Chart Of Accounts

Nominal Ledger (or sometimes General Ledger) is the term given to the complete record of all the transactions which represent the Assets & Liabilities, Income and Expenditure for a business.

Each entry in a transaction has a Debit or Credit monetary value and an Account Code selected from a Chart of Accounts to identify how that entry affects the business – e.g. increases or decreases Assets & Liabilities on the Balance Sheet or generates Income or incurs Expenditure in the Profit & Loss Account.

The Chart of Accounts consists of a list of Account Codes to represent all the different Assets & Liabilities a business can have on its Balance Sheet and all the types of Income and Expenditure it can have in its Profit & Loss Account. 

Many of these will be the same for all businesses – e.g. bank accounts on the Balance Sheet or bank charges on the Profit & Loss account.

Prelude Cloud uses a four-character, two-part account code structure to create the chart of accounts. This is pre-installed but can be amended and extended.

The chart of accounts installed with the Prelude Desktop products is four characters but this can be extended to up to eight characters. The chart of accounts is fully flexible, as is the format for Profit and Loss, Balance Sheet and other management reports.

See Add & Edit Nominal Accounts for a more detailed explanation of how you can edit the chart of accounts to exactly represent your business.

This flexibility means that it is possible to recognise a business’s management and reporting structure within the nominal ledger, as well as comply fully with GAAP, FRS 102, HMRC and statutory reporting and accountability requirements.

When the system is fully and properly configured, nearly all of the transactions in the nominal ledger, their debit and credit monetary values and their account codes will be selected automatically by the system as you go about your normal business processes of producing customer invoices, receiving supplier invoices, paying and receiving cash as expenditure and income.