When you go live on NetSuite, your chart of accounts (COA) becomes the backbone of every transaction, report, and financial insight that follows. But here’s the catch: once you start posting transactions, you can’t casually delete or overhaul accounts. That’s why getting the COA right at implementation is one of the most important setup steps.
This post walks through what the chart of accounts is in NetSuite, why you should avoid “bloated” legacy charts, and how to use NetSuite’s built-in classifications (departments, classes, locations, subsidiaries) so you get clean reporting without having 500+ account lines to maintain.
What is the Chart of Accounts in NetSuite?
Think of the chart of accounts as the table of contents for your accounting system.
- It’s a list of all the accounts your company uses: assets, liabilities, equity, income, COGS, expenses.
- Every time money comes in or goes out, NetSuite needs to know where to put it.
- The COA tells NetSuite: “This goes to a sales account,” or “This goes to office expense,” or “This is inventory.”
Just like a table of contents, though, the COA doesn’t tell you whether the business is profitable or healthy. It just tells you how things are organized. The insights come later—from reports like the trial balance, income statement, and balance sheet.
Why Planning the COA Matters (Before You Go Live)
In NetSuite implementations, a common mistake is to copy the old accounting system’s chart of accounts as-is.
That’s risky because:
- Old systems = bloated charts. Many legacy systems encouraged creating separate accounts for every little thing:
- Sales – Paper Products
- Sales – Copy Machines
- Sales – Shredding
- Sales – Supplies
- Sales – Services Suddenly you’ve got 30+ revenue accounts doing basically the same job.
- NetSuite doesn’t need all that. NetSuite already has powerful dimension fields—classes, departments, locations, subsidiaries—that let you slice and dice data without creating new GL accounts.
- You can’t easily undo it later. Once transactions start hitting those accounts, you can’t just delete or rename everything. So it pays to slow down and design a clean, scalable COA before transactions start posting.
Bottom line: build for the future, not for the old system.
Designing a “Healthy” NetSuite Chart of Accounts
When you’re setting yours up, aim for these principles:
- Keep it consolidated. One revenue account per major revenue type. One expense account per expense category. Let classifications do the rest.
- Align with NetSuite functionality. If you know you’ll be using departments, don’t create separate expense accounts just to “track departments.”
- Name accounts clearly. “Office Expenses” is better than “Misc.”
- Plan for reporting. Ask: “How will management want to see this?” If the answer is “by location,” use Locations—not 10 separate rent expense accounts.
- Lock it in early. Do this before importing opening balances or posting transactions.
Account Numbering in NetSuite (Optional but Helpful)
In the transcript, the speaker shows NetSuite’s COA screen and points out the account numbers column.
NetSuite doesn’t force you to use account numbers, but many accounting teams like to because it:
- Makes data entry faster
- Groups accounts visually
- Helps users recognize account types at a glance
A common structure looks like this:
- 1000–1999 → Assets
- 2000–2999 → Liabilities
- 3000–3999 → Equity
- 4000–4999 → Income / Sales
- 5000–5999 → Cost of Goods Sold
- 6000–6999 → Operating Expenses
- 7000–7999 → Other Income/Expense
So if you see 1050, you know it’s an asset. If you see 6200, you know it’s an expense. Faster, cleaner, easier to train.
How to View the Chart of Accounts in NetSuite
In the demo, the path was:
Reports → Financial → Chart of Accounts
That opens the full list of all accounts, including:
- Account name
- Account type (Asset, Liability, Expense, Income, etc.)
- Account number (if enabled)
- Balance column
Important note about the “Balance” column
That balance you see there isn’t “What’s in the bank right now.” It’s the cumulative total of all transactions that have ever hit that account since it was created.
So if you want current balances, don’t rely on the COA screen. Use:
- Trial Balance
- Balance Sheet
- GL reports
(We’d cover trial balance in a follow-up, just like the video mentioned.)
Common Mistakes to Avoid
- Importing the old COA without cleaning it. If your last system had 250 expense accounts, don’t bring that mess into NetSuite.
- Using accounts instead of classifications. If you ever hear “Let’s just make a new account for that”… pause and ask: “Could this be a class/department instead?”
- Not thinking multi-subsidiary. If you’re in NetSuite OneWorld, design a COA that works across subsidiaries.
- Letting users create accounts on the fly. Lock this down. A good COA is controlled.
Key Takeaways
- The NetSuite chart of accounts is your map, not your financial health.
- Design it up front — you can’t easily clean it later once transactions hit.
- Use classifications (classes, departments, locations, subsidiaries) for analysis instead of creating dozens of GL accounts.
- Optional numbering makes life easier for accountants.
- The balance you see on the COA screen is historical activity, not today’s balance.
If you follow that approach, you end up with a chart of accounts that’s:
Reportable (management actually gets what they need).
Lean (easy to maintain),
Scalable (works as you add products/entities),