine how you want revenue and expenses grouped. There is no right or wrong answer. Whatever makes sense for you and will help you track your finances and make informed decisions.
While you could change your chart of accounts mid-year, it’s not easy to do (see Troubleshooting & Tips for more info). Changing the numbering or names after you have started entering transactions in your journal will require some cleanup of your journal to get reports to display correctly. It’s recommended that you do the best you can, then wait to make changes to your chart of accounts until next year based on your experience.
Finally, you need to enter your annual budget for each account. Enter positive numbers for revenue accounts. Negative numbers for expense accounts. If you enter a negative number for a revenue account, or positive number for an expense account, the value entered will be highlighted in bright red (critical warning).
If you’re wondering why the negative numbers have parenthesis around them, that’s just the fancy way accountants notate a negative value. Just enter your negative values with a negative symbol, and it will change to the parenthesis format.
Once done, you may want to re-sort your accounts table based on Account Number in column B, lowest to highest, but it’s up to you.
Note: when sorting, filtering, hiding, formatting, or re-sizing columns or rows, you will often see a "Heads up" pop-up warning. This is because there are "protected" cells containing formulas hidden on the sheet. You can ignore this warning (click "OK") when sorting, filtering, hiding, formatting, or re-sizing columns or rows. But, if you are doing anything else (deleting or editing data) and you see this pop-up, you should probably click "Cancel" or be prepared to click "Undo" if anything isn't working properly after clicking OK.
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