Set up expense accounts

Expense accounts let you categorize transactions so you can track how your company spends money.

However, expense accounts are easier to use than income accounts. When you make purchases, you choose the expense account directly on the form.

After you assign all of your purchases to expense accounts, you can run a Profit and Loss report to see totals.

Think about how you want to organize your expense accounts. Many businesses choose to set up expense accounts that mirror the types of expenses they plan to claim when they file taxes. However, since expense accounts are so easy to assign and to add you may not want to add all your expense accounts now. (Remember that you can set up accounts as you enter transactions by clicking Add New in the Account field of a transaction).

To add an expense account:

1. Click the Gear icon > Chart of Accounts.
2. Click New.
3. Select Expenses from the Category Type dropdown and then fill in the rest of the fields.
4. Click Save.