Creating Account Sub-types

Creating Account Sub-types

Account Sub-types provide an additional level of organization in your Chart of Accounts, allowing you to group related accounts within each account type. This guide explains when and how to create account sub-types in EquiBillBook.

Understanding Account Sub-types

Account Sub-types are intermediate categories that sit between Account Types and Individual Accounts in the Chart of Accounts hierarchy:

• Account Type: Top level (Assets, Liabilities, Income, Expenses, Equity)
• Account Sub-type: Second level (e.g., Current Assets, Fixed Assets under Assets)
• Individual Account: Third level (e.g., Cash Account, Bank Account under Current Assets)

When to Use Account Sub-types

Account Sub-types are useful when:

• You have many accounts of the same type and need better organization
• You want to generate reports grouped by sub-categories
• You need to maintain a structured account hierarchy
• You want to organize accounts for better financial reporting
• Your business requires detailed account categorization

Common Sub-type Examples

Under Assets

• Current Assets: Cash, Bank, Accounts Receivable, Inventory
• Fixed Assets: Property, Plant & Equipment, Vehicles, Furniture
• Investments: Long-term investments, Marketable securities

Under Liabilities

• Current Liabilities: Accounts Payable, Short-term Loans, Tax Payable
• Long-term Liabilities: Long-term Loans, Mortgages, Bonds Payable

Under Income

• Operating Income: Sales Revenue, Service Revenue
• Other Income: Interest Income, Dividend Income, Gain on Sale

Under Expenses

• Operating Expenses: Cost of Goods Sold, Salary, Rent, Utilities
• Administrative Expenses: Office Supplies, Professional Fees, Insurance
• Financial Expenses: Interest Expense, Bank Charges

Accessing Account Sub-types

To create account sub-types:

1. Navigate to Accounts module from the main menu
2. Click on Chart of Accounts or Accounts
3. Go to Account Types or Account Settings
4. Select the account type under which you want to create a sub-type
5. Look for Sub-types or Account Sub-types option

Creating a New Account Sub-type

Step 1: Select Parent Account Type

Choose the account type under which you want to create the sub-type:

• Assets
• Liabilities
• Income
• Expenses
• Equity

Step 2: Click "Create Sub-type" or "Add Sub-type"

Look for the button to add a new sub-type (usually within the account type details or sub-types section).

Step 3: Enter Sub-type Details

Fill in the following information:

• Sub-type Name: Enter a descriptive name (e.g., "Current Assets", "Operating Expenses")
• Sub-type Code: (Optional) Enter a code for the sub-type
• Description: (Optional) Add a description explaining the purpose of this sub-type
• Parent Account Type: Ensure the correct parent type is selected

Step 4: Configure Sub-type Settings

Set additional options if available:

• Status: Active or Inactive
• Display Order: Order in which sub-types appear
• Account Code Range: (Optional) Define a code range for accounts under this sub-type

Step 5: Save the Sub-type

Click "Save" or "Create" to create the account sub-type.

Editing Account Sub-types

To modify an existing sub-type:

1. Navigate to the Account Sub-types section
2. Find the sub-type you want to edit
3. Click "Edit" or click on the sub-type name
4. Update the sub-type name, code, or description
5. Click "Update" or "Save"

Assigning Accounts to Sub-types

After creating sub-types, you can assign individual accounts to them:

While Creating an Account

• When creating a new account, select the account type first
• Then select the appropriate sub-type from the dropdown
• Complete the account creation process

Editing Existing Accounts

1. Go to the Chart of Accounts
2. Find the account you want to assign to a sub-type
3. Edit the account
4. Select the appropriate sub-type
5. Save the changes

Sub-type Hierarchy Structure

A well-organized structure might look like:

• Assets
  • Current Assets
    • Cash Account
    • Bank Account
    • Accounts Receivable
  • Fixed Assets
    • Property
    • Vehicles
    • Equipment
• Expenses
  • Operating Expenses
    • Salary Expenses
    • Rent Expenses
    • Utilities
  • Administrative Expenses
    • Office Supplies
    • Professional Fees

Benefits of Using Sub-types

• Better Organization: Groups related accounts together
• Improved Reporting: Generate reports by sub-type for detailed analysis
• Easier Navigation: Find accounts more quickly in a large Chart of Accounts
• Structured Hierarchy: Maintains a clear account structure
• Financial Analysis: Analyze financial data at different levels

Best Practices

• Create sub-types only when you have multiple accounts that need grouping
• Use clear, descriptive names for sub-types
• Follow a consistent naming convention
• Don't create too many sub-types - keep it simple
• Ensure sub-types align with your reporting needs
• Review and consolidate sub-types periodically if needed

Sub-type vs. Individual Accounts

Understanding when to use sub-types vs. creating more individual accounts:

• Use Sub-types: When you have 5+ accounts of similar nature that benefit from grouping
• Skip Sub-types: When you have only a few accounts or accounts don't need grouping
• Consider Business Size: Larger businesses typically benefit more from sub-types

Deleting or Deactivating Sub-types

If you need to remove a sub-type:

• Deactivate: Set status to Inactive (accounts remain but sub-type is hidden)
• Reassign Accounts: Move accounts to another sub-type before deleting
• Delete: Only if no accounts are assigned to the sub-type

Note: Be careful when deleting sub-types as it may affect your account organization and reports.

Reports by Sub-type

With sub-types configured, you can:

• Generate reports grouped by sub-type
• View account summaries at the sub-type level
• Analyze financial data by sub-category
• Create custom reports filtering by sub-type

Need Help?

If you need assistance with account sub-types:

• Review the default account structure in EquiBillBook
• Check the Account Types guide to understand the hierarchy
• Refer to the Creating Individual Accounts guide for account creation
• Consult with your accountant for proper account organization

Account Sub-types help organize your Chart of Accounts effectively. Use them when you need better structure and more detailed financial reporting capabilities!