We think you should use account numbers in your general ledger, but we think it’s more important that you’re consistent in either using them correctly or not using them at all.
To use account numbers, you need to enable that preference by visiting the Edit->Preferences menu and clicking on the Company Preferences tab of the Accounting submenu, which is shown below.
Once the account number preference is enabled, you’ll be able to manually assign account numbers to your general ledger accounts. QuickBooks won’t automatically assign them for you or insure that your numbers follow a consistent structure. It will insert the account number before the account name, and you’ll then be able to quickly locate accounts by typing the first few characters of an account name or the first few digits of the account number.
When assigning account numbers, use numbers that:
- have a consistent length
- have multiple unused integers between numbers to accommodate changes to your general ledger
- follow a consistent structure
New businesses or companies installing QuickBooks for the first time are more likely to make changes to their general ledgers, so it’s especially important for these firms to have the flexibility to add or change account numbers.
In older versions of QuickBooks, account numbers were a way to re-arrange the order of accounts rather than having an account list in alphabetical order based on the account description. Since you can now drag accounts in your chart of accounts list to rearrange the order, account numbers no longer serve that purpose. Account numbers are primarily a tool to organize account numbers outside of QuickBooks, such as in Excel, and to improve the readabilty of your account list.
Intuit recommends the following ranges for assigning account numbers:
10000 to 19999 Assets
20000 to 29999 Liabilities
30000 to 39999 Equity or Capital
40000 to 49999 Income or Revenue
50000 to 59999 Cost of Goods Sold, Job Costs, or Project Costs
60000 to 69999 Expenses or Overhead Costs
70000 to 79999 Other Income
80000 to 89999 Other Expenses
QuickBooks organizes accounts on reports based on the account type, not the account number. Whether you follow this structure or another one of your own choosing is up to you. Just keep in mind that account numbers are another tool to help organize information. If you use account numbers but don’t use them in a way that results in a better organized chart of accounts, you’re actually worse off.