A Founder's Guide to the Startup Chart of Accounts

A well-structured Chart of Accounts (COA) is the backbone of your startup's financial system. It’s more than just a list of categories; it’s a framework that tells the story of your business. This guide provides a clean, accrual-ready COA you can drop directly into a Beancount ledger. It’s designed to be modular, allowing you to start lean and add complexity only as you grow.

Disclaimer: This is general information, not legal, tax, or accounting advice. Consult with a professional to ensure your COA meets your specific compliance and reporting needs.

Core Principles for a Scalable COA 🧾​

Before diving into the accounts themselves, it's crucial to understand the principles that make a COA effective for a high-growth startup.

• Accrual First: Build your COA for accrual-basis accounting from day one. This means using accounts like Accounts Receivable (AR), Accounts Payable (AP), Prepaid Expenses, and Deferred Revenue. Accrual accounting provides a true picture of your company's financial health, matching revenues and expenses to the period in which they are earned or incurred, not just when cash moves.
• Keep It Sparse: Resist the temptation to create an account for every single vendor or minor expense. A bloated COA is difficult to manage and obscures insights. Only add a new account if it’s required for compliance or drives a specific business decision.
• Separate COGS from OpEx: This is non-negotiable for understanding your profitability. Cost of Goods Sold (COGS) includes expenses that scale directly with revenue delivery (e.g., hosting for customers, payment processing fees). Everything else is an Operating Expense (OpEx). This separation is the key to calculating your gross margin.
• Use Tags for Dimensions: Don't use the COA to track departmental spending, projects, or specific customers. That's what metadata and tags are for. A transaction for a new server can be booked to Expenses:Cloud and tagged with #engineering and #project-phoenix. This keeps your COA clean while allowing for powerful, multi-dimensional reporting.
• Be Consistent: Decide on your accounting policies upfront and document them. For example, will you treat a SAFE (Simple Agreement for Future Equity) as a liability or as equity? Pick a method, write it down, and stick with it. Consistency is key for accurate period-over-period comparisons.

The Minimal, Seed-Stage Chart of Accounts 🌱​

This is a lean, SaaS-friendly COA that you can copy and paste directly into your beancount file. It covers the essentials for a pre-seed or seed-stage company.

; ===== Assets =====
1970-01-01 open Assets:Bank:Checking              USD
1970-01-01 open Assets:Bank:Savings               USD
1970-01-01 open Assets:AR                         USD              ; Accounts Receivable
1970-01-01 open Assets:Clearing:Stripe            USD              ; Payout clearing accounts
1970-01-01 open Assets:Clearing:PayPal            USD
1970-01-01 open Assets:Prepaid:Software           USD
1970-01-01 open Assets:Prepaid:Insurance          USD
1970-01-01 open Assets:Deposits                   USD              ; Rent/security deposits
1970-01-01 open Assets:Equipment                  USD
1970-01-01 open Assets:Intangibles                USD              ; Capitalized software/IP (if used)
1970-01-01 open Assets:Crypto:BTC                 BTC              ; Optional

; ===== Liabilities =====
1970-01-01 open Liabilities:AP                     USD              ; Accounts Payable
1970-01-01 open Liabilities:DeferredRevenue        USD
1970-01-01 open Liabilities:Payroll:Withholding    USD              ; Employee taxes withheld
1970-01-01 open Liabilities:Payroll:EmployerTaxes  USD
1970-01-01 open Liabilities:SalesTax:CA            USD              ; Per-state subaccounts as needed
1970-01-01 open Liabilities:SAFE                   USD              ; If classifying as liability
1970-01-01 open Liabilities:NotesPayable           USD
1970-01-01 open Liabilities:Accrued:Bonus          USD              ; Accruals (bonuses, legal, etc.)
1970-01-01 open Liabilities:Accrued:Legal          USD

; ===== Equity =====
1970-01-01 open Equity:CommonStock                USD
1970-01-01 open Equity:APIC                       USD              ; Additional Paid-in Capital
1970-01-01 open Equity:SAFE                       USD              ; If classifying SAFE as equity
1970-01-01 open Equity:RetainedEarnings           USD
1970-01-01 open Equity:OpeningBalances            USD

; ===== Income (credits) =====
1970-01-01 open Income:Revenue:SaaS                USD
1970-01-01 open Income:Revenue:Services            USD
1970-01-01 open Income:Contra:Discounts            USD              ; Negative revenue (discounts)
1970-01-01 open Income:Contra:RefundsChargebacks   USD
1970-01-01 open Income:Other:Interest              USD
1970-01-01 open Income:Other:FXGains               USD

; ===== Expenses =====
1970-01-01 open Expenses:COGS:Hosting              USD              ; Variable cloud for product delivery
1970-01-01 open Expenses:COGS:PaymentProcessing    USD              ; Stripe/PayPal fees
1970-01-01 open Expenses:Payroll:Wages             USD
1970-01-01 open Expenses:Payroll:EmployerTaxes     USD
1970-01-01 open Expenses:Benefits                  USD
1970-01-01 open Expenses:Contractors               USD
1970-01-01 open Expenses:Software:Subscriptions    USD
1970-01-01 open Expenses:Cloud                     USD              ; Internal tooling/workloads
1970-01-01 open Expenses:Rent                      USD
1970-01-01 open Expenses:EquipmentSmall            USD              ; < capitalization threshold
1970-01-01 open Expenses:Marketing:Paid            USD
1970-01-01 open Expenses:Marketing:Brand           USD
1970-01-01 open Expenses:Travel                    USD
1970-01-01 open Expenses:Meals                     USD
1970-01-01 open Expenses:Legal                     USD
1970-01-01 open Expenses:Accounting                USD
1970-01-01 open Expenses:Insurance                 USD
1970-01-01 open Expenses:BankFees                  USD
1970-01-01 open Expenses:Taxes:Income              USD
1970-01-01 open Expenses:Taxes:Sales               USD
1970-01-01 open Expenses:Depreciation              USD
1970-01-01 open Expenses:Amortization              USD
1970-01-01 open Expenses:Interest                  USD
1970-01-01 open Expenses:Other                     USD

Modular Add-Ons for Growth 📈​

As your business model evolves, you can activate new sets of accounts. Here are common modules to add as you scale.

SaaS Module​

Activate these when you start invoicing customers, especially for annual plans.

• Revenue Detail: Income:Revenue:SaaS:Monthly, Income:Revenue:SaaS:Annual, Income:Contra:Credits
• Deferrals & Receivables: Liabilities:DeferredRevenue (for cash received upfront) and Assets:AR (for invoices sent).
• Processor Control: Assets:Clearing:Stripe (to track payouts) and Expenses:COGS:PaymentProcessing.

Marketplace / Payments Module​

Add these if you hold or move money on behalf of users.

• Gross/Net Model: Liabilities:MerchantPayable (money owed to sellers) is critical. Your revenue is the Income:Revenue:MarketplaceFees you earn.
• Reserves: Liabilities:ProcessorReserves for funds held back by payment partners.

People & Payroll Module​

Once you have employees, you need to track payroll liabilities meticulously.

• Liabilities: Liabilities:Payroll:Withholding (employee taxes), Liabilities:Payroll:EmployerTaxes (your share), and Liabilities:Payroll:BenefitsPayable.
• Expenses: Break out Expenses:Benefits:Health, Expenses:Benefits:401kMatch, etc., for clarity.
• Equity Comp: If you recognize stock-based compensation, add Expenses:StockComp.

Sales Tax / VAT Module​

When you start collecting sales tax or VAT, create liability accounts for each jurisdiction.

• Liabilities: Liabilities:SalesTax:CA, Liabilities:SalesTax:NY, Liabilities:SalesTax:EU:DE
• Assets: Assets:VATRecoverable:EU:DE if you can claim input tax credits in a VAT regime.

Classification Cheatsheet: Where Does It Go?​

• COGS vs. OpEx
  • COGS: Costs that vary directly with product delivery. Think AWS hosting for your production app, Stripe fees, and third-party API costs that scale with usage.
  • OpEx: Fixed operating costs. Think AWS for your internal CI/CD pipeline, your subscription to Slack or GitHub, and salaries for your G&A staff.
• Contra-Revenue vs. Expense
  • Contra-Revenue: Anything that directly reduces top-line revenue. Use Income:Contra:Discounts or Income:Contra:Refunds. This ensures your gross revenue is accurately stated.
  • Expense: A cost of doing business. Payment gateway fees are a classic example that belongs in Expenses:COGS:PaymentProcessing, not as a contra-revenue item.
• Prepaids vs. Deferrals
  • Prepaid Expense: You paid cash for something you'll benefit from in the future (e.g., an annual insurance policy). The cash goes out, it sits in Assets:Prepaid:Insurance, and is then expensed monthly.
  • Deferred Revenue: A customer paid you for something you'll deliver in the future (e.g., an annual SaaS plan). The cash comes in, it sits in Liabilities:DeferredRevenue, and is then recognized as income monthly.

Example Presets for Common Startup Stages​

A) Pre-Revenue, Two-Founder SaaS (Ultra-Lean)​

Just starting? Include the minimal COA but comment out accounts you don't need yet, like Assets:AR and Liabilities:DeferredRevenue. Focus on tracking cash, payables, and basic operating expenses.

B) Seed SaaS with Stripe & Annual Plans​

Take the minimal COA and ensure these accounts are active to handle your core business loop:

1970-01-01 open Assets:Clearing:Stripe           USD
1970-01-01 open Liabilities:DeferredRevenue        USD
1970-01-01 open Income:Contra:RefundsChargebacks   USD
1970-01-01 open Expenses:COGS:PaymentProcessing    USD

C) Marketplace Alpha (Escrow-like Flow)​

In addition to the minimal COA, you absolutely need these accounts to manage funds owed to your sellers:

1970-01-01 open Liabilities:MerchantPayable        USD
1970-01-01 open Income:Revenue:MarketplaceFees     USD
1970-01-01 open Liabilities:SalesTax:Marketplace    USD

Documenting Policies & What to Keep Out​

Drop your key accounting policies directly into your ledger as comments. This creates an auditable, self-documenting system.

; Policy: Accrual basis; monthly revenue recognition for annual SaaS.
; Policy: Capitalize equipment > $5000 and depreciate straight-line over 3 years.
; Policy: SAFEs classified as Liabilities until conversion to equity.
; Policy: Use tags for departments (#eng #sales #g&a) and customers (#cust-acmeco).

Finally, remember what not to put in your COA.

• ❌ Departments and Teams: Use tags like #engineering instead of Expenses:Engineering:Software.
• ❌ Vendor Names: Use the payee: field in your transaction, not Expenses:Software:Slack.
• ❌ Temporary Plugs: Avoid creating "Misc" or "Temporary" accounts. If you're debugging, use Equity:Suspense and ensure it is cleared to zero.