Chart of accounts

The chart of accounts is an organized list of all the categories into which a business categorizes its transactions: what it owns, what it owes, owners’ equity, its sales, and its expenses. Each category is assigned a number. When well-structured, it makes your financial reports clear and easy to read.

At a glance

Five main categories: what you own (assets), what you owe (liabilities), the owners’ equity, your sales (revenue), and your expenses (expenses)
Each account has a number, so you can always file it in the same place
It’s tailored to your industry: construction, E-commerce, services
In Canada, there is no legally mandated chart of accounts; you can set it up according to your needs

Why it matters

Your chart of accounts is like organizing your garage: if every tool has its own designated spot, you can find everything at a glance; if everything is in disarray, you waste a lot of time and lose track of what you have. Each drawer is labelled with a number, often in ranges: the 1000s for assets, the 2000s for liabilities, the 4000s for sales, and the 5000s for expenses, which ensures you always put things back in the same place. It determines the quality of everything that follows: financial reports, tax returns, and dashboards. Too many accounts and data entry becomes a headache; not enough, and you lose track of which activities are actually profitable. A construction contractor doesn’t have the same needs as an online store. It’s this plan that structures your general ledger and each journal entry, including tracking your Accounts Receivable and Accounts Payable. No specific format is mandated in Canada, but the CRA requires accounting records clear and well-documented. To build a clear chart of accounts from the start, Bankeo connects you, for free, with a vetted accountant or CPA who knows your industry, and we’re here to support you every step of the way.

Frequently asked questions

What exactly is a chart of accounts, in simple terms?

It’s a list of all the categories into which you classify the money coming in and going out of your business. It’s a bit like the folders in a file cabinet: one for sales, one for rent, one for salaries, and so on. Each category is assigned a number so that everything is always organized the same way, month after month.

Is there a mandatory chart of accounts in Canada?

No. Unlike France, which mandates a general chart of accounts with official numbering, Canada does not require any specific structure. Accounting standards govern the presentation of financial reports, but each business organizes its accounts as it sees fit. This is a valuable freedom: your chart of accounts can reflect your actual business activities rather than a prescribed model.

Who can help me create a suitable chart of accounts?

An accountant who understands your industry will set up a chart of accounts tailored to your business decisions, tax obligations, and financial reports, whether you’re starting from scratch or overhauling your accounting system. Bankeo connects you with a vetted accountant or CPA for your business at no cost, and we’ll stay by your side for as long as you need us.