Chart of Accounts for Small Business: Structure, Numbering, and a Sample List

Last updated July 2026.

A chart of accounts is the master list of every account your business uses to record money, organized into five types: assets, liabilities, equity, income, and expenses. Each account gets a name and usually a number, and every transaction you post lands in one of them. A small business typically needs 30 to 80 accounts, not hundreds. Get the structure right and your reports (profit and loss, balance sheet) build themselves; get it wrong and every month closes messy.

This guide explains the five account types, the standard number ranges bookkeepers use, and gives a sample chart of accounts you can copy. It also shows how to build one straight from your bank statements so the categories you set up actually match the transactions you have.

What is a chart of accounts?

A chart of accounts (COA) is the organized index of all the financial accounts in your general ledger. It does not hold dollar amounts itself; it defines the buckets that transactions get sorted into. When you categorize a bank transaction as office supplies, that expense account lives in the chart of accounts, and its balance rolls up into your income statement. The chart is the backbone that turns raw transactions into readable financial statements.

Every account belongs to one of five types. Assets and liabilities and equity make up the balance sheet (what you own, what you owe, and what is left over for the owners). Income and expenses make up the income statement, also called the profit and loss. Keep those five groups clean and your reports are correct by construction.

The five account types and their number ranges

Most accounting software assigns each account a number, and there is a widely used convention for the ranges. The numbering is not a legal requirement, but following it keeps accounts in a logical order and makes the chart readable at a glance. The table below shows the standard ranges, what each type reports, and common examples.

A sample small business chart of accounts

Here is a lean starter chart of accounts that works for most service and small product businesses. Add accounts only when you have a real reason to track something separately; a shorter chart is easier to keep clean.

How many accounts does a small business need?

Fewer than most people expect. A solo consultant might run 25 to 35 accounts; a small product business with inventory and payroll might run 50 to 80. The failure mode is too many, not too few: a separate expense account for every little thing produces a profit and loss no one can read. A good rule is to create an account only when you will act on the number, for example when a category maps to a tax line or you want to watch it as a percentage of revenue. If you never look at it separately, fold it into a broader account.

Chart of accounts vs Schedule C categories

Your chart of accounts and your tax return should line up, but they are not identical. The IRS Schedule C has a fixed set of expense lines (advertising, car and truck, contract labor, supplies, and so on), while your chart of accounts can be more detailed for management. The practical move is to name your expense accounts so each one clearly maps to a Schedule C line, which makes tax time a copy exercise instead of a reclassification project. Our full small business expense categories list with Schedule C lines shows that mapping in detail.

How to build a chart of accounts from your bank statements

The fastest way to build a chart that actually fits your business is to start from what already moved through your accounts. Pull a few months of statements, convert them to a spreadsheet, and look at where the money went. The recurring payees and deposit sources become your accounts; you are not guessing at categories, you are naming the ones you already use.

A repeatable workflow: convert each statement PDF to rows with the bank statement converter, then run transaction categorization to group the lines into income and expense buckets. The buckets that emerge are your chart of accounts. From there you can turn the categorized data into reports, or bring it into QuickBooks so your accounts and the software's chart stay in sync. If you are catching up on past months, our guide to catch-up bookkeeping from bank statements uses the same approach.

Chart of accounts best practices

• Keep it lean. Start small and add accounts only when a number will change a decision.
• Use the standard number ranges (1000s assets, 2000s liabilities, 3000s equity, 4000s income, 5000s COGS, 6000s and up expenses).
• Name expense accounts to match your tax return so Schedule C is a copy job.
• Do not mix personal and business spending; a commingled account makes every category unreliable.
• Review the chart once a year and merge accounts you never actually report on separately.

Key points

• A chart of accounts is the master list of accounts, sorted into assets, liabilities, equity, income, and expenses.
• Standard number ranges are 1000s for assets, 2000s liabilities, 3000s equity, 4000s income, 5000s cost of goods sold, and 6000s and up for expenses.
• Most small businesses need 30 to 80 accounts; too many is the common mistake.
• Name expense accounts to match Schedule C so tax time is a copy exercise.
• Build the chart from your actual bank statements by converting them to a spreadsheet and categorizing the transactions.