Chart of Accounts
Also known as: COA
A chart of accounts is the master list of every category your business records money into — each income, expense, asset, liability, and equity bucket.
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What it actually means
The chart of accounts is the filing system your books are built on. Every transaction is assigned to one of its accounts, and every report — profit and loss, balance sheet — is those accounts summed and arranged. A good chart is specific enough to answer real questions and short enough to stay consistent: separate lines for the costs you actively manage, one bucket for everything minor. The common failure is sprawl, where near-duplicate categories accumulate until the same expense lands in three places and the reports stop meaning anything. Setting it up deliberately at the start saves years of ambiguity later.
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A detail shop might run separate expense accounts for supplies, equipment, rent, payroll, and advertising — with advertising split by channel.
If advertising is a single line, you can't tell what Meta cost you versus Google versus print. Splitting ad spend into its own accounts by channel is what turns a P&L into something you can judge marketing decisions from.
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Numbers and costs
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Related terms
The general ledger is the complete record of every transaction your business has posted, organized by account.
A marketing P&L is a profit and loss view of your advertising: the revenue your campaigns produced in a period, minus ad spend, agency fees, and the cost of delivering what you sold, ending with the profit or loss the marketing actually made.
A balance sheet is a snapshot of what your business owns, what it owes, and what is left over for the owners on a specific date.
Reconciliation is the monthly check that your books match your bank and card statements — same transactions, same ending balance.
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