Introducing the new Chart of Accounts experience in QuickBooks Online
You asked, and Intuit® listened! A new Chart of Accounts experience is rolling out in QuickBooks® Online. The new experience is designed to help your clients correctly categorize transactions, and provide guardrails to help eliminate clutter and errors from being created in their account.
Accounting professionals and their clients will love this new feature because it reduces the guesswork faced when recording transactions in the Banking Center and Transactions screens in QuickBooks Online. Let’s dig into the details so you can see exactly how this new feature will impact you and your clients.
How will the new Chart of Accounts experience help accountants and their clients?
The new Chart of Accounts experience improves the user experience in a few ways. This new feature was designed with the client in mind. Benefits to help them succeed include the following:
- A standardized chart of accounts that is applied to a new QuickBooks Online company based on the industry and tax entity type selected in the new company setup wizard. This eliminates the guesswork when setting up and structuring the chart of accounts.
- Client users are only able to add a sub-account to the existing pre-defined parent accounts, and will not be able to create new parent accounts unless adding a new bank or credit card account. Note that accountant users will still be able to add parent accounts. This keeps the chart of accounts nice and tidy, while providing the ability to track granular details that clients need to manage their business. The client-created sub accounts can be collapsed into the parent accounts on reports, giving the accountant tidy financials!
- The category types use words that are familiar to non-accountants. This makes it easier for them to select the appropriate category for each transaction.
- Accounts are suggested when a client records a new transaction in the Transactions tab. These suggestions are based on feedback from accountants and categorizations used by other QuickBooks users for the same vendor name.
These user-facing features will drastically improve the reliability of the accounting data and reduce the amount of cleanup that must be done at the end of the accounting period. The good news for you is that you will have the same experience you are used to having, which will provide the flexibility to structure the chart of accounts the way you prefer. You can add parent accounts, turn on account numbers, and import a chart of accounts.
How does it work?
As previously mentioned, the new Chart of Accounts experience will be rolled out to a small subset of new users when they create a new QuickBooks Online account.
During the setup process, clients will be prompted to select what their business does and what tax form they file. The predefined chart of accounts will populate automatically when the wizard is completed. Client users can add new bank and credit card accounts via the Dashboard, or when they first access the Transactions tab (Banking Center). These are the only accounts that will be added as parent accounts to the chart of accounts.
You’ll see the new Chart of Accounts experience in action when you start recording transactions. When a transaction is selected, the client will be prompted to select a category. Commonly used categories will be displayed at the top of the drop-down along with a link to See and add more categories. You can also search for categories by name by typing characters into the search box.
If a user selects to See and add more categories, a drawer will slide out from the right side of the screen and will list all the categories available to choose from.
If an appropriate category can’t be found, you can select + New at the top right of the drawer to create a new one. Keep in mind that you can only add a new sub account to an existing parent category.
When will these changes be available?
The new Chart of Accounts experience will be rolled out to a limited number of new users starting in Feb. 2021, and will not be retroactively applied to any existing QuickBooks accounts. Clients who set up QuickBooks Online accounts themselves, and identify their business as a sole proprietor AND a service-based business may see the new experience; accountant users who create a new company for their clients via QuickBooks Online Accountant will not.
Other entity types and industries will be added over time, and will include predefined account structures that align with their selected industry and entity type.
Planned industries include:
- Real estate/property management
- Law firms
- Restaurants/food service
- Personal service (appointment-based businesses)
Planned entity types include:
- Sole proprietorship (Schedule C filers)
- Partnerships (1065)
- C-Corporations (1120)
- S-Corporations (1120-S)
- Not-for-profits (990)
As an accountant who has worked with Intuit as a small business advisor, I am excited to see these changes to the chart of accounts rollout! This feature has been thoughtfully designed and created to help relieve the anxiety clients experience when categorizing transactions, as well as help reduce the amount of reclassification work their accountant partners must do at period end.
As always, please provide your feedback on this new feature to the Intuit team so they can continue to “deliver awesome” to our firms and our clients!
Frequently Asked Questions
When can I expect to see the new Chart of Accounts experience in my clients’ companies?
The new experience is being rolled out to a small subset of new QuickBooks Online users beginning in Feb., 2021. Stay tuned for more information about the full rollout of this feature.
Will accountant users still be able to add parent accounts and structure the Chart of Accounts they way they like?
Yes, accountant users will be able to create new parent accounts of all types. Once a new parent is added by an accountant user, the client will be able to add sub-accounts.
Will I still be able to enable account numbers in the new Chart of Accounts experience?
Absolutely, clients and accountants will be able to enable account numbers in the chart of accounts. Learn more about enabling account numbers
If I don’t like the new experience, can I disable it?
Keep in mind that the new experience will only be rolled out to new QuickBooks Online users and is only seen by non-accountant users. The accountant user experience is not affected unless they indicate that they are the company owner, rather than the accountant.
Which accounts count toward the limit of 250 accounts for QuickBooks Online Simple Start, Essentials, and Plus users?
Any account or sub-account created by the user counts toward the user limit.