You are here: 2. General Ledger > 2.2. Setting up and Configuring MGL > 2.2.3. Common Micronet GL Structures > 2.2.3.1. The Smaller Organisation > Setup a Chart of Accounts
Setup a Chart of Accounts

Most small or less complicated organisations use a simple Chart of Accounts. In a simple Chart of Accounts, Sales and Cost of Sales are generally single GL accounts with a calculation for Gross Profit appearing in the Profit & Loss. Other Income and Operating Expenses naturally offset against Gross Profit with a calculation for Net Profit appearing at the end of the report. This simple format gives management the fundamentals necessary to evaluate the profitability of the business.

The Balance Sheet section of the Chart of Accounts is broken down into the usual major categories of Assets versus Liabilities, allowing a calculation for Net Assets which provides management with a running balance of the worth of the business. These areas are generally broken down further into Current and Non-Current in order to establish liquidity - that is, whether the business can meet its financial obligations. Further dissections and totals, such as Receivables, Inventories, Creditors & Borrowings and so on, are setup within these classifications to give more detailed and meaningful analysis at a glance.

For information about setting up your Chart of Accounts, refer to "File - GL Accounts".