Maintain chart of accounts

After the setup of a company we are required to maintain our chart of accounts. After opening peachtree software we have to click “maintain” from the upper menu and then select “chart of accounts” to establish chart of accounts.

After selecting chart of accounts the following window will appear.

In this window we have to input data of 3 things, account ID, description, and account type.

Account ID.

Account id is the kind of reference number which we give to our accounts. We had to input the account ID quite carefully because it will help us to find our accounts easily. We will number them like all the assets might start from the same number like we give 105 account id to cash and 142 to building both are staring with 1. Then for liabilities we should start from the different number which might be 2 and so on.

Description.

In description we will type the name of the accounts for example: cash, petty cash, a/c payables etc.

Account type.

We had to select the account type from the given options and we have to select it very carefully. Because due to account type we can group all the same kinds of accounts. For example we select the account type “fixed assets” for land, building, leasehold improvements, furniture etc and in this we have grouped it to “fixed assets”.

There are 6 options given in the above window.

Over here “delete” means to delete any of the available account. To delete any existing account we will first click the magnifier or the search icon to open all the existing accounts. The following window will appear after clicking magnifier.

Now we will double click any of the account like I had double clicked “petty cash”. After double clicking it we will click the “delete” icon from the menu. The following window will appear.

From this window we will basically do the confirmation of deletion of account by clicking “yes” otherwise click “no”.

Now I will explain about the “change id” icon given on the menu. After clicking change id the following window will appear.

With the help of change id icon we can simply change the id of accounts which we had given to our accounts like in the above window 109 was the current account id now we will input new account id if we had to change it in any circumstances. Then we will click ok.

Now for doing any account “inactive”.

We will select the “inactive” from the below window to inactive any of the existing account but before it we have to select any existing account by the help of magnifier and after that by selecting “inactive” option we can inactive any of the account.

We inactive any account when we know that no further no more transactions will be associated with it. 

this was all the basic and important information about how to maintain chart of accounts.
after maintaining chart of accounts we will click close on the menu.

How to input beginning balances.

After maintaining  chart of accounts we have to enter the amounts of beginning balances. For this we have to click on short arrow given beside “beginning balances” shown in the following picture:

After clicking on this arrow the following window will appear:

Note:

Firstly we should know that before clicking “beginning balance” the account of “retained earnings” should be there otherwise the software will not save balances and we have to restart doing work from first step.

While we can create any new account in this also except the account of “retained earnings”.

From here we will select the time period of our beginning balances. This time period is selected according to the occurrence of our balances or when these accounts were closed. Fro example if the trial balance is on 31^st dec 2013 this means that the entries were closed on 31^st dec 2013 so we will select the slot from 12/1/13 through 12/31/2013.

After clicking on the desired time period the following window will appear.

In this window account ID, account description and account type columns will be shown which we had entered while maintaining chart of accounts. While the data of column “assets, expenses and liabilities,equity,income” we had to enter. Like shown in the picture the data is eneterd. And in case we had entered wrong data or our data is not balance the new account will be created automatically with the name of “beg bal equity” and in this account the difference will be posted.  

We can also enter new account over here by clicking on the “new” icon in the above window.

After entering the data we will click on “OK” icon and the above window will be closed automatically.

setup of a new company in peachtree

Setup of a company

Firstly we will select peachtree from the start menu to open peachtree software and to setup a new company.

After opening peachtree software the following window will appear:

In the above window there are 6 options given in a peachtree software and as we are going to build a setup of a new company therefore we will select “set up of a new company” from the 6 options given.by selecting this option our setup will start for a new company and we can proceed further.

After selecting “setup of a new company” from the first window which shows the following window appears:

This window is basically showing us 5 points about the introduction of the company like what is the name of the company, address of the company, the chart of accounts which we will be using, the accounting method which we have to select whether it is accrual base accounting system or cash base accounting system, we will select the posting method and the last point is that we have to mention our accounting periods also which is normally of one year. After reading and understanding these points we will click on the next button.

After clicking on the next button from the “introduction” window the following window will appear whose name is “company introduction”.

In the previous window it was just showing us the points which we needed to understand for creating a setup of a company. While this window is mainly showing us the page kind of “form” in which we have to input a required data of our company which we are going to build.

In the first bar we will put the name of our company.eg 0009, Rehman and Sons etc..

 In the second and third bar given we have to input the addresses of our company eg: Eg DHA phase 1, H-block etc.

In the bar of “city, state, zip” we will input the city and zip or postal code of our company and we have to select out state. Eg city= Lahore, postal = 58740 etc

Then in the next bar we will input the country where our company is situated eg Pakistan.

In the bar of “fax” we will simply input our faxnumber.

Then from the given options in the bar of “business type” we have to select what is our company’s business. Which is shown in the following figure.

Then we have to input our website and email address.

After providing basic information of our company then we will click on the next button and the following window will appear:

The window of “chart of accounts” will appear.

In this window firstly the main thing is that we can select only 1 option 5 options given. We will select any one option according to our requirement. If we select the first option it means that we are going to setup a new company of any kind and the simplified or basic type of accounts will be used in it. We can modify the charts later if we want.

If we select the second option it means that we are going to create a company and we will be using the detailed form of accounts from any one of many sample companies.

If we select the third option it means we will use same chart of accounts which we select from any existing company which is already in the peachtree software.

the forth option tells that if we select it we will be converting  a company from another accounting system.

The last option is this that if we select it, it means that we will using our own chart of accounts for our company.

Now we will click the next button by selecting the required option. I have selected the 1^st option and the following window will appear.

The window of “chart of accounts” will appear and in this window we will select the option of the kind of business we are going to build because after that it will use the same type of accounts according to that business. After selecting we will click on the next and I have selected “retail company”.

The following window of selecting the “accounting method” will appear.

We will select any one of the accounting method i.e, accrual or cash base accounting method. Normally accrual base accounting method is used and it is more reliable. I also selected the accrual base accounting method and after selecting click on the next button.

The following window of “posting method” will appear.

From this window we will select any one from “real time or batch”, while “real time” is more preferable and most companies use the real time method. After selecting we will click on the next button and I have selected “ real time”.

The following window of “accounting period” will appear after clicking next.

Here we are provided by two options and we will select according to our requirement while I am selecting the option of 12 months because it is normally used and it can be changed according to the type of business.

Then we have to click on next. And the following window will appear.

In this window of “accounting periods” we will select the fiscal year, first month of entering data and the year of first payroll. We have to select this thing also very carefully because if we select the month of entering data for example june and after that we cannot enter data before or after june.

I have selected January as my fiscal year, march as my entering data and 2013 as my first payroll entering period. After this we will click on the next button to proceed further.

The following window of “defaults” will appear

Here is the list of all the defaults of payment terms and credit limit etc. after it we will click on the next button and the following window will appear.

This window of “finish” will appear which means that we have successfully created a new company and entered all the basic required data for peachtree setup.

thank you for reading :)