Understanding the Chart of Accounts
The chart of accounts is the complete list of every financial account your church uses to categorize transactions. Think of it as the filing system for your money — every dollar that comes in or goes out gets filed into a specific account. This guide explains how accounts work in Wired Church, how to create and organize them, and how they connect to the rest of the finance module.
What Is a Chart of Accounts?
Every financial transaction in double-entry accounting touches at least two accounts. When a member gives $100:
- The Checking Account (an asset) increases by $100 (debit).
- The Contribution Revenue account (revenue) increases by $100 (credit).
The chart of accounts is the master list of all these accounts. Without it, there is no structure — just a pile of numbers.
Churches need a chart of accounts for the same reasons any organization does: to track where money comes from, where it goes, what you own, and what you owe. But churches also need fund-level tracking, which Wired Church handles by linking accounts to funds and tagging every journal entry line with a fund.
Navigating to the Chart of Accounts
- From the admin sidebar, click Finance.
- Click Accounts (or navigate to Finance > Setup > Chart of Accounts).
The page displays all accounts grouped by type, with columns for account number, name, type, subtype, fund, and status.
Account Types
Every account belongs to one of five types. These are fundamental to accounting and cannot be changed or extended.
Assets (Normal Balance: Debit)
What your church owns or is owed: bank accounts, receivables, prepaid expenses, buildings, vehicles, equipment.
Subtypes: Cash and Bank, Accounts Receivable, Other Current Asset, Fixed Asset, Other Asset.
Liabilities (Normal Balance: Credit)
What your church owes to others: unpaid bills, credit card balances, loans, mortgages.
Subtypes: Accounts Payable, Credit Card, Other Current Liability, Long-Term Liability.
Net Assets / Fund Balance (Normal Balance: Credit)
The equity of your church — what remains after subtracting liabilities from assets. In nonprofit accounting, this is called "net assets."
Subtypes: Net Assets Unrestricted, Net Assets Restricted, Retained Earnings.
Revenue (Normal Balance: Credit)
Money coming in: tithes, offerings, designated gifts, facility rentals, interest income.
Subtypes: Tithes and Offerings, Designated Giving, Other Income.
Expenses (Normal Balance: Debit)
Money going out: salaries, utilities, ministry supplies, missions support, office costs.
Subtypes: Personnel, Facilities, Ministry Expense, Missions, Administrative, Other Expense.
Account Numbering Convention
Wired Church uses a standard numbering scheme that groups accounts by type. You are free to customize these, but the default convention is:
| Range | Account Type | Example Accounts |
|---|---|---|
| 1000 - 1999 | Assets | 1000 Checking, 1010 Savings, 1500 Building |
| 2000 - 2999 | Liabilities | 2000 Accounts Payable, 2100 Credit Card, 2500 Mortgage |
| 3000 - 3999 | Net Assets (Fund Balance) | 3000 Unrestricted Net Assets, 3100 Restricted Net Assets |
| 4000 - 4999 | Revenue | 4000 Tithes & Offerings, 4100 Missions Giving, 4500 Facility Rental |
| 5000 - 5999 | Expenses | 5000 Pastor Salary, 5100 Utilities, 5200 Curriculum |
Leave gaps between account numbers. If your first checking account is 1000, make savings 1010 and petty cash 1020. This gives you room to add accounts between them later without renumbering everything.
Default Accounts for New Churches
When your church first sets up the finance module, Wired Church creates a starter chart of accounts. These defaults cover the most common needs:
| # | Account | Type |
|---|---|---|
| 1000 | Checking Account | Cash and Bank |
| 1010 | Savings Account | Cash and Bank |
| 1100 | Accounts Receivable | Accounts Receivable |
| 1500 | Building | Fixed Asset |
| 2000 | Accounts Payable | Accounts Payable |
| 2100 | Church Credit Card | Credit Card |
| 2500 | Mortgage Payable | Long-Term Liability |
| 3000 | Unrestricted Net Assets | Net Assets Unrestricted |
| 3100 | Temporarily Restricted Net Assets | Net Assets Restricted |
| 4000 | Tithes and Offerings | Tithes and Offerings |
| 4100 | Missions Giving | Designated Giving |
| 4200 | Building Fund Giving | Designated Giving |
| 5000 | Pastor Salary | Personnel |
| 5010 | Staff Wages | Personnel |
| 5100 | Utilities | Facilities |
| 5200 | Curriculum & Supplies | Ministry Expense |
| 5300 | Missionary Support | Missions |
| 5400 | Office Supplies | Administrative |
| 5420 | Bank & Processing Fees | Administrative |
These are starting points. Rename, add, or deactivate accounts as your church's needs dictate.
Creating a New Account
- On the Chart of Accounts page, click New Account.
- Fill in the following fields.
| Field | Required | Description |
|---|---|---|
| Account Number | Recommended | A numeric code following the numbering convention. Not strictly required, but strongly recommended for report ordering. |
| Account Name | Yes | Descriptive name. Be specific — "Youth Supplies" is better than "Supplies." |
| Account Type | Yes | Asset, Liability, Net Assets, Revenue, or Expense. |
| Account Subtype | Yes | Further classification within the type. Determines where the account appears on reports. |
| Fund | No | Optionally link this account to a specific fund. Leave blank for cross-fund accounts. |
| Description | No | Internal notes about what this account is for. |
| Normal Balance | Auto-set | Debit for Assets and Expenses, Credit for Liabilities, Net Assets, and Revenue. Set automatically based on account type. |
| Parent Account | No | Select a parent to create a sub-account hierarchy. |
| Campus | No | If multi-campus, assign the account to a specific location. |
| Functional Category | No | For the Statement of Functional Expenses — classify as Program, Management & General, or Fundraising. |
- Click Save.
- The account immediately appears in the chart of accounts and is available in all dropdowns (journal entries, bank feed categorization, budget lines, etc.).
Sub-Accounts for Detailed Tracking
Sub-accounts let you break down a parent account into finer categories while still rolling up to the parent on summary reports.
For example, account 5100 Utilities can have sub-accounts 5101 Electricity, 5102 Water & Sewer, and 5103 Natural Gas. On summary reports you see the parent total; on detail reports you see the breakdown.
To create a sub-account, click New Account, fill in the details, and select the parent in the Parent Account dropdown. Sub-accounts must share the same account type as their parent.
Active vs. Inactive Accounts
- Active accounts appear in all dropdowns and accept new transactions.
- Inactive accounts are hidden from dropdowns and cannot receive new journal entry lines. Historical transactions remain untouched.
To deactivate an account:
- Click the account in the chart of accounts list.
- Click Edit.
- Uncheck the Active toggle.
- Click Save.
Do not delete accounts that have transactions. Deleting an account with journal entry lines would break your financial records. Always deactivate instead. Wired Church prevents deletion of accounts with existing transactions.
How Accounts Connect to Everything
The chart of accounts is the central nervous system of the finance module. Here is how accounts relate to other features:
- Contributions: When a batch is posted, journal entries are auto-generated — debit the bank asset account, credit the revenue account, tagged with the matching fund.
- Bank Feeds: Imported transactions (CSV, OFX, or Plaid) get categorized to an expense or revenue account, creating journal entries automatically.
- Checks: Writing a check debits an expense account and credits the bank asset account.
- Budgets: Budget lines are set per account and per fund. The Budget vs. Actual report compares budgeted amounts against actual journal activity.
- Reconciliation: Bank reconciliation matches statement transactions against journal entries posted to the bank's linked asset account.
- Reimbursements: Approved reimbursements debit the expense account and credit the bank account.
The Relationship Between Funds and Accounts
This is one of the most important concepts in church fund accounting.
Cross-fund accounts can hold transactions for any fund. Your checking account is the best example — all funds' money sits in the same bank account, with fund tracking on the journal entry lines.
Fund-specific accounts are linked to a single fund. For example, 4100 Missions Giving is linked to the Missions fund. Journal entry lines using that account default to that fund.
When you run a report filtered to a single fund, Wired Church filters by the fund_id on each journal entry line. A single checking account can show different balances per fund, and the Fund Balance Summary aggregates all lines by fund regardless of account.
Key insight: Accounts organize transactions by category (what type of money). Funds organize transactions by purpose (whose money). Together, they give you a complete picture.
Interfund Transfer Accounts
When you create fund transfers, the system uses special accounts for the journal entries:
- Interfund Transfer Out — An equity-type account debited when money leaves a fund.
- Interfund Transfer In — An equity-type account credited when money enters a fund.
These are system accounts created automatically. They always net to zero on a consolidated report because every transfer out from one fund equals a transfer in to another.
Do not create manual journal entries against these accounts. Use the Transfers page instead, which handles the paired entries automatically.
Tips for Managing Your Chart of Accounts
- Keep it simple. A small church does not need 200 accounts. Start with the defaults and add only when you need more detail.
- Use consistent naming. Pick a convention ("Pastor Salary" vs. "Salary - Pastor") and apply it uniformly.
- Review annually. Deactivate accounts with zero activity. Add sub-accounts for categories that have grown.
- Never delete accounts with history. Deactivate them instead to preserve tax and audit records.
- Assign functional categories to expense accounts if you file IRS Form 990 or produce a Statement of Functional Expenses.
- Use account numbers for ordering. Keeping related accounts in numeric sequence makes reports easier to read.
Common Questions
Can I change an account's type after creating it? No. Account type (Asset, Liability, etc.) is fundamental and cannot be changed after creation. If you chose the wrong type, create a new account with the correct type, move any transactions via journal entries, and deactivate the old account.
Can I renumber an account? Yes. Edit the account and change the account number. This updates the number everywhere going forward. Historical reports regenerate with the new number.
What is "normal balance"? Normal balance indicates which side of the ledger increases the account. Assets and Expenses have a normal debit balance (debits increase them). Liabilities, Net Assets, and Revenue have a normal credit balance (credits increase them). Wired Church sets this automatically.
How many accounts should my church have? There is no magic number, but most churches with under 200 members do well with 30 to 60 accounts. Larger churches with multiple programs may need 80 to 150. If you have more accounts than transactions, you have too many.
What if I need an account that does not fit any subtype? Use "Other Asset," "Other Current Liability," "Other Income," or "Other Expense" as catch-all subtypes. You can always reclassify later by creating a more specific account and moving transactions.
Related Articles
- Setting Up Funds — Create funds that accounts can be linked to
- Fund Transfers — How interfund transfer accounts work
- Financial Reports by Fund — See your chart of accounts in action on reports