A good chart of accounts makes your reports meaningful and your accountant's job quick. A messy one (fifty expense categories, "miscellaneous" everywhere) makes both useless. Here's a lean template for Nigerian service companies.
What is a chart of accounts?
A chart of accounts (COA) is the structured list of accounts your transactions are recorded in. Every sale, expense, payment and tax lands in one of them, and your profit and loss and balance sheet are built from them.
Accounts are usually numbered by type:
| Range | Type |
|---|---|
| 1000–1999 | Assets |
| 2000–2999 | Liabilities |
| 3000–3999 | Equity |
| 4000–4999 | Income |
| 5000–5999 | Cost of sales |
| 6000–6999 | Operating expenses |
Template: service company
Assets
| Code | Account |
|---|---|
| 1010 | Bank: main current account |
| 1020 | Bank: tax reserve account |
| 1030 | Paystack / Flutterwave balance |
| 1100 | Accounts receivable (clients) |
| 1150 | WHT receivable (credit notes) |
| 1160 | Input VAT recoverable |
| 1500 | Equipment and laptops |
| 1590 | Accumulated depreciation |
Liabilities
| Code | Account |
|---|---|
| 2010 | Accounts payable (suppliers) |
| 2100 | Output VAT payable |
| 2110 | PAYE payable |
| 2120 | Pension payable (employee + employer) |
| 2130 | WHT payable (deducted from suppliers) |
| 2140 | NHF / NSITF / ITF payable |
| 2200 | Client deposits received |
| 2300 | Company income tax and development levy payable |
| 2500 | Loans |
Equity
| Code | Account |
|---|---|
| 3010 | Share capital |
| 3100 | Retained earnings |
Income
| Code | Account |
|---|---|
| 4010 | Retainer fees |
| 4020 | Project fees |
| 4030 | Reimbursable income (media, production) |
Cost of sales
| Code | Account |
|---|---|
| 5010 | Contractors and freelancers |
| 5020 | Media and production costs |
| 5030 | Project-specific software and licences |
Operating expenses
| Code | Account |
|---|---|
| 6010 | Salaries and wages |
| 6020 | Employer pension |
| 6030 | NSITF, ITF and other staff levies |
| 6100 | Office rent |
| 6110 | Diesel and power |
| 6120 | Internet and phone |
| 6130 | Software and subscriptions |
| 6200 | Marketing and advertising |
| 6300 | Professional fees (audit, legal) |
| 6400 | Travel and transport |
| 6500 | Bank charges |
| 6600 | Training |
| 6700 | Insurance |
| 6800 | Depreciation |
Tips for keeping it useful
- Fewer, clearer accounts. 20–30 expense accounts is plenty for most SMEs.
- Separate tax liabilities. VAT, PAYE, pension and WHT each get their own account, so you always know what you owe.
- Track WHT receivable as an asset, since it's a tax credit you're owed.
- Split cost of sales from overheads so you can see gross margin.
- Avoid "Miscellaneous". If something recurs, give it an account.
How BizBooks organises this
BizBooks uses simple expense categories (such as contractors and freelancers, software and subscriptions, office rent, diesel and power, salaries and wages) and tracks VAT, PAYE, pension and WHT separately for its tax calendar and reports. Your accountant can map the CSV export to a full chart of accounts in minutes. A full double-entry ledger is on our roadmap. See bookkeeping and reports.
Frequently asked questions
What is a chart of accounts?
The organised list of accounts (assets, liabilities, equity, income and expenses) that a business records its transactions in.
How many accounts should a small business have?
Enough to answer your key questions, usually 50–80 in total, with 20–30 expense accounts for a typical service company.
Where do VAT and PAYE go in the chart of accounts?
As liabilities: separate accounts for output VAT payable, PAYE payable, pension payable and WHT payable.
Is WHT deducted by clients an asset?
Yes. WHT deducted from your income is a tax credit, recorded as WHT receivable until you use it against your tax.