The Chart of Accountsشجرة الحسابات

What the Chart of Accounts is:

Every time your company pays or receives money, the amount has to land somewhere. The Chart of Accounts is the full list of the places it can land, one numbered account for every kind of money that moves.

You do not need to be an accountant to read it. Two ideas carry the whole thing:

• Every entry touches two accounts. Money always comes from somewhere and goes somewhere.
• The digits are the structure. 4 → 41 → 411 → 4111 → 41111. Each extra digit is one level deeper, so the account number by itself tells you where the account sits. That is why Libra draws the chart as a tree, and why the account form has a Length box: 41111 has a length of 5 because it is five levels down.

A Worked example

You sell to a client on credit and issue an invoice. Two things happened at the same moment:

• You earned money - that is income, class 7.
• The client now owes you money - that is a receivable, class 4 → 41 Debtors (Customers) → 411 Invoices → 4111 Clients → 41111 Ordinary Clients.

One invoice, two accounts. When the client eventually pays, the receivable closes and a cash account moves instead. Every report Libra produces (trial balance, balance sheet, income statement) is built by adding these numbers up, which is why putting an amount on the wrong account is not a cosmetic mistake.

Which plan Libra uses

Libra is built on the Lebanese plan, which is also used across Africa and by Gulf customers. It is the wider of the two common plans: the Lebanese plan covers what the international plan does, but not the other way round. A customer who needs a different plan starts from a blank chart and opens only the accounts they want (that is how the Iraqi chart now shipped with the system was built). See Old Plan vs New Plan for the two ways a new company's accounts can be started.

The classes

Open the chart and the top level is seven classes, sitting under a single root row, 0 Chart of Accounts Tree View:

The plan itself defines classes 1 to 9. Libra ships 1 to 7, and that is what the tree shows. Classes 8 and 9 are analytical and production accounting, and are not used.

Class 3 is worth a note: it holds the value of your stock rather than its movements. Companies on periodic inventory touch it at the start and the end of the year the difference between the two, positive or negative, is what raises or lowers the profit being distributed.

The screen

Open it from the left menu: Chart of accounts. It opens as its own tab, so you can leave it open while you work elsewhere.

Each row is one account, with the columns Number, Latin description, Currency, VAT and Category Edescription. Under the column headers there is a filter row, type in it to narrow that column, and there is a Search box at the top right of the tab.

The ribbon above the tree carries seven buttons:

• New: open a new account under the row you have selected.
• Edit: open the selected account's details.
• Delete: remove the selected account.
• Refresh: reload the tree.
• Preview: a print preview of the chart.
• Expand all nodes: open every branch at once.
• Ledger categories: the ledger-category screen, described at the end of this guide.

Every class opens into levels

The seven classes are only the first level. Class 4 shows how far it goes it alone has ten groups underneath it:

Classes 6 and 7 break down the same way, and you can add your own accounts wherever you need more detail - the plan is designed to be extended, on paper and in the system alike.

Down to a real account

Keep opening: 41 Debtors (Customers) → 411 Invoices → 4111 Clients. Around them sit the other accounts a real business needs:

Clients who are registered for VAT and clients who are not are kept on two separate accounts - 41111 Ordinary Clients, which has VAT ticked, and 41112 Clients Non VAT. Suppliers are split the same way. This split is what makes a VAT return come out right, so it is worth putting each new client on the correct account from the start.

The parent/child rule

This is the most important rule on this screen, and the one behind the most support calls. Learn it before you open your first account.

• You post only on the last account in a branch the child, never the parent. 4111 Clients is a heading; 41111 Ordinary Clients is where an entry actually lands.
• Once an account has been used, its shape is frozen. If entries have been posted on it, you can no longer open accounts underneath it it can never become a parent.
• And the other way round: once the children carry entries, the parent can no longer be posted on.

So when someone asks to split an existing account in two, the first question is always: have you already posted on it?

If the answer is yes, it is still fixable it just takes a detour:

1. Move the existing postings onto a plain, unrelated account.
2. Open the new accounts you want the detail to sit on.
3. Move the postings back, spreading them across the new accounts.

Ledger categories

The last ribbon button opens Ledger categories in its own tab. Pick an entry from the Categories list at the top right, then move ledger accounts between the two panes with the green add and red remove buttons in the middle - the same mechanic as the Quick List. The left pane is everything available (111 Legal Reserve, 121 Accumulated Profits, 131 Gross Trade Margin, 132 Value Added, 134 Operating Result (P…) and so on); the right pane is what the chosen category contains.

Next: How to open an account - the New → fill → Save walkthrough, field by field.