Master Accounts

Overview

 

The Master Accounts are the Master List of Accounts available for each Division. Not all Master Accounts need to be installed at Divisional level, but all Account List requirements must initially be set up at Master Accounts level.The Accounts List affects everything that happens in ActionStep Accounting, including how you record income and expenses and the format of your Profit & Loss reports.  All accounts must initially be set up as Master Accounts and can then be "Installed" at a divisional level. Therefore, in order to start adding accounts you must select Master Accounts from the Display drop down box.

To get the Accounts List go to Accounting > Accounts > Accounts List

 

Then select Master Accounts from the drop down box as in the screenshot below.

 

Account Types


Whenever you maintain your Master Accounts List, i.e. add or edit an account, you need to decide which account type it belongs to.

The Financial reporting will Group by Account Type - so it is very important that you group Account types as you want them ie: don't have different Account Types under the same Parent Account

Assets
The assets of a business are those things that belong to the business that have a positive financial value i.e. items that could be sold by the business in exchange for money. Examples of assets include land, buildings, vehicles, stock, equipment, rare gold coins, bank accounts with positive balances and money owed to the business by its debtors. Asset account numbers normally start with 1.
Liabilities
The liabilities of a business are those things that belong to the business but unlike assets, liabilities have a negative financial value i.e. everything you owe to other people. Examples of liabilities include unpaid bills, GST, unpaid wages, rusty motor vehicles, stock that has passed its use-by date, overdrawn bank accounts and money owed by the business to its creditors. Liability account numbers normally start with 2.
Equity
The equity of a business is defined as the value of the assets minus the value of the liabilities. In other words the equity is the financial value that would be left if all the assets were sold and the money from the sale was used to pay off all the liabilities. Another way of expressing this is to say that the equity is the amount of money that would be released if the business was to be wound up. Equity account numbers normally start with3.
Income
The income of a business is the sum of those things that increase the value of the assets without any corresponding increase in the liabilities or any new investment by the owners of the business. Examples include revenue from the sale of goods, equipment or services supplied, rent or interest received and capital gains. Income accounts normally start with 4.
Cost of Sales
Cost of Sales is the direct cost of selling goods or providing your service. It includes purchases, freight, commissions and subcontractor labour. Cost of Sales account numbers normally start with 5.
Expenses
The expenses of a business are those things that reduce the value of the assets without any corresponding reduction in the liabilities or any capital drawings by the owners. Examples include the cost of stock and raw materials, rent or interest paid, electricity bills, telephone, wages, taxes, dividends, depreciation and donations to charity.
Other Income
Other income can be described as Non Trading income. It includes income that's not really part of your everday business, such as interest income or one-off capital gains
Other Expenses
Other expenses are abnormal expenses that are not part of your everyday business such as lawsuit expenses or capital losses.


When creating an asset account choose the following Account Types:

Bank - if you're creating a new bank account.
Accounts Receivable - if you plan to use the account for tracking how much money customers owe you.
Asset - for anything that isn't a bank account but is a short-term asset, for e.g. Inventory.
Fixed Asset - for anything material that you can touch, feel and see, for e.g. Fixtures and Fittings.
Other Asset - for intangible assets, for e.g. Goodwill.


When creating liability account choose the following Account Types:

Accounts Payable - if you plan to use the account for tracking how much money you owe suppliers.
Current Liability - for any money you owe that's relatively short term, for e.g. GST Payable
Long Term Liability - for Hire Purchase accounts, Bank Loans and long-term Loans from Directors.
Credit Card - for your credit cards.
Other Liability - for anything else, for e.g. Shareholder's current accounts.

 

Add a Master Account

It is a good idea to work off a list of accounts with pre-allocated numbers.

Add a new account

Once you have selected to display the Master Accounts you can start adding accounts by clicking on the plus sign hyperlink that is located next to the parent account that you want to add the new account to. For example, you would cick on the plus sign next to the Assets Account Name to add a new asset account.

This will take you to the "Insert Account" form where you will need to complete the following fields

 

Field

Description

Header Account?

Tick if this account is to be a header/parent account, i.e. it will appear in bold with other accounts listed below it. If you want it to be an account that you add transactions to then don't tick this box.

Active?

On Set up this would most likely be active. Un-tick this checkbox if you wish to delete/close an account as accounts cannot be deleted once transactions have been posted to them. 

Account Type

Method of grouping accounts for reporting and selection - refer to Account Types section above for further information. Please ensure that under a "parent" each type is the same.

Parent AccountDefines the Header Account the new account will be assigned to.

Account #

Number assigned to account. Look at the list of accounts already in the account group and decide where you'd like this new account to fit in. Accounts are sorted in numeric order.

Account Name

Name/Description of what Account is used for.

GST Code

Sales Tax Code

Please configure for your jurisdiction

Tax code assigned to an account to determine the treatment of sales tax on all transactions posted to this account , for e.g. N-T (Non-Taxable), S (Standard) etc. Most income and expense accounts should show as S (unless you sell tax-free supplies), although some expenses, such as bank charges and donations should have the Tax code set to N-T. Asset, liability and equity accounts almost always have N-T as the tax code (although Fixed Asset Purchases will have tax).

Note: this selection can be over-ridden at entry level when processing.

CashFlow Section

This links through to the Cash flow report - for further information see Fig 1.

Cash Natural Allocation Type

When configuring for use with Cash Basis Accounting. In the Accounting preferences, you may have set a "Natural Allocation" for applying payments - for example, when an invoice is part paid do you allocate to disbursements first - this field determines which of these allocations this code is attributed to.

Cash Natural Allocation Order

Where Natural Allocation is set and has more than one code attributed to it - which order does this sit in?

Note: If not populated, the system will pro-rata over the codes while adhering to the Natural Allocation set up in Administration > Accounting Preferences

Action Entries Only

This option allows you to specify if the account should be linked to actions (for profitability analysis). These flow through to the Exception report in Accounting.

Options are:

  • This account can have action or non-action related entries
  • YES: only post action related entries to this account
  • NO: never post action related entries to this account

Linked Income Account (Cost Codes Only - not shown)

This area allows you to choose which Income Account you would like your Cost to be attributed. This is used in some of the Action reporting areas.

Select Divisions

This enables you to pre-load the Accounts into the Accounts List for a division. Saving time when setting up the individual accounts list.



 

Click on the Submit button to save the account.

Delete or Edit a Master Account

 Ensure you have selected "Master Accounts" from the Display drop down box then select the account you wish to delete/edit by clicking on it.

An asterisk ( * ) located next to an account name denotes a System Account which is linked to certain system functions. These accounts may be edited but not be deleted.

 

This will take you to the Edit Account screen where you can click on the Delete button to delete the account. The delete button will only be available if there have not been any transactions posted to the account. If the delete button is not available then the only way to close the account is to untick the Active check box and click Submit to save your changes.

Accounts List Editing - Tips, Tricks and Challenges

  • When Editing the Master Account name it will not feed down into the divisions where the account is already selected. If editing the entire accounts list (ie: initial set up) it is best to deselect all the division accounts prior to editing - when editing the master account, reselecting the division will add it with the correct name.
  • Header accounts can not be deselected at division level - so if renaming those, deselect at master level and go back in to update.
  • The account ID (to the left of the list) is the system account ID against the transactions. Should you wish to manipulate the Accounts List after transactions have been entered, the Account number can be changed, the transactions will move with the Account ID to the new number.