🎑 Background
Puzzle provides users with a default chart of accounts (COA), which defines the standard financial statement categories used for accounting purposes. The accounts in the COA are also referred to as “General Ledger accounts” because these are the accounts that are used in the General Ledger.
Users can also create sub-accounts for any of the default accounts.
🔍 Where will these accounts show up?
Categorization of transactions: Each account in the COA corresponds to a “category.” With the help of rules and automation, users apply a category to each transaction in Puzzle, which determines which account the transaction will be recorded in the General Ledger.
Financial statements: Each account in the chart of accounts relates to a specific financial statement line in the Balance Sheet or Profit & Loss Statement (P&L).
🎥 Chart of Accounts Preview (Google Sheets)
Within the Google Sheet linked above, you can see the Puzzle standard chart of accounts.
A few notes:
Accounts with an "indentation" marker (└) are sub-accounts. These accounts roll up to parent accounts. Most of the parent accounts do not allow posting.
Accounts highlighted in light blue (such as the bank, credit card, and payroll accounts) are integration-driven, so they will not be created until an integration is set up. The COA will reflect these sub-accounts after integration.
➕ Customizing the Chart of Accounts
You can add sub-accounts to your company’s chart of accounts within Puzzle, which allows you to organize your finances for certain categories that are especially important to your business.
Upon request, a Puzzle admin ([email protected]) can also add additional parent-level accounts to your specific chart of accounts. We can also work with you to add a custom chart of accounts, if you have an existing COA that you want to use.
🤔 When might you want to customize the chart of accounts (or not)?
Based on your business model or desired level of detail, you may want to add additional accounts to the default chart of accounts. The Puzzle chart of accounts is meant to serve as a baseline but will not suit every company perfectly. That’s why we add the ability to customize! Beware of having a too-large chart of accounts though; it’s easy to get carried away and get too detailed, such that your chart of accounts becomes as specific as each vendor. Doing so can make it hard to find the things you really need, making your financials harder to manage. It also separates items that should really be considered as a unit. You want to be sure your accounts provide summary-level detail.
🗞️ Extra insight: Structure of the account numbers
10000-Series: Asset accounts
10000-14999 >>> Current
Order of liquidity**
10000-10999 >>> Cash and Cash Equivalents
11000-11999 >>> Marketable Securities and Investments, Reserves of Cash
12000-12999 >>> Accounts receivable
13000-13999 >>> Prepaid Assets & Other Current Assets
13000-13499 >>> Prepaid Assets
13500-13999 >>> Other Current Assets
13600-13699 >>> Current tax assets
14000-14999 >>> Inventory
15000-19999 >>> Noncurrent
Order of liquidity**
15000-16999 Fixed Assets
Buildings
Machines
Land
16000-16999 Investments
17000-17999 Intangible Assets
18000-18999 Goodwill
19000-19999 Other Noncurrent Assets
19600-19699 >>> Noncurrent tax liabilities
20000-Series: Liability accounts
20000-25999 >>> Current
20000-20999 >>> AP to Vendors
21000-21999 >>> AP Payables to Other Parties
21100 >>> payables to CC companies
21200 >>> payables to Benefits Provider
21900 >>> Interco payables
22000-22999 >>> Short-term notes payable and Debt due in <12 months
23000-23999 >>> Accrued Payroll
24000-24999 >>> Deferred Revenue <12 months
25000-25999 >>> Accrued Taxes, Leases, Interest, Other
26000-29999 >>> Noncurrent
26000-26999 >>> Debt due in >12 months
27000-27999 >>> Deferred Revenue >12 months
29000-29999 >>> Other Noncurrent Liabilities
30000-series: Equity accounts
30000-30999 >>> Common stock and related accounts
31000-31999 >>> Preferred stock and related accounts
32000-32999 >>> SAFEs, hybrid equity instruments, and related accounts
33000-33999 >>> APIC.
34000-34999 >>> Retained earnings and related accounts
35000-35999 >>> Other equity
39000-39999 >>> Accumulated Other Comprehensive Income and related accounts
40000-series: Revenue accounts (operating revenue only)
40000-40999 >>> Subscription Revenue
41000-41999 >>> Services Revenue
42000-42999 >>> Transaction Revenue
43000-43999 >>> Usage Revenue
48000-48999 >>> Partnership Revenue
49000-49999 >>> Miscellaneous Revenue
50000-series: Cost of revenue accounts
50000-50999 >>> Cost of Materials
51000-51999 >>> Hosting Fees
52000-52999 >>> CoR Software used directly in delivery of product or services
53000-53999 >>> Payment Processor Fees
54000-54999 >>> Shipping Costs
55000-55999 >>> Allocated salaries and labor
56000-58999 >>> [UNDEFINED - possibly: overhead allocations, packaging, etc. - depends on industry]
59000-59999 >>> Other
60000-series: Standard operating expense accounts (standard purchases and disbursement categories)
60000-60999 >>> Payroll
61000-61999 >>> Other Employee Costs
62000-62999 >>> Travel
63000-63999 >>> Meals & Entertainment
64000-64999 >>> Professional Services
65000-65999 >>> Sales & Marketing
66000-66999 >>> Technology & Software
67000-67999 >>> Facilities
68000-68999 >>> General Operations
69000-69990 >>> [UNDEFINED - can be used by users for additional exp categories]
70000-series: Other operating expense accounts (non-cash expenses and miscellaneous operating expenses not directly related to expected ongoing operations)
70000-70999 >>> Depreciation
71000-71999 >>> Amortization of intangibles
72000-72999 >>> Amortization of goodwill
73000-75999 >>> [UNDEFINED]
76000-76999 >>> Bad debt expense (write offs and reserve)
77000-78999 >>> [UNDEFINED]
79000-79000 >>> Other & misc operating expense
8 = Non-Operating income accounts
80000-80999 >>> Non-Operating Income & Expenses
81000-82999 >>> [UNDEFINED - users can use for their specific income and expense types if desired]
83000-83999 >>> Credit Card Rewards
84000-85999 >>> [UNDEFINED]
86000-86999 >>> Taxes
87000-87999 >>> Interest Expense
88000-88999 >>> Interest and Dividend Income
89000-89999 >>> Other (misc)
9 = Uncategorized and P&L clearing (requires attention to resolve)
91000-91999 >>> Uncategorized Revenue
92000-92999 >>> Uncategorized Expense
93000-93999 >>> [UNDEFINED]
Ending conventions
005, 050, and 500 >>> Contra-account
For an account with multiple contra-accounts (e.g. refunds and discounts for revenue), add intervals of 10
9, 99, and 999 >>> Adjustment account
98 and 998, then 97, 997 should be used if there are multiple types of adjustment accounts
Note 1: The “5” ending conventions are appended starting with the first zero of the related account but not before the 2nd digit, and the “9” ending can start after the 1st digit (e.g. 42000 becomes 42500 or 42999, while 40000 becomes 40500 or 49999)
However, the number should not be greater than then next-highest account number to which the manual adjustment does not apply (e.g. if 40000 is subscription revenue and 41000 is services revenue, 40999 should be the manual adjustment account rather than 49999, even though the 2nd digit slot is available.)
Note 2: If the contra-account is not related to a specific account but is more of a general “catchall” contra-account (e.g. manual Journal Entries to adjust revenue that includes multiple revenue streams), these can go at the end of a grouping of accounts rather than after a specific account (e.g. 49999 for all revenue, rather than