Key takeaways
What this article covers, in order:
- Why should you care about a list of account names?
- The five account types, in plain English
- A simple numbering scheme
- Sample chart of accounts for a small Australian business
- How do you tweak it for your industry?
- How many accounts is too many?
A chart of accounts is simply the list of buckets every dollar in your business gets sorted into. For most Australian small businesses, 30 to 50 accounts across five types (assets, liabilities, equity, income and expenses) is plenty. Below is a sample Australian chart of accounts you can adapt, a simple numbering scheme, and the mistakes that make a chart harder to live with than it needs to be.
Why should you care about a list of account names?
Because every report you'll ever read is built from it. Aisha is opening a Pilates studio in Adelaide. Her software came with a default chart of 140 accounts, including "Aircraft Expenses" and "Livestock Purchases". She spent her first month guessing between "Advertising", "Marketing" and "Promotion" for the same Instagram ads. By the end of the month her P&L showed $410 in each, which told her nothing.
A good chart does the opposite. Every transaction has one obvious home, and the reports answer the questions you actually ask: what did classes bring in, what did the studio cost to run, how much is going on instructors?
The five account types, in plain English
| Type | What it means | Examples |
|---|---|---|
| Assets | Things the business owns or is owed | Bank accounts, money customers owe you, equipment, stock |
| Liabilities | What the business owes others | Credit card, supplier bills, loans, GST collected but not yet paid |
| Equity | What's left for the owner | Owner's capital, drawings, retained profits |
| Income | Money earned from selling | Class fees, product sales, interest received |
| Expenses | Costs of running the business | Rent, wages, software, insurance |
Assets, liabilities and equity show up on your balance sheet. Income and expenses show up on your profit and loss. That's the whole structure.
A simple numbering scheme
Numbers keep the list in a sensible order and make it easy to add accounts later without everything shuffling around. A common scheme:
- 1-xxxx Assets
- 2-xxxx Liabilities
- 3-xxxx Equity
- 4-xxxx Income
- 5-xxxx Cost of sales (direct costs of what you sell)
- 6-xxxx Operating expenses
Leave gaps. Number your first expenses 6-1000, 6-1100, 6-1200, so you can slot 6-1150 in between when you need it.
Sample chart of accounts for a small Australian business
Here's a lean starting chart for a service business that sells a few products, like Aisha's studio. Remove what you don't need and rename to suit.
| Code | Account | Type |
|---|---|---|
| 1-1000 | Business transaction account | Asset |
| 1-1100 | Business savings account | Asset |
| 1-1200 | Petty cash | Asset |
| 1-1300 | Accounts receivable | Asset |
| 1-1400 | Inventory (retail stock) | Asset |
| 1-1500 | Prepaid expenses | Asset |
| 1-2000 | Studio equipment | Asset |
| 1-2010 | Less accumulated depreciation, equipment | Asset (negative) |
| 2-1000 | Business credit card | Liability |
| 2-1100 | Accounts payable | Liability |
| 2-1200 | GST collected | Liability |
| 2-1210 | GST paid | Liability (reduces GST owed) |
| 2-1300 | Accrued expenses | Liability |
| 2-2000 | Equipment loan | Liability |
| 3-1000 | Owner's capital | Equity |
| 3-1100 | Owner's drawings | Equity |
| 3-1200 | Retained earnings | Equity |
| 4-1000 | Class fees | Income |
| 4-1100 | Memberships | Income |
| 4-1200 | Retail sales | Income |
| 4-9000 | Interest received | Income |
| 5-1000 | Cost of retail stock sold | Cost of sales |
| 5-1100 | Contract instructors | Cost of sales |
| 6-1000 | Rent | Expense |
| 6-1100 | Electricity and gas | Expense |
| 6-1200 | Insurance | Expense |
| 6-1300 | Advertising and marketing | Expense |
| 6-1400 | Software and subscriptions | Expense |
| 6-1500 | Bank and merchant fees | Expense |
| 6-1600 | Cleaning | Expense |
| 6-1700 | Repairs and maintenance | Expense |
| 6-1800 | Accounting and bookkeeping fees | Expense |
| 6-1900 | Depreciation | Expense |
| 6-2000 | Interest expense | Expense |
| 6-2100 | Wages and super | Expense |
That's 35 accounts. Most small businesses run happily on something this size for years.
A note on the two GST accounts: they exist so the GST you collect and the GST you pay are tracked separately from your income and costs. Keep GST coded correctly on each transaction; your BAS agent or accountant handles lodgement.
How do you tweak it for your industry?
The bones stay the same. What changes is income and cost of sales, because that's where your business is different from everyone else's.
- Tradies and builders: split income by job type if it helps you price ("Maintenance", "New installs"). Add cost of sales accounts for materials and subcontractors. Add a vehicle expenses account, or one per vehicle if you want to compare them.
- Retail and e-commerce: inventory and cost of goods sold become central. Add merchant and platform fees as their own expense so you can see what selling online really costs.
- Consultants and freelancers: often barely need cost of sales at all. A single income account plus a handful of expenses may be enough.
- Hospitality: separate food and beverage cost of sales so you can see each margin, and a cash clearing account for takings before they're banked.
How many accounts is too many?
There's no magic number, but here's a useful test: if you'd never make a different decision based on two accounts being separate, merge them. "Stationery" and "Printing" and "Office supplies" rarely need to be three accounts. "Rent" and "Repairs" absolutely should be two.
The other test is the year-end one. Your accountant will map your accounts into the categories they need. A sensible, plainly named chart makes that quick. A chart with 14 types of travel makes it slow, and you pay for the time.
Mistakes we see often
- A catch-all account that grows. "Sundry expenses" or "General" with thousands in it means the categorising got skipped. Keep it near zero.
- Personal spending in expense accounts. If the owner uses the business card for groceries, that goes to drawings (or a loan account if it's a company), not "Office supplies". Your accountant can advise on the company-and-director side.
- Changing accounts mid-year. Renaming or merging in the middle of a financial year makes month-to-month comparisons messy. If you can, restructure at the start of a year, say 1 Jul 2027 for FY2027-28.
- Deleting accounts that have history. Archive or deactivate them instead, so past reports still make sense.
- Copying a huge template. Start lean. It's much easier to add an account than to clean out 60 unused ones.
How HelloBooks helps
In HelloBooks, every bank-feed or CSV transaction lands in a review list where you confirm or change the category it goes to, so the chart you settle on gets used consistently. Your P&L, Balance Sheet and Cash Flow reports are built from those categories on every plan, including Free. If you hold stock, have a look at our Australian inventory page. On Pro (A$30/month), AI auto-categorisation suggests accounts as transactions arrive, and AI Analysis is available on every report. You can invite your bookkeeper, BAS agent or accountant into the same books so the chart gets agreed once. See all bookkeeping features or compare plans on pricing.
FAQs
Is there a standard chart of accounts in Australia?
No single mandatory one for small businesses. Most software ships with a default, and accountants often have a preferred layout. Use a sensible default and trim it to fit.
Should I number my accounts?
It helps, mainly to keep similar accounts together and leave room to grow. Plenty of small businesses use names only and are fine. Pick one approach and stick with it.
What's the difference between cost of sales and expenses?
Cost of sales is what it directly costs to deliver what you sell, such as stock or a subcontractor on a job. Expenses are the costs of running the business whether you sell anything or not, like rent and insurance. Separating them shows your gross profit, which tells you whether your pricing works.
Can I change my chart of accounts later?
Yes. Add accounts any time. For merges or big restructures, aim for the start of a financial year, and check with your accountant first so their year-end mapping still works.
Where do loan repayments go?
The principal reduces the loan liability account. The interest goes to interest expense. Your lender's statement shows the split.
Set it up once, keep it lean, and every report afterwards gets easier to read.
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