Standardized Chart of Accounts

Levelup uses AI and NLP to auto-categorize the chart of accounts, saving hours of manual work and improving accuracy with user feedback to refine future mapping.

The intelligence behind Levelup

At the heart of Levelup is our powerful Artificial Intelligence (AI) engine, which transforms how companies manage and standardize their Chart of Accounts. When we operated our own accounting firm, we often spent hours manually reformatting each company’s general ledger (GL) to fit a standardized template—just to enable consistent reporting across multiple entities. But because every company has unique needs and account structures, this manual process was not only time-consuming but also inefficient.

The Levelup Standardization Engine

Our AI Standardization Engine solves this problem using advanced Natural Language Processing (NLP) and machine learning. It intelligently reads each account and maps it to the most appropriate standardized category. This allows users to achieve consistent financial reporting—without the repetitive grunt work.

We also believe in human oversight. Users are encouraged to review and adjust the AI-generated account mappings as needed. Any manual overrides are stored in our system and periodically reviewed to further train and improve the AI model. The result is a smarter, faster, and continually improving categorization engine that adapts to real-world use.

Levelup Standard Chart of Accounts

Our Standard Chart of Accounts is as follows:

Assets

Level 2	Level 3	Level 4	Definition
Current Assets
	Accrued Deferred Assets
		Deferred Legal	Tracks legal costs that have been paid in advance but not yet expensed.
		Deferred Marketing	Tracks marketing expenses that have been paid in advance but not yet recognized.
		Deferred Revenue	Tracks income received in advance for goods or services to be delivered in the future.
		General	Tracks all other prepaid or deferred expenses related to current assets not categorized elsewhere.
		Prepaid Insurance	Tracks payments made for insurance policies that provide coverage in future periods.
		Prepaid Inventory	Tracks payments made for inventory that has not yet been received or consumed.
		Prepaid Rent	Tracks rent payments made in advance for future periods.
		Prepaid Services	Tracks payments for services not yet rendered but expected to be used in the future.
		Prepaid Taxes	Tracks taxes paid in advance that apply to future periods.
		Prepaid Utilities	Tracks utility payments made in advance for services to be consumed in the future.
	Allowance for Bad Debts
		General	Tracks estimated amounts of receivables that are unlikely to be collected.
	Bank
		Checking	Tracks funds held in checking accounts that typically have BANK feeds.
		Credit Card *	Tracks balances in credit card accounts which are typically set up with BANK feeds. These often get categorized as current assets although they are actually current liabilities. We prefer to see credit cards classified as a current liability.
		General	Tracks balances in bank accounts not specifically categorized, with BANK feeds.
		Money Market	Tracks funds in money market accounts that usually have BANK feeds.
		Savings	Tracks funds in savings accounts that typically have BANK feeds.
	Cash Equivalents
		Certificates of Deposit	Tracks short-term, highly liquid investments like CDs that do not have BANK feeds.
		Clearing Account	Tracks temporary holding accounts used to process and reconcile cash-related transactions before being allocated to the appropriate account. These accounts act as intermediaries for cash movements, such as undeposited checks, pending bank transfers, or batch deposits that require further categorization. Clearing accounts ensure accurate reconciliation of cash flow while preventing discrepancies in financial reporting.
		General	Tracks other short-term, highly liquid investments not categorized elsewhere, without BANK feeds.
		Petty Cash	Tracks physical cash on hand for minor business expenses.
		Treasury Bills	Tracks investments in short-term government securities, not tied to BANK feeds.
	Inventory
		Finished Goods	Tracks inventory of goods ready for sale.
		General	Tracks all inventory not specifically categorized as finished goods, raw materials, or work in process.
		Raw Materials	Tracks raw materials to be used in production.
		Work in Process	Tracks inventory items that are in production but not yet completed.
	Investments
		Debt	Tracks short-term (less than 1 year) debt investments like bonds or notes.
		Equity	Tracks short-term (less than 1 year) equity investments like stocks.
		General	Tracks other short-term (less than 1 year) investments not categorized as debt or equity.
	Other
		General	Tracks miscellaneous current assets that do not fit other categories.
	Receivables
		General	Tracks amounts owed to the business from customers and others.
		Non Trade	Tracks receivables not related to the sale of goods or services, such as employee advances.
		Trade	Tracks receivables directly related to the sale of goods or services.
	Related Parties
		General	Tracks amounts due from related parties, such as subsidiaries or affiliates.
	Restricted Funds
		General	Tracks funds that are restricted for specific purposes and not freely available for general use.
	Undeposited Funds
		General	Tracks payments received but not yet deposited into a bank account.
		Merchant Funds in Transit	Tracks funds collected through merchants or payment processors that are in transit.
		Undeposited Cash	Tracks cash received but not yet deposited into a bank account.
		Undeposited Checks	Tracks checks received but not yet deposited into a bank account.
Non Current Asset
	Accrued Deferred Assets
		Deferred Financing Costs	Tracks costs associated with securing long-term financing, amortized over time.
		Deferred Revenue Recognition	Tracks deferred income to be recognized over future periods.
		Deferred Software Development	Tracks costs related to software development that are capitalized.
		Deferred Tax Assets	Tracks expected future tax benefits arising from temporary differences or carryforwards.
		General	Tracks deferred costs related to non-current assets not otherwise categorized.
		Prepaid Leasehold Improvements	Tracks prepayments for leasehold improvements that are capitalized as non-current assets.
	Accumulated Deprecation Depletion Amortization
		Amortization	Tracks accumulated amortization for intangible assets.
		Depletion	Tracks accumulated depletion of natural resources.
		Depreciation	Tracks accumulated depreciation of tangible assets.
		General	Tracks accumulated charges for depreciation, depletion, and amortization not categorized elsewhere.
	Intangible Assets
		General	Tracks intangible assets such as patents or copyrights.
		Goodwill	Tracks goodwill acquired through business acquisitions.
		Organizational Costs	Tracks costs incurred during the formation or restructuring of a business, such as legal fees, incorporation expenses, or costs for drafting organizational documents. These costs are considered an asset because they provide long-term benefits by enabling the business to operate legally and efficiently, establishing the foundation for its operations. As such, these costs are capitalized and amortized over a period, reflecting their utility beyond the initial period in which they are incurred.
	Investments
		Debt	Tracks long-term (greater than 1 year) investments in debt instruments like bonds.
		Equity	Tracks long-term (greater than 1 year) investments in equity instruments like stocks.
		General	Tracks long-term (greater than 1 year) investments not otherwise categorized.
	Other
		General	Tracks miscellaneous non-current assets not categorized elsewhere.
	Receivables
		General	Tracks long-term (greater than 1 year) receivables, such as installment loans.
	Related Parties
		General	Tracks long-term (greater than 1 year) amounts due from related parties, such as affiliates or subsidiaries.
	Tangible Assets
		Automobiles	Tracks vehicles owned by the business.
		Buildings	Tracks buildings owned by the business.
		Furniture	Tracks office furniture and fixtures.
		General	Tracks all tangible assets not otherwise categorized.
		Land	Tracks land owned by the business.
		Leasehold Improvements	Tracks improvements made to leased property.
		Machinery Equipment	Tracks machinery and equipment used in operations.
		Office Equipment	Tracks office equipment such as computers or printers.
		Software	Tracks the cost of software purchased or developed for long-term use in business operations. This is considered an asset rather than an expense because the software provides economic benefits over multiple accounting periods. By capitalizing these costs as an asset, the expense is recognized incrementally through amortization, aligning the cost with the periods in which the software contributes to revenue generation or operational efficiency, rather than being fully expensed in the period of acquisition or development.

Liabilities

Level 2	Level 3	Level 4	Definition
Current Liability
	Accounts Payable
		General	Tracks amounts owed to vendors and suppliers for goods or services received but not yet paid.
		Non Trade	Tracks amounts payable to non-trade parties, such as utility companies or service providers, outside regular business operations.
		Trade	Tracks payables to suppliers or vendors directly related to the business's core trade or production activities.
	Accrued Liabilities
		Customer Credits	Tracks credits owed to customers for returns, overpayments, or other adjustments.
		Customer Deposits	Tracks funds received from customers as deposits for future goods or services.
		Customer Prepayments	Tracks prepayments made by customers for goods or services yet to be delivered.
		General	Tracks other accrued liabilities related to short-term obligations not otherwise categorized.
	Credit Cards
		General	Tracks balances owed on business credit cards, typically paid monthly. This is the preferred account for credit cards
	Debt
		Credit Lines	Tracks amounts drawn from revolving credit lines payable within a year.
		Current Portion of Long Term Debt	Tracks the portion of long-term debt that is due within the next 12 months.
		General	Tracks all short-term debt obligations not otherwise categorized.
		Short Term	Tracks short-term borrowing, such as loans maturing within one year.
	Interest Payable
		General	Tracks interest expenses accrued but not yet paid, related to any type of debt.
		Long Term	Tracks interest accrued on long-term debt that is due within the current period.
		Short Term	Tracks interest accrued on short-term debt obligations.
	Other
		General	Tracks miscellaneous short-term liabilities that do not fall into other categories.
	Personnel
		Benefits	Tracks amounts owed for employee benefits such as health insurance or retirement contributions.
		Bonuses	Tracks bonuses earned by employees but not yet paid.
		Contractors	Tracks amounts owed to contractors for completed work or services.
		Deductions Garnishments	Tracks employee payroll deductions or garnishments owed to third parties.
		General	Tracks general liabilities related to personnel expenses not otherwise categorized.
		Overtime Pay	Tracks overtime wages earned by employees but not yet paid.
		Payroll Taxes	Tracks employer payroll tax obligations that are accrued but not yet paid.
		Salaries Wages	Tracks salaries and wages earned by employees but not yet paid.
	Related Parties
		General	Tracks amounts payable to related parties, such as affiliates or subsidiaries, due within a year.
	Taxes Payable
		Franchise Tax	Tracks franchise tax liabilities owed to state or local governments.
		General	Tracks general tax obligations accrued but not yet paid.
		Income Tax	Tracks income tax liabilities owed to federal, state, or local governments.
		Penalties	Tracks penalties assessed on unpaid or late tax payments.
		Property Tax	Tracks property tax obligations accrued but not yet paid.
		Sales Tax	Tracks sales tax liabilities collected from customers on taxable sales that are owed to government tax authorities.
Non Current Liability
	Accrued Liabilities
		General	Tracks long-term accrued liabilities, such as deferred benefits or obligations not due within a year.
	Debt
		General	Tracks long-term debt obligations, such as loans or bonds, that mature beyond one year.
	Other
		General	Tracks miscellaneous long-term liabilities not categorized elsewhere.
	Related Parties
		General	Tracks amounts owed to related parties, such as parent companies or affiliates, that are not due within a year.

Equity

Level 2	Level 3	Level 4	Definition
Other Comprehensive Income
	Cash Flow Hedges
		General	Tracks unrealized gains or losses from cash flow hedges that manage exposure to future cash flow variability, recognized in other comprehensive income until realized.
	FX Currency Translations
		General	Tracks unrealized gains or losses from translating foreign subsidiary financial statements into the reporting currency, recorded in other comprehensive income to reflect currency fluctuations.
	Other
		General	Tracks other unrealized gains or losses not specifically categorized, recognized in other comprehensive income to capture changes in equity outside of net income.
Owners Equity
	Drawings
		General	Tracks withdrawals by business owners from the entity for personal use, reducing the owner's equity balance in non-corporate structures like sole proprietorships or partnerships.
	Other
		General	Tracks other adjustments to owners equity in non-corporate entities, such as rare transactions or adjustments not covered by other categories.
	Owners Contributions
		General	Tracks funds or assets contributed by business owners to the entity, increasing the ownerâ€™s equity balance in non-corporate structures.
Related Parties
	Equity Non Controlling Interests
		General	Tracks the portion of equity attributable to minority stakeholders in subsidiaries, representing ownership by entities or individuals outside of the parent company.
	Other
		General	Tracks other equity transactions involving related parties, such as capital transfers or adjustments between affiliates or subsidiaries.
Retained Earnings
	Accumulated
		General	Tracks the cumulative net income or loss retained in the business over its entire history, excluding distributions such as dividends or withdrawals. This reflects the total reinvested earnings available for future growth or obligations.
	Adjustments
		General	Tracks adjustments to retained earnings resulting from prior-period corrections, changes in accounting policies, or other retrospective modifications. These adjustments ensure the retained earnings reflect the most accurate cumulative results.
	Capital Income Reserves
		General	Tracks reserves created from retained earnings, allocated for specific purposes such as reinvestment, risk mitigation, or future obligations.
	Current Year Earnings
		General	Tracks the net income or loss generated during the current fiscal year, providing a breakdown of the retained earnings attributable to the current reporting period.
	Dividends
		General	Tracks the distribution of retained earnings to shareholders in the form of declared dividends, reducing the retained earnings balance.
	Opening Balance
		General	Tracks the opening balance of retained earnings carried forward from the previous reporting period, reflecting cumulative net income after dividends.
	Other
		General	Tracks retained earnings transactions or adjustments that do not fall into other specified categories, providing a catch-all for rare adjustments.
Share Capital
	Additional Paid in Capital
		General	Tracks amounts paid by investors above the par value of issued shares, reflecting additional equity contributions.
	Common Stock
		General	Tracks the nominal value of common stock issued by the corporation, representing ownership stakes with voting rights.
	Employee Stock Ownership Plan
		General	Tracks equity allocated under employee stock ownership plans (ESOPs), providing shares to employees as part of compensation or benefits.
	Other
		General	Tracks other share capital transactions not categorized, such as rare or unique issuances.
	Paid in Capital
		General	Tracks all capital contributions from shareholders in exchange for stock, excluding retained earnings and other equity adjustments.
	Preferred Stock
		General	Tracks the nominal value of preferred stock issued, representing shares with preferential rights over common stock in dividends or liquidation.
	Treasury Stock
		General	Tracks the cost of shares reacquired by the corporation, reducing total equity as these shares are no longer outstanding.

Income

Level 2	Level 3	Level 4	Definition
Other Revenue
	Donations
		Corporate	Tracks revenue from donations made by corporations, typically for philanthropic purposes or sponsorships.
		General	Tracks all donations received, regardless of source, for unrestricted or designated use.
		Individual	Tracks donations from individual donors, often for fundraising or charitable purposes.
	Grants
		General	Tracks revenue from grants received from any source, including government or private entities, for general funding.
		Government	Tracks grants provided by government agencies for specific projects, programs, or operations.
		Private	Tracks grants from private organizations or foundations awarded for specific purposes.
	Non Profit
		General	Tracks revenue from non-profit activities, such as program fees or fundraising events.
	Other
		Discounts Returns Allowances	Tracks discounts, returns, or allowances applied to miscellaneous Operating revenue sources not specifically categorized.
		General	Tracks miscellaneous Operating revenue that does not fit into predefined categories.
	Partnerships
		General	Tracks revenue generated through partnerships, including profit-sharing or joint ventures.
	Reimbursements
		General	Tracks revenue from reimbursements for expenses incurred on behalf of other entities.
	Unapplied Cash
		General	Tracks unapplied cash payments received but not yet allocated to specific invoices or revenue accounts.
Product Revenue
	Franchise Fees
		Discounts Returns Allowances	Tracks discounts, returns, or allowances applied to franchise fee revenue.
		General	Tracks revenue generated from franchise fees, including initial setup or recurring payments.
	Licensing
		Discounts Returns Allowances	Tracks discounts, returns, or allowances applied to licensing revenue.
		General	Tracks revenue earned from licensing intellectual property, such as software or trademarks.
	Product Sales
		Discounts Returns Allowances	Tracks discounts, returns, or allowances applied to product sales revenue.
		General	Tracks revenue from general product sales across all sales channels.
		Online	Tracks revenue from products sold through online platforms or e-commerce sites.
		Retail	Tracks revenue from products sold through physical retail stores.
		Wholesale	Tracks revenue from products sold in bulk to wholesalers or distributors.
	Rental Income
		Discounts Returns Allowances	Tracks discounts, returns, or allowances applied to rental income.
		General	Tracks revenue from renting out physical assets, such as property or equipment.
	Royalties
		Discounts Returns Allowances	Tracks discounts, returns, or allowances applied to royalties revenue.
		General	Tracks revenue from royalties earned through intellectual property, such as patents or creative works.
	Subscriptions
		Discounts Returns Allowances	Tracks discounts, returns, or allowances applied to subscription revenue.
		General	Tracks revenue from subscriptions, including recurring or one-time payments.
		One Time	Tracks revenue from one-time subscription payments for limited access to products.
		Recurring	Tracks revenue from recurring subscription payments for ongoing access to products.
Service Revenue
	Advertising Services
		Discounts Returns Allowances	Tracks discounts, returns, or allowances applied to advertising services revenue.
		General	Tracks revenue generated from advertising services, including placements or campaigns.
	Commissions Referrals
		General	Tracks revenue earned from commissions or referrals, typically for directing clients to other businesses.
	Custom Development
		General	Tracks revenue from custom development services, such as software or product development.
	Maintenance Contracts
		General	Tracks revenue from maintenance contracts, including ongoing support or repair services.
	Other
		Discounts Returns Allowances	Tracks discounts, returns, or allowances applied to miscellaneous service revenue.
		General	Tracks miscellaneous service revenue that does not fit into predefined categories.
	Professional Services
		Discounts Returns Allowances	Tracks discounts, returns, or allowances applied to professional services revenue.
		General	Tracks revenue from professional services provided to clients, such as consulting or advisory work.

Direct Costs

Level 2	Level 3	Level 4	Definition
Cost of Sales
	Fulfillment Logistics
		General	Tracks costs incurred for the fulfillment and logistics of delivering products or services, including shipping, handling, and service delivery logistics.
	Infrastructure
		General	Tracks general costs associated with maintaining physical or digital infrastructure required for producing or delivering products or services.
		Leases	Tracks leasing costs related to Direct Costs for operational systems and non-property resources, such as leases on IT networks or equipment, etc
		Repairs Maintenance	Tracks costs for repairs and maintenance of infrastructure, such as equipment or digital platforms used for products or services.
	Inventory
		Genereal	Tracks costs related to managing inventory for product sales, such as purchasing, storing, or replenishing stock
	Manufacturing Process
		General	Tracks costs incurred during the manufacturing process for products, including raw materials and production expenses
	Marketing
		Digital	Tracks costs for digital marketing efforts directly tied to the sale or promotion of products or services, such as online ads and email campaigns.
		Events	Tracks costs for events, trade shows, or webinars used to promote products or services, such as booth rentals or hosting fees.
		General	Tracks general marketing costs incurred for promoting products or services that are not categorized elsewhere.
		Print	Tracks costs for printed marketing materials, such as brochures or catalogs, for products or service offerings.
	Merchant Fees
		General	Tracks fees paid to merchants or payment processors for handling transactions related to product or service sales, such as credit card processing fees.
	Other
		General	Tracks miscellaneous costs directly related to the sale or delivery of products or services that do not fit other predefined categories.
	Personnel
		Benefits	Tracks costs for employee benefits related to personnel involved in the production, sale, or delivery of products or services, such as health insurance or retirement plans.
		Bonuses	Tracks costs for bonuses paid to employees involved in the production, sale, or delivery of products or services.
		Commissions	Tracks commission payments made to sales personnel or contractors for selling products or services.
		Contractors	Tracks costs paid to contractors involved in the production, sale, or delivery of products or services.
		General	Tracks general personnel costs related to employees involved in the production, sale, or delivery of products or services.
		Overtime Pay	Tracks overtime pay for personnel involved in the production, sale, or delivery of products or services.
		Payroll Taxes	Tracks payroll taxes paid for employees involved in the production, sale, or delivery of products or services.
		Salaries Wages	Tracks salaries and wages paid to employees directly involved in the production, sale, or delivery of products or services.
	Profesional Services
		Accounting Services	Tracks costs for accounting services specifically related to managing the production, sale, or delivery of products or services.
		Consulting Services	Tracks costs for consulting services directly related to the production, sale, or delivery of products or services.
		General	Tracks general costs for professional services tied to the production, sale, or delivery of products or services.
		Legal Services	Tracks legal service costs directly associated with contracts, licensing, or compliance tied to products or services.
	Royalties
		General	Tracks royalty payments made for intellectual property or licensing tied to the sale or delivery of products or services.
	Software Data
		General	Tracks costs for software licenses, subscriptions, or data services directly used in the production, sale, or delivery of products or services.

Expense

Level 2	Level 3	Level 4	Definition
Operating
	Automobile
		Gas Fuel	Tracks costs for gas and fuel used in company-owned or leased vehicles.
		General	Tracks general automobile expenses that do not fall into specific categories.
		Insurance	Tracks insurance costs for company-owned or leased vehicles.
		Interest	Tracks interest payments for automobile loans or leases.
		Lease	Tracks expenses for leasing company vehicles.
		Parking	Tracks costs for parking fees incurred during business operations.
		Payment	Tracks payments for automobile leases. The loan payment should not be used here. It should be applied against a liability account.
		Registration	Tracks costs for registering company-owned or leased vehicles.
		Repairs	Tracks costs for repairs and maintenance of company-owned or leased vehicles.
	Bank Charges
		General	Tracks general bank fees or charges incurred during business operations.
	Charitable Contributions
		General	Tracks donations or contributions made to charitable organizations.
	Infrastructure
		General	Tracks general costs for operational systems and non-property resources, such as IT networks or equipment.
		Leases	Tracks leasing costs not identifiable as Direct Costs for operational systems and non-property resources, such as leases on IT networks or equipment, etc.
		Repairs Maintenance	Tracks expenses for repairs and maintenance of operational infrastructure, such as machinery or IT systems.
	Marketing
		Digital	Tracks expenses for digital marketing efforts, such as social media ads or email campaigns.
		Events	Tracks costs for hosting or participating in marketing events, such as trade shows or conferences.
		General	Tracks general marketing expenses not categorized elsewhere.
		Print	Tracks costs for printed marketing materials, such as brochures or flyers.
	Other
		General	Tracks miscellaneous operating expenses that do not fit into other categories.
	Personnel
		Benefits	Tracks expenses for employee benefits, including health insurance or retirement plans.
		Bonuses	Tracks costs for bonuses paid to employees for operational performance.
		Commissions	Tracks commission payments made to employees or contractors for operational activities.
		Contractors	Tracks costs associated with hiring external contractors for operational purposes.
		General	Tracks general personnel expenses that do not fall into specific categories.
		Overtime Pay	Tracks overtime pay given to employees for hours worked beyond their regular schedules.
		Payroll Taxes	Tracks payroll taxes paid by the company for employee wages.
		Salaries Wages	Tracks salaries and wages paid to employees for operational roles.
	Professional Services
		Accounting Services	Tracks costs for accounting services, such as bookkeeping or auditing.
		Consulting Services	Tracks expenses for consulting services used for operational improvements or strategies.
		General	Tracks general expenses for professional services, such as legal or consulting advisors.
		Legal Services	Tracks legal service costs, such as contract reviews or compliance-related expenses.
	Property
		CAM	Tracks common area maintenance (CAM) charges for leased properties.
		Dues	Tracks membership or association dues related to operational properties.
		General	Tracks general costs related to property, such as maintenance or real estate management.
		Insurance	Tracks insurance costs for property, such as fire or liability coverage.
		Leases	Tracks lease or rental expenses for physical buildings or office spaces used for operations.
	Research Development
		General	Tracks costs for research and development efforts related to new products, services, or processes.
	Sales General Administrative
		Entertainment	Tracks costs for entertainment purposes, such as client entertainment or employee events.
		General	Tracks general sales, general, and administrative expenses not categorized elsewhere.
		Insurance	Tracks insurance costs related to sales or administrative activities.
		Meals Fully Deductible	Tracks expenses for meals that are fully deductible for tax purposes, such as company-provided meals.
		Meals Non Deductible	Tracks expenses for meals that are not deductible for tax purposes in the U.S., such as lavish or extravagant meals, meals provided as part of entertainment, or meals reimbursed without proper documentation.
		Meals Partially Deductible	Tracks expenses for meals that are partially deductible for tax purposes, typically business-related.
		Office	Tracks expenses for office-related costs, such as furniture or decor.
		Shipping	Tracks expenses related to office-related postage and shipping, such as mailing documents, office supplies, or administrative correspondence. This does not include shipping costs associated with product delivery.
		Supplies	Tracks costs for general office supplies used in daily operations.
	Software Data
		General	Tracks costs for software licenses, subscriptions, or data services used in general administrative.
	Travel
		Airfare	Tracks expenses for airfare purchased for business-related travel.
		General	Tracks general travel expenses not specified under other travel categories.
		Lodging	Tracks expenses for lodging incurred during business-related travel.
		Mileage	Tracks reimbursement or expenses for mileage incurred during business-related travel.
	Utilities
		General	Tracks utility costs for operational properties, such as electricity, water, or internet.

Other Income

Level 2	Level 3	Level 4	Definition
Operating
	Cash Back Rewards
		General	Tracks cash back rewards or rebates earned from credit card or vendor programs, unrelated to core business operations.
	Other
		General	Tracks miscellaneous income generated from operational activities that do not fall into other specific income categories. Examples include minor reimbursements, operational rebates, or other small revenue streams directly tied to day-to-day business operations. These amounts are excluded from gross revenue to maintain accurate reporting of core revenue-generating activities.
Non Operating
	Asset Disposals
		General	Tracks income earned from the disposal or sale of company assets, such as equipment or property, outside regular operations.
	Dividends Items
		General	Tracks income earned from dividends on investments in stocks or other equity instruments.
	Extraordinary Items
		General	Tracks income resulting from extraordinary or non-recurring events, such as legal settlements or insurance recoveries.
	Fx Gain
		General	Tracks income from foreign exchange rate gains, whether realized or unrealized.
		Realized	Tracks income from foreign exchange rate gains on transactions that have been completed or settled.
		Unrealized	Tracks income from foreign exchange rate gains on transactions or holdings that have not yet been settled.
	Interest
		General	Tracks interest income earned from investments, savings, or other non-operating activities.
	Other
		General	Tracks miscellaneous non-operating income that does not fit into other specified categories.
	Tax Refunds Credits
		General	Tracks income from tax refunds, credits, or adjustments received from government agencies.

Other Expense

Level 2	Level 3	Level 4	Definition
Operating
	Amortization
		Intangible Assets	Tracks amortization expenses for intangible assets, such as patents, licenses, or goodwill, used in business operations.
	Bad Debts
		General	Tracks expenses for accounts receivable written off as uncollectible due to customer defaults.
	Depletion
		Natural Resources	Tracks expenses for the depletion of natural resources, such as oil, gas, or timber reserves, used in operations.
	Depreciation
		General	Tracks depreciation expenses for operational tangible assets, such as buildings, vehicles, or machinery not defined elsewhere
		Tangible Assets	Tracks depreciation expenses for specific tangible assets used in operations, such as equipment or tools.
	Interest
		Financing Costs	Tracks interest expenses incurred specifically for financing activities, such as issuing bonds or securing loans.
		General	Tracks general interest expenses incurred on loans or lines of credit used for operational purposes.
		Long Term	Tracks interest expenses related to long-term liabilities, such as mortgages or bonds.
		Short Term	Tracks interest expenses related to short-term liabilities, such as credit lines or short-term loans.
Non Operating
	Dividends
		General	Tracks dividend payments made to shareholders, classified as a distribution of profits rather than an operational expense.
	Donations
		General	Tracks donations or contributions made to charitable organizations or causes, not directly tied to business operations.
	Drawings
		General	Tracks withdrawals made by owners or partners for personal use, typically recorded in non-corporate entities.
	Extraordinary Items
		General	Tracks expenses arising from extraordinary or non-recurring events, such as natural disasters or one-time legal settlements.
	Fx Loss
		General	Tracks foreign exchange losses resulting from fluctuations in currency exchange rates.
		Realized	Tracks foreign exchange losses on completed or settled transactions.
		Unrealized	Tracks foreign exchange losses on transactions or holdings not yet settled.
	Other
		General	Tracks miscellaneous non-operating expenses that do not fit into other specified categories.
	Penalties
		General	Tracks penalties or fines incurred due to regulatory violations or non-compliance.
	Restructuring
		General	Tracks expenses related to non-operational restructuring, such as discontinuation of business segments.
	Taxes
		Franchise Tax	Tracks franchise taxes paid to state or local governments for permission to operate in specific jurisdictions.
		General	Tracks non-operating taxes that are not income, franchise, or property-related.
		Income Tax	Tracks expenses for income taxes paid to federal, state, or local governments.
		Penalties	Tracks penalties incurred for late or incorrect tax filings or payments.
		Property Tax	Tracks expenses for property taxes paid on owned real estate or equipment.
		Sales Use Tax	Tracks sales and use tax expenses incurred by the business on taxable purchases where sales tax was not collected by the vendor at the time of purchase. This includes tax obligations for out-of-state or online purchases, where the company is required to self-assess and remit use tax to the appropriate tax authorities. Unlike sales tax collected from customers (which is recorded as a liability), sales and use tax in this category represents an actual business expense when the company is responsible for paying it directly.

* Note on Credit Cards

Here at Levelup we believe that Credit Cards should be coded as Current Liabilities > Credit Cards. Take note that the Xero GL creates Credit Cards as Assets > Bank Accounts and then treats those accounts as contra-assets and then will use a "Switching Rule" on the Balance Sheet to show these as Current Liabilities. We are retraining our AI to automatically categorize these as Current Liabilities but if you want to keep them as contra-assets you're welcome to do so. We just think you're wrong if you do that.

Flexible COA for SMBs

Our Standard Chart of Accounts (COA) is designed to accommodate a wide range of complex scenarios commonly encountered by small and medium-sized businesses (SMBs). For instance, some companies prefer to include labor costs within their direct costs to accurately calculate gross margins, while others opt to classify all labor expenses under operating expenses.

While Generally Accepted Accounting Principles (GAAP) provide a framework for financial reporting, they allow for some flexibility, especially for privately held SMBs. Accountants often apply GAAP guidelines pragmatically, recognizing that strict adherence to standards designed for public entities may not always suit the unique needs of smaller businesses.

Our COA reflects this practical approach by accommodating both GAAP-compliant and non-GAAP scenarios, ensuring that businesses can tailor their financial reporting to their specific operational requirements.

Conclusion

While our AI Standardization Engine aims to align your chart of accounts with GAAP standards for consistency across multiple entities, we recognize that the financial reporting needs of small and medium-sized businesses (SMBs) often require flexibility. Our system is designed to accommodate these unique requirements, allowing for adjustments that reflect the specific operational realities of each business. By combining intelligent automation with user-driven customization, we strive to provide a solution that balances standardization with the adaptability necessary for accurate and meaningful financial reporting.

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