You will need the Accounting Settings permission to add or edit accounts in your chart of accounts.

Your chart of accounts is the master list of every account One Church Software uses to track your finances. Each account holds one kind of financial activity - the cash in a bank account, the money you owe, the offerings you receive, or the bills you pay.

One Church uses double-entry accounting, so every transaction moves money between at least two accounts. The type you give each account tells the system how it behaves and where it appears on your reports. Choosing the right type is the most important decision you make when adding an account.

The five account types

Every account belongs to one of five types. Asset, Liability, and Equity accounts describe what your organization owns, owes, and is worth (your balance sheet). Income and Expense accounts describe money coming in and going out (your income statement).

Asset - something your organization owns or money owed to you. Examples: checking and savings accounts, accounts receivable, buildings, and equipment. Assets appear on the balance sheet and increase with a debit.
Liability - money your organization owes to someone else. Examples: accounts payable, payroll taxes withheld, credit cards, and loans. Liabilities appear on the balance sheet and increase with a credit.
Equity / Fund Balances - the accumulated value held in each of your funds (assets minus liabilities). One Church creates an equity account automatically for every fund you add, so you normally won't add these by hand.
Income - money coming in from your activities. Examples: tithes and offerings, event registrations, and other donations. Income appears on the income statement and increases with a credit.
Expense - money going out to run your organization. Examples: salaries, utilities, ministry supplies, and missions support. Expenses appear on the income statement and increase with a debit.

Only Asset and Liability accounts can be set up as a register account (used to enter deposits and payments) or as a receivable. See How do I set an account as a register account?

Tip: Not sure how a debit or credit affects a given type? When entering a journal entry, click the show cheatsheet link to see how debits and credits move each account type. See How do I add a journal entry?

Income accounts vs. funds

This is the distinction that trips most people up. An income account describes what kind of money you received - for example, tithes, missions giving, or event income. A fund describes what the money is for - a ministry, campaign, building project, or restricted gift. They answer two different questions, and most transactions use both at the same time.

For example, a $100 gift to your building campaign is recorded as income (the kind of money) into the Building Fund (the purpose it belongs to). One income account can receive money for many funds, and a single fund can hold many kinds of income. That is why you add a fund - not an income account - when you want to track a new ministry or project separately.

Funds are managed separately from the chart of accounts. To learn more, see How do I manage the list of funds in accounting? Note that accounting funds are different from the giving designations a donor sees on a tax statement - see How do I manage the giving funds?

Types of liabilities

A liability is any amount your organization owes. Liabilities are usually grouped by how soon they come due:

Current liabilities - amounts due within a year. Examples: accounts payable (bills you have received but not yet paid), payroll taxes withheld from staff paychecks, and credit card balances.
Long-term liabilities - amounts due beyond a year. Examples: a building mortgage or a vehicle loan.

These groupings are called categories, covered next.

Categories: grouping accounts within a type

Within each type, you can organize accounts into categories for cleaner reports. Assets might be split into Current Assets and Fixed Assets; liabilities into Current Liabilities and Long-Term Liabilities; equity into Restricted Net Assets and Unrestricted Net Assets. Categories control how accounts are subtotaled and ordered on your financial statements, letting you add reporting detail without adding more accounts than you need.

When should I add a new account?

Add a new account only when you need to track a genuinely new kind of asset, liability, income, or expense that no existing account covers - for example, opening a new bank account, taking on a loan, or beginning to track a new category of income or spending.

Before adding an account, ask:

Is this a new kind of money, or just a new purpose? If it is a purpose - a ministry, campus, or campaign - add a fund or use an accounting tag instead.
Could an accounting tag capture the detail? Tags let you report by department, ministry, or campus without multiplying your income and expense accounts. See How do I use accounting tags?
Are you trying to create an equity account? Add a fund instead - One Church creates the equity account for you.
Does a similar account already exist? Reusing it keeps your reports readable.

One Church orders accounts by number, and a consistent numbering scheme keeps related accounts together. A common convention is 1000s for assets, 2000s for liabilities, 3000s for equity and funds, 4000s for income, and 5000s for expenses.

Tip: When you only need to slice your reports by ministry, campus, or project, reach for funds or accounting tags before adding new accounts. A lean chart of accounts is easier to read and reconcile.