A deliberately short chart you can actually maintain, with income, cost of goods sold and operating expenses kept to the lines a small business really uses.

20Accounts

3Levels deep

2Formats

A general small-business chart. Numbered 4xxx income, 5xxx cost of goods sold, 6xxx operating expenses, so it expands into a fuller chart later without renumbering.

Download the starter set chart

Pick a format. The file downloads immediately.

What is different

Most charts of accounts fail because they are too big

The usual failure is not a missing account. It is two hundred accounts nobody codes to, so invoices land in Miscellaneous and the P&L stops meaning anything by March.

This template is twenty accounts. Every one of them is a line a small business genuinely spends against. When a category starts carrying real money, split it then, on evidence, rather than guessing up front.

The chart

The full Small business chart of accounts

All 20 accounts, with the note that tells you what belongs in each one. This is the same file the download gives you, rendered here so you can read it without opening a spreadsheet.

Code	Account	Type	What belongs here
4000	Income	Income	Top-level revenue. Every sales account rolls up here.
4010	Services	Income	Fees earned for work performed rather than goods sold.
4020	Product Sales	Income	Physical goods sold to customers.
8010	Other Income	Other income	Income outside representation activity.
6000	Expenses	Expense	Operating costs of running the business.
6010	Advertising & Marketing	Expense	Advertising spend and marketing programmes not tied to one event.
6020	Bank Charges & Fees	Expense	Account, wire and other charges levied by the bank.
6030	Contract Labor	Expense	Individuals engaged as contractors rather than employees. Watch the 1099 threshold.
6040	Insurance	Expense	Property, contents, general and umbrella liability insurance.
6050	Meals & Entertainment	Expense	Business meals and entertaining. Partially deductible, so keep it separate.
6060	Office Supplies	Expense	Office consumables and general supplies.
6070	Professional Services	Expense	Outside professional advice, including accounting and legal.
6080	Rent & Lease	Expense	Rent and lease payments on premises and equipment.
6090	Software & Subscriptions	Expense	Recurring software licences and subscriptions.
6100	Travel	Expense	Agency travel not recharged to a client.
6110	Utilities	Expense	Electricity, gas, water and waste for the premises.
9010	Other Expense	Other expense	Below the line costs that are not part of operations.
5000	Cost of Goods Sold	Cost of goods sold	Direct cost of what you sold.
5010	Materials & Supplies	Cost of goods sold	Raw materials and supplies consumed producing what you sold.
5020	Direct Labor	Cost of goods sold	Wages for staff whose time is directly attributable to what you sold.

Questions

Small business chart of accounts questions

How many accounts should a small business have?

Fewer than you think. Twenty to forty is enough for most service and product businesses. The right test is whether every account has had at least one transaction in the last quarter. If it has not, it is costing you coding decisions and giving you nothing back.

What is the difference between cost of goods sold and an operating expense?

Cost of goods sold moves with what you sell; operating expenses do not. Materials for a job are cost of goods sold. Your accounting software subscription is an operating expense whether you sell one unit or a thousand. Getting this split right is what makes gross margin a real number.

Should I use account numbers?

Yes, even if your software does not require them. Numbers group the chart so reports sort predictably and so anyone can see at a glance whether an account is revenue or an expense. This template uses 4xxx for income, 5xxx for cost of goods sold and 6xxx for operating expenses.

Can I add my own accounts?

That is the point. Take the file, add the lines your business actually needs, and delete the ones it does not. Keeping the numbering series intact means the additions still sort correctly.

See your own invoices coded to this chart

Send us a week of real vendor invoices. We will run them through Cleo, code each one to the right account, and show you the result posted in QuickBooks.

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