Account numbering is the system used to assign numeric codes to accounts in the chart of accounts, enabling organised categorisation and reporting.
Account numbering provides a structured way to organise your chart of accounts. A typical numbering system uses ranges: 1000-1999 for Assets, 2000-2999 for Liabilities, 3000-3999 for Equity, 4000-4999 for Revenue and 5000-9999 for Expenses. Within each range, sub-groups provide further organisation - for example, 1000-1099 for Cash and Bank accounts, 1100-1199 for Accounts Receivable, 1200-1299 for Inventory. Good numbering allows you to add new accounts in logical positions without disrupting the structure. Xero uses a standard numbering system that can be customised. The key principles are: keep it logical, leave gaps for future accounts, use consistent number ranges and make it easy to understand. SortBooks works with whatever numbering system you use in Xero, mapping transactions to account numbers based on the AI's understanding of your business patterns.
SortBooks automates the bookkeeping processes related to account numbering by connecting to your Xero account and using AI to categorise transactions, reconcile bank feeds and generate accurate reports. Instead of manually managing account numbering, SortBooks handles it automatically with 97%+ accuracy - saving you hours every week and ensuring your books are always up to date and compliant.
The chart of accounts is a structured list of all accounts used in your accounting system to categorise transactions. It defines the categories for your income, expenses, assets, liabilities and equity.
The general ledger is the master record of all financial transactions in a business, organised by account. It forms the basis for preparing financial statements.
Xero is a cloud-based accounting platform designed for small businesses. It provides invoicing, bank reconciliation, payroll, reporting and integrations with over 1,000 third-party apps.
Financial statements are formal reports that summarise your business's financial position and performance. The three core statements are the profit and loss, balance sheet and cash flow statement.
Transaction categorisation is the process of assigning each financial transaction to the correct account in your chart of accounts. It is the core activity of bookkeeping.
SortBooks handles all the complexity automatically. Just connect Xero and let AI manage your books.