Updating the chart of accounts

What is a Chart of Accounts?

Fundamentally, a Chart of Accounts is just a list (“chart”) of all the different financial labels (“accounts”) that your business uses. You will use these accounts to track the money your business receives, spends, or stores by recording transactions. Think of the chart of accounts as your financial filing system. If you want to measure or categorize something, it needs to be in your chart of accounts. Each account in the chart of accounts is assigned a type. There are five core types of accounts:

Revenues: Where your business earns money (rents, tenant fees, etc.)
Expenses: Where you spend money operating the business (cleaning, property management fees, etc.)
Assets: Things you own, like bank accounts or properties
Liabilities: Things you owe, like mortgages and credit cards
Equity: Money that you’ve put into the business or business earnings that you’ve reinvested

REI Hub allows you to expand your chart of accounts as you deem appropriate. Accounts of any type can be broken down into sub-accounts. Sub-accounts can help you view the information in deeper detail while ensuring that all transactions funnel up to desired top-level accounts, like those required by tax forms.

Some important things to know:

To ensure the Schedule E report works correctly, create new Revenue and Expense accounts as sub-accounts beneath the existing default accounts.
New expense or revenue accounts (and therefore transactions booked to them) that are not created under the default accounts will not appear on the Schedule E report. They WILL appear on all of the Net Income reports.
Adding a mortgage account automatically adds an escrow account as an asset account in addition to the main mortgage liability account.
The default accounts cannot be renamed or deleted.

To update the Chart of Accounts in REI Hub:

1) Navigate to the Chart of Accounts page.

Click the three horizontal bars in the upper right to reveal the right-side menu, and select Chart of Accounts.

2) Click +Add Account.

3) Give your new account a name and select an account type.

Most often, you will be adding an expense or revenue account so that you can track your funds in more detail.
If you want to add a bank or credit card account, we suggest you do so through the Banking page.
If you want to add a mortgage or loan account, we suggest using the Loans page.

4) If you want your new account to be a sub-account, select a Parent Account to nest it under.

Sub-accounts will display differently on the Net Income and Schedule E reports. The Net Income reports show the lowest account a transaction is booked to, while the Schedule E only displays the totals in each top-level account.
As noted above, if you want your Schedule E report to work correctly, create new revenue and expense accounts as sub-accounts beneath existing system defaults. New expense or revenue accounts (and therefore transactions booked to them) that are NOT created under the default accounts will not appear on the Schedule E report. They WILL appear on any of the Net Income reports.
Leave the Parent Account field blank if you do not want to create a sub-account.

5) Click Save Account and view it on the Chart of Accounts page.

Click the edit button to change your new account's name, or click the red trash can to delete it.