When you have similar accounts listed alphabetically, it is confusing and makes it more likely that transactions will be applied to the wrong account. Your reports are also less meaningful, because it is difficult to grasp how much is spent on a common category.

There are four accounts in the example below that can be grouped together as subaccounts. The are: Disability Insurance, Life Insurance, Medical Insurance, and Profit Sharing. They all have a common theme, which is 'Employee Benefits'.

Procedure:

1) Open your Chart of Accounts.

2) Identify which accounts can be grouped together with a common theme.

3) Give the common theme a name and create a new parent account with that name e.g. Employee Benefits.

4) Select the account you want to group with the parent account by clicking the mouse on the diamond to the left of that account, so that it becomes a cross arrow.

5) Hold the mouse button and drag the account to position it beneath the parent account, then release the mouse button.

6) To make the account a subaccount, click on the diamond again and drag it a quarter of an inch to the right. Then release the mouse button.

7) Repeat the process with the next account that you want to group as a subaccount under the newly-created parent account.

8) If you are using an existing account for the "parent" account, make sure that there are no transactions in it, because if there are, they will appear on your Profit and Loss report under the Account as "Other". Those transactions should be reapplied to a new subaccount.

9) The image below shows what your rearranged accounts would look like. The result of grouping subaccounts with a common theme is that your reports will be more meaningful, and your data entry will be easier.

Tip 1

If you have parent accounts with subaccounts, always apply transactions to the subaccount, never to the parent account. If there is no subaccount that matches the transaction, make one or put the transaction in the most appropriate existing subaccount.

Tip 2

Anytime you change a transaction when a report is open, the report is recreated. This slows down the process. Close reports you are not currently working with to prevent delays.