You can clean up your COA by deleting inactive accounts and accounts that have not been used in a while. It is a good idea to refresh your COA every three months.
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Do you know that if you delete chart of account you will lose all the data from your account?
Yes, if you delete Chart of Accounts from your QuickBooks Online account then you lose all the data of your account. As the Chart of Accounts is the core of QuickBooks software. It has all the details of all the accounts. Here you get to know about the Chart of Accounts and also how you can delete the Chart of Account in QuickBooks Online.
About Chart of Accounts in QuickBooks Software
In QuickBooks, the name Chart of Accounts itself defines its working and nature. It have all the accounts in it that are used into your QuickBooks account. It has a list of the account with their information like transactions, account balances, things happening in it, etc. You can also use the chart of accounts to categorize the transactions such as taxes, sales, reports, etc.
Why Chart of Accounts is Important?
The Chart of Accounts is important because it is the core of QuickBooks that have all the accounts stored in it with all the information. You want to know about money in each account or report of account, or transactions done, etc. If you want to know anything related to any account then you can open up the Chart of Accounts. It has all the details that you want to know about each account.
What Happens When You Delete Chart of Accounts from Your QuickBooks Online account?
First of all, to delete Chart of Accounts from your QuickBooks online account; you have to delete all the accounts one by one. This way your Chart of Accounts got deleted and it has no information saved in it. It means you are now not able to check any details related to any account that you have previously into your QuickBooks account. Your QuickBooks account is of no use now as it don’t have any reports to make, any transactions to see, or any tax forms to fill.
To delete the chart of account you have to make all the accounts inactive. The steps to inactive or delete Chart of Accounts are as follows:-
- In QuickBooks Online software.
- Click on the Gear icon that is settings icon.
- Select the Chart of Accounts.
- It opens up the Chart of Accounts window.
- In this you have to delete all the accounts one by one by following the steps below:-
- Choose any one account or all accounts
- Then click on the Action drop-down button
- From drop-down options, choose the Make inactive option
- This makes the accounts inactive that works as deleted accounts.
Now, you are not able to see any account in Chart of Accounts.
To Check the Inactive Accounts Follow the Steps:-
- Go to the Settings that is Gear icon in QuickBooks Online account.
- Select Chart of Accounts option.
- Further, you have to find the account that you make inactive that is the whole chart of accounts list.
- Now, select the option Include inactive that is tick mark the checkbox.
- It shows you all the accounts as you delete the whole list to delete chart of accounts.
How Many Types of Accounts are there in Chart of Accounts in QuickBooks Online?
As you get to know that chart of accounts have many accounts listed in it. So it is categorized according to their types like income, expense, liability, etc. Here, you get to know all the categories that are available in Chart of Accounts in QuickBooks. These category types are as follows:-
- Liabilities: This category is related to the money or things that you have purchased but have not paid the amount yet. In other words, you owe the things or money from vendor or someone.
- Assets: This category has all the things that you buy for your business like vehicles, building, equipment, and many other things.
- Expenses: When you spend money on the operations or things related to your business counted in the Expense category. These things are like supplies, rent, utilities, etc.
- Income: It is related to all the money that you get into your business account on the regular basis such as revenue, sales income and many others.
You get all the types with their descriptions so that you can identify which account is belong to which category. The account are required to transfer so it is not going to affect the financial reports or balance sheet that you make into your QuickBooks account.
Which of these Accounts can be Deleted from the Chart of Accounts?
The decision to delete an account from the chart of accounts depends on the specific needs and circumstances of your business. However, I can provide some general guidance on each of the accounts you’ve listed:
- Retained Earnings: Retained Earnings is a crucial account that tracks the accumulated profits or losses of a business over time. This account should not be deleted because it reflects the financial history and performance of the company.
- Bank Charges: Bank Charges is an account used to record fees and charges imposed by your bank for various services, such as overdraft fees or wire transfer fees. It’s typically a valid account to keep, as it helps in tracking expenses related to banking activities.
- Opening Balance Equity: Opening Balance Equity is often a temporary account used to balance the books when you first set up your accounting system. Once the initial setup is complete, you should ideally zero out this account by adjusting it with other accounts, rather than deleting it. It might not be a permanent account, but it serves a purpose during the initial setup.
- Uncategorized Asset: An “Uncategorized Asset” account is not a standard account in accounting. It may have been created as a placeholder or mistake. If you no longer need this account and it’s not associated with any specific asset, you can consider deleting it or renaming it to better reflect its purpose.
Remember that any changes to your Chart of Accounts should be made carefully and may have implications for financial reporting, so it’s advisable to consult with a professional accountant or bookkeeper before deleting or making significant changes to your accounts. Additionally, the specific requirements for your chart of accounts may vary depending on your industry and the accounting standards applicable to your business.
In above article, you get to know how to delete the Chart of Accounts in QuickBooks Online. It explains about chart of accounts, importance of chart of accounts in QuickBooks, and also the categories of account it has.
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+1-800-596-0806 or chat with experts.
Frequently Asked Questions
How to Check the Deleted Account in QuickBooks Online?
When the account is deleted then it becomes inactive. So in this case, you are not able to see that account. For that, you have to do the steps below:
- Go to the Accounting menu in QuickBooks Online.
- Then click on the Gear icon.
- Further, you have to tick mark the checkbox named include inactive.
- Then it refreshes the page and shows you the inactive accounts in the list of accounts.
How to Disconnect an Account from QuickBooks Online?
- In QuickBooks Online, go to the left side menu.
- Then click on the Banking menu option.
- Further select the Banking tab.
- You have to select the tile for the bank account.
- Click on the Pencil icon that means Edit option.
- Select Edit account info.
- You see a checkbox named Disconnect this account on Save; so tick mark on the checkbox.
- In the end, click on Save and Close button.
What Accounts are Counted in Income and Expense accounts in Chart of Accounts of QuickBooks Online?
- Other Income
- Other Expense
- Cost of Goods Sold
- Job Costs