What Every Startup Needs to Know About Chart of Accounts

Your chart of accounts (COA) is the blueprint of your bookkeeping system. It organizes how you track income, expenses, assets, and liabilities—so you can make sense of your finances from day one.

Here’s how Canadian startups and Indigenous entrepreneurs can build a chart of accounts that actually helps you grow.

What Is a Chart of Accounts?

A chart of accounts is a categorized list of everything your business tracks financially. It includes:

• Assets – e.g. bank accounts, inventory, equipment

• Liabilities – e.g. credit cards, loans, taxes payable

• Equity – e.g. owner investment, retained earnings

• Revenue – e.g. sales, grants, consulting

• Expenses – e.g. marketing, payroll, travel

Each entry is a bucket where your transactions go—so reports are accurate and useful.

Why Startups Should Get This Right Early

Startups grow fast. Without a clean COA, you risk:

• Confusing or inaccurate reports

• Trouble filing taxes or applying for funding

• Time-consuming cleanups later

A solid chart of accounts lets you track performance clearly and adjust quickly as you scale.

Best Practices for Setting Up Your COA

• Use accounting software like QuickBooks Online to manage your COA

• Start with core categories, and add detail only where needed

• Group expenses in a way that reflects your business model

• Use sub-accounts for specific tracking (e.g. “Travel – Conferences”)

• Avoid vague accounts like “Miscellaneous” or “General”

Don’t be afraid to rename accounts to fit your business’s language and goals.

Indigenous Business Tip

If you run a band-owned startup or community initiative, structure your COA to reflect:

• Programs or funding streams

• Restricted vs. unrestricted funding

• Reporting needs under acts like the TH Financial Administration Act

This supports clear reporting and long-term sustainability.