The Chart of Accounts is the backbone of any accounting system. That's why it's so important to understand how it works.
The Chart of Accounts contains a complete list of your business's accounts and their balances. You use it to track how much money your company has, how much money it owes, how much money is coming in, and how much money is going out.
Think of the Chart of Accounts as a file cabinet, with a file for each bit of accounting information that you wish to track. For example, if you need to know how much money you spend on postage, you'll set up a file (an account in the chart of accounts) for postage expenses.
