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Setting Up Your Chart of Accounts

Jay White

Last updated on Aug 28, 2025

Focal already automates most manual accounting processes. However, it is crucial to maintain a well-organized chart of accounts (COA) for precise financial reporting, tax compliance, and informed decision-making. This is why you can manually manage entries, enabling you to meticulously monitor every financial transaction to guarantee the completeness and reliability of your financial records.

This guide walks you through setting up your chart of accounts.

Procedure

Step 1: Access the Chart of Accounts

Log in to Focal and navigate to Accounting > Chart of Accounts to open the COA dashboard.

Step 2: Understand the Account Categories

Focal Software provides a default set of account categories such as:

  • Assets: Tracks what the business owns, including cash, inventory, and property.

  • Liabilities and Credit Cards: Monitors what the business owes, like loans and credit balances.

  • Owner’s Equity: Reflects your interest in the business after liabilities are subtracted from assets.

  • Income: Records your business’s earnings from sales, services, and other revenue sources.

  • Expenses: Captures the costs incurred by the business to generate income, such as rent and payroll.

Review these categories to understand how they fit your business model.

Step 3: Customize Account Types

Navigate to Accounting > Journal Entry. Find an account by filtering/searching and click Actions > Edit to update its details.

Click on Add Account/Ledger to create accounts specific to your business e.g., "Shipping Costs", "Payment Gateway Fees", etc.

If certain default accounts are irrelevant, select them and click Delete.

Step 4: Review and Test

  • Review your COA structure, and check for accuracy and completeness.

  • Enter a few sample transactions to ensure accounts are functioning as expected.

Tips

  • Periodically review and update your Chart of Accounts (COA) to reflect changes in your business operations as necessary.

  • Avoid creating too many accounts; keep it simple to avoid confusion.

  • Make it a habit to regularly export your COA and other financial data to prevent data loss.