Elements of building systems

Chart of accounts (chart of accounts) is the first indicator to judge the financial management of any company

The chart of accounts is the first step in the design of any financial system, regardless of its complexity or the way in which the system is applied.

The chart of accounts is the natural and final hermetic path to the financial effects of documents

In the case of working on an accounts program, it is necessary to make a chart of accounts, so that you can make a financial impact for documents that have a financial impact "daily entry work" and therefore the account must be located in the chart of accounts

In the case of working with a manual system "or Excel" on books, it is necessary to control the accounts "Control" that are financially affected by "making entries", otherwise a new account will be made with each "Transaction" movement.

The accounts tree is a statement or statement of all the accounts in the company and is called a tree of accounts because it is divided into main accounts and sub-accounts in the form of a tree and is considered the basic strength of the financial system and the accounts are divided into:

FinancialPosition accounts are accounts that have extended balances for multiple financial periods through which the company's assets and liabilities are determined on a specific date

Income statement accounts are the period accounts that end at the expiration of the specified period and through which the revenues and cost of revenue and expenses during a certain period of the company are determined

The accounting manual in any accounting system is a set of basic levels and sub-levels that must be available in any system that is built, which are as follows

First level

Assets - Liabilities - Equity - Expenses - Revenues

This level is the basic level that must be available in any chart of accounts

Second level

It is a level that consists of dividing each of the five basic items into sub-levels according to the Egyptian accounting standards in the sense of

Assets are divided into non-current assets & current assets

Liabilities are divided into non-current liabilities & current liabilities

Equity is divided into capital & reserves & retained earnings

Revenues are divided into company sales revenues & miscellaneous revenues

Expenses are divided into operational expenses & marketing expenses & administrative expenses

When building the chart of accounts, the following must be taken into account

Following a standard that can be referred to in the event of a dispute "Egyptian Accounting Standard No. 1 Presentation of Financial Statements"

Create a single tree for the entity to keep calculations not duplicated in different forms

Add the account in its proper place (do not add a result account in the budget accounts)

Adjust the sub-account with the higher account so you can collect the real numbers

Do not add non-expressive accounts

Not adding endless accounts

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