To add a nominal code from within the Chart of Accounts (accessible by going to Settings > Chart of Accounts) use the text box at the bottom to enter in the following.

• Code – This is the nominal code of the account you are adding.  It needs to be numbers only and must not be currently in use.
• Name – This is the label of the nominal code that you are setting up and will appear in your lists.
• Type –this is the type and classification of the nominal code.  The selection here will affect where and how the balance is reported on reports including your balance sheet and profit and loss.
  • Turnover – this is money taken by a business and is treated as revenue.  This is usually used for sales.
  • Cost of Sale– this is money spent (overheads) on generating revenue.  A good example could include a wholesale price of product that you will resell.
  • Expenditure – compared to cost of sales, this is operational or administrative expenditure.
  • Fixed Asset – this is an asset that cannot be easily converted into cash.  Examples would include property, vehicles, cash registers and so on.
  • Current Asset/Liability – This means that the account should be treated as a current and variable asset when the balance is a positive, and as a debt (known as a liability) when the balance is negative.  This is also used for bank accounts.  When your bank balance is positive it’s an asset, however when you’re overdrawn you’re in debt and it’s a liability.
  • Capital & Reserves - Capital is the money shareholders have contributed to the company.  Reserves are the profits earned and other resources received by the company that have been kept for the benefit of shareholders.
• Area – This is where this nominal code can be used.  By default, the nominal code will be restricted for use in this area only unless Advanced Settings > Access to Nominal Codes is enabled.
  • Sales Type – This nominal code can only be used in the Sales area on invoices.
  • Outgoing Type – This nominal code can only be used in the Purchases area on purchase receipts.
  • Bank transaction Type – This nominal code can only be used in the bank area on bank transactions.

When you’re ready, click the Add New Code button.  You’re then taken to the nominal details page where you can set any advanced details including where to record it on your self-assessment, if to set it as pre-payments or accruals or if to archive it.