> ## Documentation Index
> Fetch the complete documentation index at: https://docs.nyumbazetu.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Chart of accounts and service types

> The account tree every posting lands in, and the service types that connect billing to it.

**Finance → Accounting → Chart of Accounts → `/accounting-ledger/chart-of-accounts`**
**Finance → Accounting → Service Types → `/accounting-ledger/service-types`**

Two records decide where every shilling lands:

* an **account** is a line in your general ledger;
* a **service type** is a billable or payable thing, mapped to an account.

Get these right once and the ledger takes care of itself. Get them wrong and every report
downstream is wrong in the same way.

## Chart of accounts

The chart of accounts is your account tree. Each account carries:

| Field             | Purpose                                                                                      |
| ----------------- | -------------------------------------------------------------------------------------------- |
| **Account name**  | What it is called on statements.                                                             |
| **Account code**  | The stable identifier. Postings resolve accounts **by code**, so codes must not be recycled. |
| **Account type**  | Income, Expense, Asset, Liability, or Equity. Determines which statement it appears on.      |
| **Account class** | Sub-classification within the type, driving statement grouping.                              |
| **Balance**       | Current balance, and whether it is a debit or credit balance.                                |
| **Status**        | Active or inactive.                                                                          |

### Where each type appears

| Type      | Statement     | Normal balance |
| --------- | ------------- | -------------- |
| Income    | Profit & loss | Credit         |
| Expense   | Profit & loss | Debit          |
| Asset     | Balance sheet | Debit          |
| Liability | Balance sheet | Credit         |
| Equity    | Balance sheet | Credit         |

<Warning>
  Never delete or re-code an account that has postings. Postings resolve by code; changing a code
  orphans history. Deactivate instead — it disappears from selection lists and keeps its balance.
</Warning>

### Designing the chart

* **Keep it as small as it can be.** Every extra account is a decision someone has to make
  correctly, every time.
* **Split where you will act on the split.** Separate water from electricity if you manage them
  differently; do not separate "cleaning materials" from "cleaning supplies".
* **Use control accounts** for receivables and payables, with the detail in the subledger rather
  than in dozens of accounts.
* **Mirror the statements you have to produce.** If a landlord report needs gross rent separated
  from recoveries, the chart should already separate them.

## Service types

A service type is the catalogue entry for anything you bill or pay: rent, water, service charge,
garbage, parking, deposit, late fee, management commission.

| Field                    | Purpose                                                                                                  |
| ------------------------ | -------------------------------------------------------------------------------------------------------- |
| **Name**                 | What appears on invoice lines and reports.                                                               |
| **Item code / class**    | Identifiers used for mapping and integration.                                                            |
| **Account mapping**      | The income (or expense) account this service type posts to.                                              |
| **Tax treatment**        | The tax class applied, feeding eTIMS submission.                                                         |
| **Default amount**       | Pre-fills recurring charges, so a branch standard does not have to be retyped.                           |
| **Classification flags** | Whether the item is rent, a deposit, or another category — used by occupancy, deposit and arrears logic. |

<Note>
  Service types are the join between the operational world and the ledger. An invoice line references
  a service type; the service type names the account; the posting lands there. Without the mapping,
  the invoice cannot post.
</Note>

### Setting up a service type

<Steps>
  <Step title="Create the service type">
    Name it the way it should read on a tenant's invoice.
  </Step>

  <Step title="Map the account">
    Choose the income account for revenue items, the expense account for cost items. This is the
    step that is most often skipped and most expensive to fix later.
  </Step>

  <Step title="Set the tax class">
    The platform default is non-VAT; mark VAT-rated items explicitly. See
    [Tax & eTIMS](/guides/tax-and-etims).
  </Step>

  <Step title="Set the default amount">
    Where a branch-standard price exists. This makes outliers visible in recurring charges.
  </Step>

  <Step title="Set the classification">
    Rent and deposit flags matter — occupancy reporting and deposit balances read them.
  </Step>
</Steps>

### Service types every organisation needs

| Purpose                     | Why it must exist                                                              |
| --------------------------- | ------------------------------------------------------------------------------ |
| **Rent**                    | The core income line; occupancy and arrears logic classify on it.              |
| **Security deposit**        | Deposits must be a liability, separate from income.                            |
| **Utilities** (per utility) | IoT billing posts consumption against them.                                    |
| **Service charge**          | Usually recoverable and reported separately to owners.                         |
| **Late fee / penalty**      | The [penalties engine](/guides/collections/penalties) cannot post without one. |
| **Management commission**   | Owner statements charge against it.                                            |

## Provider integrations and sync

Service types can be synchronised with external providers, with a **last synced** indicator and a
mappings surface for reviewing and retrying failures. See
[Tax & eTIMS](/guides/tax-and-etims) for the KRA item catalogue side of this.

## Checks worth running

<Steps>
  <Step title="Every service type has an account">
    An unmapped service type produces invoices that never post.
  </Step>

  <Step title="No two service types map to the same account for different purposes">
    If rent and service charge both post to "Rental income", you cannot report them separately.
  </Step>

  <Step title="Deposits do not post to income">
    A deposit in an income account overstates revenue and understates liabilities.
  </Step>

  <Step title="Inactive accounts have no active service types pointing at them">
    Postings will fail silently at the worst possible time — during a billing run.
  </Step>
</Steps>

## Next steps

<Columns cols={2}>
  <Card title="Accounting periods" icon="calendar-check" href="/guides/accounting-periods">
    Control when postings may land.
  </Card>

  <Card title="Financial statements" icon="chart-column" href="/guides/financial-statements">
    What the chart produces.
  </Card>
</Columns>