Bookkeeping Basics
Chart of Accounts QuickBooks Example: A Beginner’s Guide
This QuickBooks chart of accounts example shows a practical starting structure for a small service business and explains which details belong in accounts, subaccounts, projects, classes, and items.
This QuickBooks chart of accounts example shows a practical starting structure for a small service business and explains which details belong in accounts, subaccounts, projects, classes, and items.
The example is illustrative, not a universal template. Keep the categories that reflect your business, remove categories you will not use, and add required bank, card, loan, tax, or industry accounts only after confirming their purpose and account type. Document every change and test the resulting financial statements carefully.
How to read the example
The number ranges preserve financial statement order. QuickBooks does not require account numbers, but they can make a growing chart easier to maintain. The account type matters because it controls where the balance appears on reports.
The example assumes a small service company that performs projects, purchases job materials, uses subcontractors, invoices customers, carries one loan, and tracks ordinary overhead.
Sample QuickBooks chart of accounts
| Number | Account name | QuickBooks category | Purpose |
|---|---|---|---|
| 1010 | Operating checking | Bank | Primary operating cash account |
| 1020 | Payroll checking | Bank | Separate payroll cash account, if actually used |
| 1100 | Accounts receivable | Accounts receivable | Customer invoice control account |
| 1200 | Undeposited funds | Other current asset | Temporary holding for customer payments before deposit |
| 1250 | Prepaid expenses | Other current asset | Costs paid before the benefit period |
| 1500 | Equipment | Fixed asset | Qualifying equipment at cost |
| 1590 | Accumulated depreciation | Fixed asset or related contra category | Cumulative depreciation offset |
| 2000 | Accounts payable | Accounts payable | Unpaid vendor bills |
| 2100 | Business credit card | Credit card | Card issuer liability |
| 2200 | Payroll liabilities | Other current liability | Supported payroll-related obligations |
| 2250 | Sales tax payable | Other current liability | Collected or assessed sales tax obligation where applicable |
| 2300 | Current portion of note | Other current liability | Principal due in the current period |
| 2500 | Note payable | Long-term liability | Long-term principal |
| 3000 | Owner contributions | Equity | Owner capital added to the business |
| 3100 | Owner draws or distributions | Equity | Owner withdrawals tracked separately |
| 3900 | Retained earnings | Equity | Cumulative earnings account managed by the system or close process |
| 4000 | Service revenue | Income | Core service sales |
| 4100 | Installation revenue | Income | Installation work if separately reviewed |
| 4200 | Maintenance plan revenue | Income | Recurring maintenance revenue if material to reporting |
| 5000 | Job materials | Cost of goods sold | Materials consumed in customer work |
| 5100 | Subcontractor costs | Cost of goods sold | Subcontracted delivery cost |
| 5200 | Permits and direct fees | Cost of goods sold | Job-specific permits or direct charges |
| 6000 | Administrative payroll | Expense | Non-direct payroll costs |
| 6100 | Rent and occupancy | Expense | Office or facility occupancy costs |
| 6200 | Software subscriptions | Expense | Accounting and operating software |
| 6300 | Insurance | Expense | Business insurance costs |
| 6400 | Marketing | Expense | Advertising and marketing services |
| 6500 | Professional fees | Expense | Accounting, legal, and other professional services |
| 6600 | Vehicle expense | Expense | Non-direct vehicle operating costs under the business’s policy |
| 8000 | Interest income | Other income | Interest outside core operations |
| 8100 | Interest expense | Other expense | Borrowing cost separated from principal |
Customize the revenue section
Separate revenue when management routinely compares the streams and the transactions can be coded consistently. A repair company may benefit from Repair Revenue, Installation Revenue, and Maintenance Plan Revenue. A consulting firm may need only Consulting Revenue.
Do not create a revenue account for each customer. Use customer records and projects for that detail. Products and services can identify what was sold while the income account keeps the financial statement concise.
Separate direct costs from overhead
Direct costs are tied to delivering the service or job. Overhead supports the business generally. The distinction helps calculate gross profit, but it must reflect actual operations and remain consistent.
For the illustrative service company, job materials and subcontractors appear as direct costs. Office rent, administrative payroll, and general software remain overhead. If field labor is tracked as a direct cost, document which payroll roles belong there and map payroll consistently.
Use one account for each reconcilable balance
Create a separate ledger account for each real bank account, credit card, and loan. This allows the QuickBooks balance to reconcile with the matching statement. Combining several credit cards or loans in one account can make differences difficult to locate.
Accounts receivable and accounts payable are control accounts connected to customer and vendor detail. Avoid direct journal entries to those accounts unless the transaction and software workflow genuinely require them.
Subaccounts: useful examples
Subaccounts can provide detail without losing a parent subtotal. An expense parent called Vehicle expense might contain Fuel, Repairs, Tolls, and Registration. Professional fees might contain Accounting and Legal.
Create the children only when the detail will be reviewed. If vendor-level reporting answers the question, a single Professional fees account may be more reliable than several rarely used subaccounts.
What should not become an account
- Customers: use customer records.
- Individual jobs: use projects or jobs.
- Every product or service: use product and service items mapped to suitable accounts.
- Every vendor: use vendor records and vendor reports.
- Departments or locations: consider classes or locations when the subscription and reporting setup support them.
- Temporary uncertainty: investigate the transaction instead of creating “miscellaneous” variations.
How to enter the example in QuickBooks
Current Intuit guidance explains that the account type controls the financial statement and the detail type adds more specific classification. Create the list only after confirming the correct categories.
- Export the current chart and reconcile existing balance sheet accounts.
- Draft the proposed list with names, numbers, types, parents, and descriptions.
- Map every existing account to the proposed structure.
- Add or import accounts using current QuickBooks instructions.
- Handle opening balances through a separate, supported conversion process.
- Map products, services, recurring transactions, bank rules, and integrations.
- Run the balance sheet, profit and loss, and trial balance.
- Test representative sales, bills, loan payments, and transfers.
Opening balance example
Assume the business is converting to QuickBooks with an illustrative operating bank balance of $18,000, accounts receivable of $12,500, accounts payable of $7,300, and note principal of $20,000. Those amounts should come from a dated and reconciled conversion schedule.
Do not simply type the balances into account setup screens without understanding the offset. The conversion must also preserve customer invoices, vendor bills, loan details, equity, and the relationship to prior financial statements. A balanced entry can still be incomplete if the customer or vendor subledgers do not agree with their control accounts.
Example: customer payment before the bank deposit
Assume a customer pays an illustrative $1,500 invoice on Friday, but the combined bank deposit does not appear until Monday. The payment should reduce the customer’s receivable. A temporary account such as Undeposited Funds can hold the receipt until it is grouped into the real bank deposit.
When the deposit reaches the bank, the QuickBooks deposit should move the selected payments from the temporary account to operating checking. The bank account then agrees with the statement deposit, the customer invoice is closed, and Undeposited Funds returns to the amount still waiting to be deposited.
Posting the bank deposit directly to Service Revenue would record income again and leave the customer invoice open. This example shows why a chart of accounts must work together with the correct transaction forms.
Review the first month-end close
After the chart is active, inspect:
- Negative or opposite-sign balances.
- Uncategorized income or expense.
- Transactions posted directly to reconciliation control accounts.
- New duplicate accounts created during entry.
- Revenue or direct costs missing from project reports.
- Loan payments posted entirely to expense.
- Large balances in clearing or suspense accounts.
Update the coding guide and account mapping based on real exceptions. Avoid redesigning the full chart in response to one unusual transaction.
Downloadable-template mindset
A sample chart is useful as a checklist, not as an import-ready answer. Before importing, mark each row Keep, Modify, Add, or Omit. Add a business reason and responsible reviewer. This makes the final list intentional and creates a record for future changes.
For the design decisions behind the example, read best chart of accounts structure. For a platform-focused setup process, use how to set up the chart in QuickBooks.
Frequently asked questions
Can I copy this sample chart directly into QuickBooks?
Use it as a starting checklist, not a finished import. Remove irrelevant accounts, add the business’s real bank, card, loan, and revenue categories, confirm account types, and plan opening balances separately.
Does a small business need account numbers?
No, but numbers can preserve order and make the chart easier to maintain. Leave gaps between groups so new accounts can be added later.
Should job materials be an expense or cost of goods sold?
If the cost is directly tied to delivering work and the business uses gross profit reporting, a direct-cost category may be appropriate. Define the policy from the actual operations and apply it consistently.
Should each bank account have a separate QuickBooks account?
Yes, each real bank account should normally have a corresponding ledger account so it can be reconciled to its own statement.
How should a loan appear in the chart?
Use liability accounts for principal, separating current and long-term portions when appropriate, and use an expense account for interest. Reconcile principal to the lender schedule.
What is the biggest mistake when importing a sample chart?
The biggest mistake is importing categories without mapping existing transactions, subledgers, products, services, rules, and opening balances. The list may look organized while the reports become unreliable.
Turn this guide into action