The chart of accounts is the list of every account an entry can go into. It decides how your reports are organized, so it is worth planning before you enter any transactions. A matter opens on its Accounts tab, where the Chart of Accounts lives.

Watch the walkthrough: Setting up the chart of accounts, 14 minutes. The video predates some changes to the app. Where they differ, follow this page.

Categories and specific accounts

An account can be a category or a specific item. Financial Assets is a category. Estate Checking and the decedent's checking account are specific accounts under it.

To nest an account, choose its Parent Account when you add or edit it, or drag it onto the middle of another account. You can nest as deep as you need. For example, Financial Assets, then Checking Accounts, then one bank account. Most matters need only two levels.

What decides the structure

Two things decide how to set up the chart.

What your court requires. Some courts require specific categories with specific names. Others do not care how assets are grouped.
How your firm wants its reports to read. Categories can make a report easier for beneficiaries to follow, even when the court does not ask for them.

Asset accounts

Add an account for every asset in the estate. That includes bank accounts, real estate, vehicles, and business interests. Add a category whenever a matter needs one, such as Business Interests for an estate with an active business.

Liability accounts

Add one account for each debt, such as the mortgage on the primary residence. Categories such as Secured Debts and Unsecured Debts are worth adding only when the decedent had many debts.

Equity accounts

Every matter starts with two equity accounts, and most matters need no others.

Opening Balance Equity is the other side of the first entry in each asset account. See Record opening balances.
Net Income (Loss) is a system account. It tracks what the estate has gained or lost, and you cannot edit, move, or delete it.

Equity is what the estate is worth. An estate with $100,000 in a checking account and no debts has $100,000 of equity. Add a $50,000 mortgage and the equity is $50,000. You do not need to understand equity in more depth than this to use the app well.

Income and expense accounts

Income and expense accounts report money coming in and going out as the estate moves forward. They are the categories on the account you file with the court.

Check that every category your court requires is present, and add any that are missing. In Wisconsin, for example, the income categories are Schedules A through E, starting with added property, dividends, and interest. The expense categories are Schedules F through K. You can add subaccounts for clarity even where the court does not require them, such as several kinds of administration expense.

Every entry has to go into an account. If no account fits, create one. Estate Bookkeeper will not let you leave the account blank, because an entry with no account is how books end up out of balance.

Save the structure as a template

The first time through, create every category you plan to use before you enter anything. Then click Save as Template above the Chart of Accounts.

Save as Template copies the matter's asset, income, and expense accounts. Templates do not hold liability or equity accounts. A template should hold your categories, not the accounts specific to one matter. Either save the template before you add specific accounts such as a named bank account, or remove them afterward in the template editor. See Use account templates.

How the chart shows up in reports

Reports follow the chart's structure and order. By default, a report lists only accounts that have a value. Turn on Show zero value accounts to list every account in the chart.

Most firms leave it off. An estate checking account did not exist on the date of death, so it has no place on an inventory as of that date. Some courts and firms want every account shown, and the option is there for them.

Plan your chart of accounts