Each General Ledger (GL) Chart of Account must be assigned to a category. Categories are a way of organising the Chart of Accounts and are used for sorting and sub-totalling to provide structure on General Ledger reports.
The first digit of a category code signifies whether a GL account under the category is a ‘Balance Sheet’ account or a ‘Profit & Loss’ account. Categories starting with a digit between 1 and 4 are Balance Sheet accounts and those starting between 5 and 9 are P&L accounts.
Category Codes assigned to General Ledger Accounts codes must be 3 characters in length. The 3-character code itself is the instrument that is used to provide the structure in the GL reports and separate the data into groups and subtotals if required.
The first 2 characters of the Category code can consist of digits arranged in a hierarchy of section groupings. The first digit signifies the major category. The second and third define the sub-categories for the grouping. Following is an example of how the hierarchy can operate:
| Category | Description | Grouping |
| 110 | Cash | |
| 112 | Receivables | |
| 115 | Inventory | |
| 11 | Current Assets | Total (110+112+115) |
| 120 | Motor Vehicles | |
| 112 | Furniture and Fittings | |
| 124 | Equipment | |
| 12 | Fixed Assets | Total (120+122+124) |
| 1 | Assets | Total (11+12) |
| 210 | Payables | |
| 215 | Accruals | |
| 21 | Current Liabilities | Total (210+215) |
| 220 | Long Term Loan | |
| 22 | Non-Current Liabilities | Total (220) |
| 2 | Liabilities | Total (21+22) |
The 3-digit categories are mandatory and must be created in GL Categories Maintenance to be allocated to General Ledger Accounts. The 2-digit and 1-digit categories must also be created in GL Categories Maintenance if subtotal groupings are required.
To get an appreciation of the structure of the GL reporting available suggest you review the GL Reports post.
Examples
Some typical examples of GL Categories are:
- Fixed Assets
- Current Liabilities
- Sales
- Expenses
- Equity
Minimum Requirements
The entry of a ‘Category’ against a Chart Of Account code in the system is mandatory, so you must set up at least one ‘Category’. A basic set of categories can be provided with the software to get you started.
Changing Established Data
Categories can be revised, re-numbered, re-sequenced or renamed at any time after initial set-up.
Panel Options
- Standard panel features
- Maintenance
- Views
- Audit – lists data changes made over time to the category currently being viewed
- Where Used – lists chart of accounts assigned to the category currently being viewed
- Reports
- List Categories