We need a chart of accounts (COA) to establish a well-structured financial system. It lists a company’s accounts systematically in its general ledger. These are again categorized as assets, liabilities, equity, revenue, and expenses, which make it easier to make informed financial decisions.
Now, in 2025, most businesses are implementing a chart of accounts software like Financfy to manage their accounts. It’s in fact an easy and smart solution. Businesses can have error-free financial reports and easily scale.
What is a Chart of Accounts?
The Chart of Accounts (COA) is a structured document that an organization uses in its financial system. You will find here all the lists of financial accounts in the general ledger, classified as different categories. These are assets, liabilities, equity, revenue, and expenses. The main purpose of COA is to consolidate all these categories in one place. Hence, you can easily record and update transactions.
Structure of Chart of Accounts
Generally, charts of accounts can fall into different groups of financial statements, accounting codes, categories, and subcategories. Let’s clarify it with a simple structure.
| Financial Statement | Account Code | Category | Sub-Category / Examples |
|---|---|---|---|
| Balance Sheet | 1000–1999 | Assets | Cash, Bank Accounts, Accounts Receivable, Inventory, Fixed Assets |
| 2000–2999 | Liabilities | Accounts Payable, Loans, Accrued Expenses, Taxes Payable | |
| 3000–3999 | Equity | Owner’s Capital, Retained Earnings, Shareholder Equity | |
| Income Statement | 4000–4999 | Revenue | Product Sales, Service Income, Interest Income |
| 5000–5999 | Cost of Goods Sold (COGS) | Raw Materials, Production Labor, Freight-in | |
| 6000–6999 | Operating Expenses | Rent, Salaries, Utilities, Marketing, Insurance | |
| 7000–7999 | Non-Operating Income/Expenses | Interest Expense, Gains/Losses, Depreciation |
Standard Chart of Accounts in Bangladesh
In Bangladesh, businesses use a numeric code structure and account naming conventions in chart of accounts. These are usually suitable for Bangladesh Accounting Standards (BAS), Bangladesh Financial Reporting Standards (BFRS), and National Board of Revenue (NBR).
The common accounts used in Bangladesh are assets, liabilities, equity, revenue, and expenses. But if we get more specific, there can be different terms. Like the chart of accounts in the manufacturing industry can have raw materials inventory, work in progress, finished goods, factory overheads, COGS, etc. Then, in retail, there can be merchandise inventory, POS sales, discount allowed, delivery cost, etc. For service, there are professional fees, consulting revenue, client travel expenses, sub contractor cost, etc.
Here’s an example of standard account codes that are commonly used in Bangladesh.
Chart of Accounts Template for Small Business in Bangladesh
Here’s a overview of standard chart of accounts template that most businesses use.
| Account Code | Account Name | Type | Description/Use |
|---|---|---|---|
| 1000 | Cash | Asset | Physical cash in hand |
| 1010 | Bank account | Asset | Current account balance |
| 1020 | Accounts receivable | Asset | Money owed by customers |
| 1030 | Inventory | Asset | Stock of goods/materials |
| 1040 | Prepaid expenses | Asset | Advance payments made |
| 2000 | Accounts payable | Liability | Amount owed to suppliers |
| 2010 | VAT payable | Liability | Collected VAT to be remitted |
| 2020 | Income tax payable | Liability | Tax due to NBR |
| 3000 | Owner's capital | Equity | Owner's investment |
| 3010 | Retained earnings | Equity | Accumulated profits |
| 4000 | Sales revenue | Income | Income from sales |
| 4010 | Other income | Income | Non-core income |
| 5000 | Cost of goods sold | Expense | Direct cost of sales |
| 5010 | Direct labor | Expense | Wages of production staff |
| 6000 | Rent expense | Expense | Office/factory rent |
| 6010 | Utilities expense | Expense | Electricity, water, gas |
| 6020 | Marketing expense | Expense | Advertising and promotion |
| 6030 | Administrative expense | Expense | Office admin cost |
Here’s also a sector specific chart of accounts template, i.e. for the SME sector.
Legal and Regulatory Compliance
As per the compliance of VAT in Bangladesh, the VAT accounts should separately track VAT on sales, VAT on purchases, and VAT payable. Also, the standard rate of VAT should be 15%, but with some exemptions.
Then, we have income tax compliance. We must ensure that the expenses are categorized properly so that we can make valid deductions. If there are any withholding liabilities, must record them in specific payable accounts, like 2040 – WHT payable. The chart of accounts should have audit readiness too. For example, we can maintain the audit trails with account codes and transaction logs.
As per National Board of Revenue (NBR), we have to use recommended account heads for VAT filing. These should comply with Value Added Tax and Supplementary Duty Act, 2012 and Income Tax Ordinance, 1984. Lastly, the chart of accounts in Bangladesh should integrate with BAS 1 (Presentation of Financial Statement) and BFRS. It’s highly needed for SMEs since they require consistent classification in their reporting records.
What is Chart of Accounts Software?
Chart of Accounts software is basically a digital solution, used as an organizational tool. It lists all the names of the company’s accounts in the general ledger through accounting software. If needed, the COA also puts a short description on the accounts with a unique identification code number. By using this software, you don’t have to manage your ledger manually and yet get up-to-date reports.
So far, we keep our financial records using green ledger paper and a pencil. But now, COA software has made it easy for us. We can set up everything faster by simply using templates. Also, we get that data validation since COA software makes everything error-free. Most importantly, it integrates with other business management software for structured accounting. Small- to medium-sized enterprises, start-up scaling operations, and accounting professionals can get great help from COA software.
Which is the Best Chart of Accounts Software in 2025
In 2025, businesses are mostly relying on automated chart of accounts tool so that they can access accounting features easily. In that case, Financfy is the best chart of accounts software with cloud-based features. There are also more features to look for in a COA tool, just like Financfy has.
Financfy Features:
Smart Account Structuring
- Simplify your financial tracking with a clear, categorized system of accounts.
- Financfy lets you create and manage a flexible Chart of Accounts tailored to your business from core groups like assets and liabilities to detailed income and expense sub-accounts.
Custom Journal Input
- Handle unique financial scenarios with custom journal entries.
- it’s adjusting balances, recording internal transfers, or logging non-standard transactions,
- Financfy gives you full control to manually credit and debit accounts with precision perfect for advanced bookkeeping needs.
Automated Journal Rules
- Save time and reduce manual effort with smart Journal rules.
- Financfy automatically generates the corresponding journal entry ensuring accurate books with minimal input.
Period Lock for Accurate Books
- As audit season approaches, lock financial periods to prevent accidental or unauthorized edits.
- Financfy ensures your reports remain accurate and tamper-proof during tax reviews or year-end closing.
- Financfy provides an existing list of chart of accounts for individual accounting head
- Financfy gives the ability to create custom chart of accounts
- Real-time analytics and reports that allow access to income statements and balance sheets in a click.
- Cloud-based backup and have a secured data backup.
- Affordable plans, so that the small and growing businesses can use COA.
How to Set Up Your Chart of Accounts in Financfy: Step-by-Step Guide?
Financfy already provides necessary COA, but we can create custom COA if we want and these are the steps to follow to create one:
- Log in
- Click chart of accounts menu
- Add new chart of accounts
- Selecting the accounting head
- Naming new accounting head
- Adding opening balance
- Save the form
That’s it, this is how you can create a chart of accounts in Financfy there is also functionality to delete and edit chart of accounts.
Why Use Chart of Accounts Software Instead of Manual Spreadsheets?
Apart from accuracy, chart of accounts software offers easy management of our accounts, removes the pressure of manual data entry, and so on. Here are more reasons why we should use software instead of doing it on manual spreadsheets.
- Scalability: Our manual spreadsheets can’t handle growth. But a growing business will have new accounts. And a COA software easily allows adding new accounts and won’t mess up with present records.
- Error reduction: Chart of accounts software usually has automated data entry and validation features. That’s why there is less chance of human errors.
- Ease of adding new COA: New COA under individual accounting head can be created and tracked easily.
- Real-time insights: COA software usually has real-time insights. This generates financial reports in seconds.
- Audit Readiness: With a structured system, COA software makes faster audits. Also, they provide historical data that are easily accessible.
Who Should Use a Chart of Accounts Software?
Not only accountants, but anyone who needs clarity in their financial accounts should use charts of accounts, especially in software. Thus, you get seamless and effortless operations also.
- Startups: They can use a chart of accounts software to track their daily transactions to scale their business properly.
- SMEs: For control, scalability, filing taxes, accurate financial reporting, and compliance, SMEs should rely on COA software. It’s also a cost-effective solution for them.
- Accountants and Bookkeepers: They can use it to reduce their manual workload and any chance of errors in accounting processes.
- NGOs or Non-profits: They need accurate financial tracking, as they have to provide meaningful information to management, external parties, boards, etc. In that case, nothing can be better than accounting software to structure the chart of accounts.
What are the Features to Look for in a Chart of Accounts Software?
While selecting a perfect software to manage your chart of accounts, make sure it has the following features.
- Customizable account structures
- Multi-level hierarchy support
- Specific chart of accounts assignment for different types of transactions
- User roles and permissions on manipulating chart of accounts
- Ease of creating and managing
What are the Differences Between Financfy vs Other Chart of Accounts Tools ?
Here is a quick comparison on why Financfy is the best software for managing charts of accounts compared to other accounting tools.
| Software name | Custom COA | Easy UI | Price for SMEs | Translation Integrations | Support |
|---|---|---|---|---|---|
| Financfy | yes | yes | BDT 1800 to 10,800 per month | yes | 24/7 |
| QuickBooks | yes | yes | $20 to $275 per month | yes | Limited |
| Xero | yes | yes | £16 to £59 per month | yes | Email-only |
| Zoho Books | yes | No | $15 to $240 per month | yes | Chat |
Final Thoughts
For a good accounting system, we need a chart of accounts. Now, the world has risen to cloud accounting and automation. Accounting software, like Financfy, is doing the job for us. We just need to sign up, open an account, manage the account, and input the company’s transaction details, and that’s it. You will even find the categories and subcategories where your transaction belongs. Afterwards, the software will generate a balance sheet or financial statement whenever you need it. Just make sure not to complicate the account names and always update the software.
FAQs
1. What is the best chart of accounts software in Bangladesh?
In 2025, Financfy is the best chart of accounts software. With its automation, templates, and real-time analytics features, it is easy for accountants to use.
2. Can I customize my chart of accounts in accounting software?
Yes, with accounting software like Financfy, you can add, delete, and modify your accounts. It’s going to be useful when you have to make a unique business model.
3. Is chart of accounts the same as general ledger?
Chart of accounts are not exactly the same as a general ledger. The general ledger is the actual record of all transactions. Meanwhile, a chart of accounts is the listing or structure of the financial system.
4. What software helps to manage a chart of accounts?
Besides Financfy, QuickBooks, Xero, and Zoho Books can help manage a chart of accounts.
