What is the main accounting class

Chart of accounts

A chart of accounts is auniform directory of all bookkeeping accounts for an industry. These accounts areclearly named with account numbers. The chart of accounts enables the company to better compare it to other companies in the industry and to other business years of the company.

Table of Contents

  1. What is a chart of accounts?
  2. How is a chart of accounts structured?
  3. What are the advantages of a chart of accounts?
  4. What are the common standard chart of accounts for Germany?
  5. What is the most common chart of accounts for Austria?
  6. What is the most common chart of accounts for Switzerland?
  7. Special chart of accounts

What is a chart of accounts?

A core function of accounting in a company is to answer questions from different areas at the end of a financial year with little additional effort. So it forms theBasis for important decision-making processes. In this respect, it is important that the figures from financial accounting can be compared with other financial years and also with companies in the same industry. For this to be possible, you need oneuniform classification scheme for the accounts of the financial accounting, which is a so-called Chart of accounts supplies.

A chart of accounts is auniform directory of all bookkeeping accounts for an industry. These accounts areclearly named with account numbers. A chart of accounts enables the company to better compare it, which can relate to the following aspects:

  • to other companies in the industry
  • to other business years of the company

A chart of accounts is set up as arecommendation to the individual companies, this is not a legally binding requirement. However, since important decisions are made in the company on the basis of accounting, oneuniform use of accounts makes perfect sense.

In addition, the need for a uniform accounting scheme can be derived from the “principles of proper accounting” (GoB for short). The GoB are rules for accounting that have been compiled over time from case law, practice and recommendations from associations.

A principle of the GoB is the principle ofClarity and clarity. He demands that the bookkeeping must be designed in such a way that it can “give an expert third party an overview of the business transactions and the situation of the company within a reasonable period of time”. And that is exactly the purpose of a chart of accounts.

Notice:
A chart of accounts ensures that the same business processes in different companies result in the same postings or the use of the same account numbers.

How is a chart of accounts structured?

In a German chart of accounts, a four-digit number is usually assigned to each account. As can be seen in Table 1, each digit corresponds to a structural level.

Outline levels of account numbers:

How the individual account classes and account groups are defined depends on the corresponding chart of accounts. Therefore, you will not find a concrete example at this point in the article.

There are essentially two different principles of order for a chart of accounts. These have an impact on the order of the respective account classes.

Principles of order for charts of accounts:

What are the advantages of a chart of accounts?

The practice of double-entry bookkeeping would be a mess if there weren't any charts of accounts for guidance. Every company would start with the same big problem: How do I name my accounts and how should I do this?
A chart of accounts therefore has a number of major advantages:

  • There is oneclear and concise system for the allocation of account numbers.
  • Thecomparability accounting variousCompanies is ensured.
  • Thecomparability the numbers of severalFiscal years is possible.
  • The standardized allocation of account numbers enablesNetworked software programsfor example, the data from the accounting program are automatically transferred to the control programs.
  • Theintroduction of new employees is made easier.

What are the common standard chart of accounts for Germany?

The CompanyDatev has developed numerous charts of accounts that are tailored to specific industries. When looking for a suitable chart of accounts, you will quickly come across the term “SKR”, which is the abbreviation for standard chart of accounts.

Note:
A standard chart of accounts is a chart of accounts that has been structured according to certain organizational criteria.

Standard chart of accounts according to Datev:

The most widely used standard accounts in Germany are theSKR 03 andSKR 04.

What is the most common chart of accounts for Austria?

In Austria, the"Austrian standard accounting framework" used. This is structured according to the method of the financial statements, i.e. the order of the account classes is based on the structure of the annual financial statements (balance sheet and profit and loss account).

Austrian standard account framework:

The Austrian standard account framework has the special feature that the account numbers only consist of three digits. The account class (see table) defines the first digit of the account number, the second digit defines the account group and the third digit the specific account.

example:
The accounts 280 to 288 are reserved for "credit balances with banks". The account class here is 2 (other current assets, prepaid expenses), account group 28 (cash in hand, checks, bank balances) and the account numbers for the special bank accounts 280 to 288.

What is the most common chart of accounts for Switzerland?

The most widespread chart of accounts in Switzerland is also based on the method of the financial statements and is therefore based on the structure of the balance sheet, like the SKR 04 and the Austrian standard chart of accounts. He calls himselfSME chart of accounts (Chart of accounts for small and medium-sized companies in production, trade and services) and replaced the now outdated Käfer chart of accounts (named after its creator, Dr. Käfer).

In the following table you can see an overview of the existing account classes of the SME account framework.

Swiss SME chart of accounts:

The account class determines the first digit of the four-digit account number. The second digit defines the main account group, the third digit the account group and the fourth digit the special account.

example:
Accounts 1020 to 1029 are reserved for “bank balances”. The account class here is 1 (assets), the main account group 10 (current assets), the account group 102 (bank balances) and the account numbers for the special bank accounts 1020 to 1029.

Special chart of accounts

For a large number of companies in Germany, the standard accounting frameworks are perfectly adequate as a basis for their bookkeeping. However, the standardized groupings are difficult to use for some industries or for very specific companies, as some accounts are simply missing or a more precise subdivision is necessary. For these cases, special charts of accounts have been developed that are precisely tailored to the needs of the industry or the specific company. However, the basis for these special charts of accounts is usually the standard chart of accounts. For example, these have been expanded and structured in more detail depending on the industry.

Note:
There are special charts of accounts for certain industries that have been developed by adapting the standard chart of accounts. However, some companies have such great peculiarities in their accounting practice that there are charts of accounts specially developed for them.

Special chart of accounts:

The industrial chart of accounts

This chart of accounts, also known as IKR for short, was specially developed for industrial companies. It should be applicable to all companies in industry, regardless of how big the company is and what legal form it has. If there are significant industry-specific features, the industry chart of accounts can be used as the basis for the company's chart of accounts.

It is important for the ICR that he doesTwo-circuit system Takes into account. This means that there are accounts for the bookkeeping (external accounting) as well as accounts for theCost and performance accounting (internal accounting). All other charts of accounts mentioned in this article are afterSingle circuit system established, i.e. that the accounts of the financial accounting and the accounts of the cost and performance accounting are recorded together.

The ICR was drawn up in accordance with the financial statement structure, so the account classes are based on the balance sheet and the income statement.

Industry chart of accounts:

Overall, the account numbers for the industry chart of accounts, like most charts of accounts, have four digits. The first digit is the account class defined in the table above, followed by the account group as the second digit, the third digit is the account subgroup and the fourth digit is used to name the respective individual account.

example: IR
Accounts 2880 to 2889 are reserved for "cash". The account class here is 2 (current assets and prepaid expenses), the main account group 28 (cash and cash equivalents), the account group 288 (cash desk) and the account numbers for the individual cash registers 2880 to 2889.

The author of this article is Ertan Özdil, CEO, founder and partner of the cloud ERP provider weclapp.

Please note the legal information on this article