Chart of Accounts

Overview#

The Chart of Accounts is the foundation of your financial reporting. Artifi uses a master-and-override pattern that lets you define accounts once at the organization level while allowing individual legal entities to customize specific accounts when needed.

This means you maintain a single chart of accounts across your entire organization, while each entity can override account names, descriptions, or settings where they differ.

---

How It Works#

Master Accounts#

Master accounts are defined at the organization level. They represent the canonical version of each GL account and include:

• Account Number — The unique identifier (e.g., 1000, 4100, 5200)
• Account Name — Descriptive name (e.g., "Cash and Cash Equivalents")
• Account Type — Asset, Liability, Equity, Revenue, Expense, or Contra
• Account Subtype — Further classification (Current Asset, Long-term Liability, etc.)
• Normal Balance — Debit or Credit
• Currency — Functional currency for the account
• Active Status — Whether the account is available for posting

Entity Overrides#

When a specific entity needs a different account name, description, or status, an entity override is created. Overrides are sparse — you only create them when something differs from the master.

Example:

• Master account 4000 is named "Revenue"
• Entity "US Operations" overrides it to "Product Sales Revenue"
• Entity "EU Operations" uses the master name "Revenue" (no override needed)

Effective View#

When you query accounts, the system automatically merges master accounts with any entity overrides. You always see the correct, resolved version for each entity without having to manage the merge logic yourself.

---

Account Types#

---

Account Subtypes#

Subtypes provide more granular classification for reporting:

Assets#

• Current Asset (cash, receivables)
• Non-Current Asset (equipment, intangibles)
• Fixed Asset (land, buildings, machinery)

Liabilities#

• Current Liability (payables, accrued expenses)
• Non-Current Liability (long-term loans)

Equity#

• Capital
• Retained Earnings
• Other Equity

Revenue & Expense#

• Operating Revenue / Expense
• Non-Operating Revenue / Expense
• Cost of Goods Sold

---

Data Efficiency#

The master-and-override pattern provides significant data efficiency:

• Without overrides: 99 accounts x 6 entities = 594 duplicate rows
• With overrides: 99 master accounts + only the overrides that differ
• Result: Up to 6x data reduction while maintaining full entity-specific customization

---

Key Features#

Global vs. Entity-Specific Accounts#

Accounts can be marked as global (visible to all entities) or entity-specific (only visible to entities that have an override).

Most accounts are global — all entities share the same chart of accounts. Entity-specific accounts are used for unique requirements like country-specific tax accounts.

Account Hierarchies#

Accounts are organized hierarchically using account number ranges:

• 1000–1999 — Assets
• 2000–2999 — Liabilities
• 3000–3999 — Equity
• 4000–4999 — Revenue
• 5000–5999 — Cost of Goods Sold
• 6000–6999 — Operating Expenses
• 7000–7999 — Other Income/Expenses

Posting Controls#

• Accounts can be marked as header accounts (for grouping only, no direct posting)
• Accounts can be locked to prevent new postings while keeping historical data
• Accounts can be deactivated to remove them from selection lists

---

Common Operations#

Creating Accounts#

New master accounts are created at the organization level. They automatically become visible to all entities (if marked global). Required fields include account number, name, type, and normal balance.

Updating Accounts#

You can update account properties at the master level (affects all entities) or create/update an entity override (affects only that entity).

Viewing the Chart#

The chart of accounts can be viewed filtered by:

• Legal entity
• Account type (Assets, Liabilities, etc.)
• Active/inactive status
• Accounts with/without overrides

---

Integration with Other Modules#

The chart of accounts integrates with:

• Posting Profiles — Define default GL accounts for transactions (AR, AP, etc.)
• Financial Reporting — Trial balance, income statement, balance sheet
• Tax Management — Tax-related account mapping
• Budgets — Budget lines reference GL accounts
• Dimensions — Accounts can be tagged with dimensions (department, project, etc.)