You can find the Chart of Accounts under the Accounts tab. By default, some basic accounts are displayed, which the company can use in its accounting. You can view a more extensive Chart of Accounts through tabular editing, accessible from the button below when creating a new account. In tabular view, you can add or remove accounts from the list view, as well as edit the account name and default settings. It's important to remember that a small business only needs a fraction of the accounts in the Chart of Accounts, so don't be alarmed by the number.
You can customize the Chart of Accounts to fit your company's needs by editing existing accounts or adding new ones. Here's how you create a new account and select its settings:
- Create a new account from the 'New Account' section.
- Choose an account number that is not yet in use.
- Give the account a name that describes its purpose.
- Select the default VAT handling that will be used when recording transactions in the future (read more below).
- Choose the default VAT rate. The most common rates used in Finland are 24%, 14%, and 10%.
- Select the account type (see explanations of account types below).
You can also easily delete unnecessary accounts from the account settings.
VAT-handling #
The default VAT handling simplifies and speeds up the process of recording transactions in the future. When you set a default handling for an account, NOCFO can calculate the VAT correctly during transaction entry. However, it's always possible to change the handling for individual transactions in the transaction entry, even if a default handling is selected for the account.
No VAT handling:Select this if you do not want a separate VAT handling for the account. Domestic taxable purchases: Choose this when you purchase taxable goods or services in Finland. Domestic taxable sales: Choose this when you sell taxable goods or services in Finland. Zero-rated sales: Select this if you sell goods or services that are exempt from VAT, but you can still deduct the VAT on purchases. More information Sale of goods to EU countries: Choose this when you sell goods to another VAT-registered business in the EU. More information Sale of services to EU countries: Choose this when you sell services to another VAT-registered business in the EU. More information Purchase of goods from EU countries: Choose this when you purchase goods from another VAT-registered business in the EU. More information Purchase of services from EU countries: Choose this when you purchase services from another VAT-registered business in the EU, and reverse charge applies. More information Purchase of goods from outside the EU: Choose this when you import goods from outside the EU. More information Purchase of services from outside the EU: Choose this when you purchase services from outside the EU. More information Purchase of construction services: Choose this if the reverse charge applies when purchasing construction services. More information Sale of construction services: Choose this if the reverse charge applies when selling construction services. More information
Account type #
When creating a new account, you need to select an account type. There are several different account types, and they determine, for example, which accounts are displayed when using the Chart of Accounts filtering or which account values are taken into account on the Dashboard. However, don't be alarmed by the number, as small business owners typically only need a few of them when creating a new account. Below is a list of all possible account types that can be set for an account in NOCFO. As a general rule of thumb, when creating a new account, it's often a good idea to take a look at existing accounts and see what settings they already have.
The account types available for balance sheet accounts are:
Assets: Represents the company's assets. This account type can be selected for accounts numbered between 1000-2000. Depreciable Assets: Assets with a useful life of over 3 years or a purchase price over 1200€ Read more VAT Receivables: Accounts used to handle VAT receivables. Accrued Income: Account type for adjusting entries needed at the end of the accounting period. If expenses for future periods have been paid during the current accounting period, they are adjusted using accrued income at the end of the period. Accounts Receivable: Accounts used in accrual accounting. Goods or services are delivered to the customer before payment, meaning they are sold on credit. Bank Account / Cash: Account type for various bank accounts and cash funds, where money comes in or goes out. Liabilities: Can be selected for accounts falling within the range of 2000-2999. Liability accounts represent the sources of the company's funds. Equity: Accounts representing the company's equity. Retained Earnings: The company typically has only one account with this account type. This account reflects the company's retained earnings or losses from previous fiscal years. Accounts Payable: Accounts used in accrual accounting. These accounts are used for entries where goods or services have been received but payment is made at a later date. Debts: Accounts representing the company's debts, such as bank loans. Accrued Expenses: Account type for adjusting entries needed at the end of the accounting period. Accrued expenses are used to record received payments that have not yet generated revenue for the current fiscal year according to the accrual basis. VAT Payable: This account type is used for reconciling VAT receivables and VAT payables during the VAT period. Account 2939 is already set up for this purpose in the chart of accounts, so if you are unsure, it is not recommended to create another account with the VAT Payable account type.
Types of income statement accounts:
Revenue (Sales): Accounts that contribute to the company's revenue. Income: Accounts that are not categorized under Revenue but still contribute to the company's income. Tax-Free Income: Accounts with income that is tax-free for tax purposes. Expenses: Category for company expenses that can be fully deducted. This is the most common type for expense accounts. Depreciation: Type of accounts used for depreciation entries. Non-Deductible Expenses: Expenses that cannot be deducted for tax purposes. Semi-Deductible Expenses: Expenses where half of the amount can be deducted for tax Prepayments: Type of accounts for prepayment entries.