Running a small service-based business doesn’t require every account in Fynlo’s default chart. By keeping only the accounts that matter, renaming them to match your business, and disabling what you don’t need, you can simplify your bookkeeping and focus on growth.
This guide will walk you through which accounts to keep, rename, or disable so your chart of accounts fits the needs of a small service business.
Step 1: Assets – Keep What Matters
These accounts track your money—focus on the essentials:
☑ Bank – Your main operating accounts
☑ Cash – Physical cash or petty cash
☑ Accounts Receivable – Track client invoices
☑ Undeposited Funds – Optional if you track deposits manually
☐ Deposit – Optional if recording client deposits
❌ Disable: Inventory-related accounts, Leasehold Improvements (unless you rent an office)
Step 2: Liabilities – Keep Only If Applicable
Most small service businesses have fewer liabilities:
☑ Accounts Payable – Track unpaid bills
☑ Unearned Revenue – If clients pay upfront
☑ Sales Tax (GST/VAT) – Only if registered
☑ Income Tax Payable – Track your tax obligations
❌ Disable: Accrued Purchases, Salary Payable, Manufacturing Overhead
Step 3: Equity – Keep It Simple
Equity accounts usually remain unchanged:
☑ Share Capital – No changes needed
☑ Retained Earnings – No changes needed
Tip: Don’t touch these accounts
Step 4: Income – Rename for Small Service-Based Business Owners
Rename income accounts to match the services your business provides:
| Default Account | Suggested Name | Action |
|---|---|---|
| Sales | Consulting Income / Service Income / Retainer Income | ☑ Keep |
| Other Income | Keep relevant categories | ☑ Keep |
| Interest Earned | Keep | ☑ Optional |
| Gain/Loss on FX | Keep if invoicing internationally | ☑ Optional |
| Sales Return | Disable | ❌ |
Tip: Keep names clear so they reflect the services you sell.
Step 5: Cost of Goods Sold – Only If You Subcontract or Resell
Keep these only if your business pays subcontractors or resells materials:
☑ Cost of Goods Sold – If hiring subcontractors or buying materials
☑ Purchases – Same as above
☑ Purchase Return – Same as above
❌ Disable if you don’t subcontract or resell materials
Step 6: Expense Accounts Small Service-Based Businesses Actually Use ✅
Keep only the expenses that apply to your business:
☑ Software/Subscriptions – Rename from Office Expenses if needed
☑ Marketing & Advertising – Promote your services
☑ Telephone – Business phone line
☑ Travel – Client meetings or business trips
☑ Meals & Entertainment – Business-related meals
☑ Utilities – Keep if you have a home office or coworking space
☑ Rent – Office or coworking space rent
☑ Accounting & Audit Fees – Professional services
☑ Insurance – Liability, professional, or business insurance
☑ Bank Charges – Account and payment fees
☑ Stripe Fee – Payment processing costs
☑ Bad Debt – Clients who don’t pay
☑ Miscellaneous Expenses – Small uncategorized costs
❌ Disable: Manufacturing Overhead, Freight In/Out, Workers’ Compensation (if solo), Inventory Adjustment / Finished Goods Inventory, Cleaning (unless office), Write-Off Fixed Assets (if no assets)
✅ Pro Tips for Small Service-Based Business Owners
Keep it simple – Only maintain accounts you actually use
Rename accounts – Make them reflect the services you sell
Disable unnecessary accounts – Reduces clutter and confusion
Review periodically – Adjust accounts as your business grows
Customizing your Chart of Accounts for your service-based business makes bookkeeping faster, clearer, and easier to manage—so you can spend more time serving clients and growing your business.