Setup of Company in Peachtree

Setup of Company

After the start of the Peachtree Program you have to set up a new company before entering data. For this click on File menu and select New Company

After you have selected a new company following introductory screen will appear to guide you the rest of the process and tell you what informations are required for setting up of the company.

You have to click the Next button. After that you will find the following screen. Hereyou will decide about the Peachtree Product.

Again by clicking Next button you will find the following screen. Here you will type the Company name, Address, Telephone, fax number, business type, website and email address. These information will be printed on every report. This information  may be edited after the creation of the company.

After typing all the above information you will be clicking the Next button and following window will appear. 

You need to establish how your new company will be set up:

Use a sample business type that closely matches your type of company: Select this option to copy basic setup information, particularly a chart of accounts, from a sample company. You can select either a simplified chart of accounts that contains only the basic accounts you need to get started; or you can choose a detailed chart. Depending on which version of Peachtree you are using your selections will vary.  You can modify the accounts later, according to your needs.

Copy settings from an existing Peachtree company: Select this option if you want to copy setup information from another Peachtree company or you are rebuilding a Peachtree company.

Convert a company from another accounting program: Select this option if you want to import company data from some other program.

Build your own company: Select this option if you want to create a company from scratch. This option is only recommended for experienced users who are comfortable setting up accounting information. For users coming from a paper ledger, it is recommend that they select a business type (see above) that most closely matches their existing chart of accounts and then modify it as they have need.

If you select this option, make sure you set up your chart of accounts prior to setting up any other part of the company.

After you have decided about the method to create a company click Next. In the next window you will have to decide about the accounting method. The available accounting methods are Accrual and Cash.

Accrual Accounting: Income is recorded as you invoice customers, and expenses are recorded when you receive bills from vendors, regardless of when cash is actually exchanged. This presents a truer picture of income and expenses. Most companies use this method.

Cash-Basis Accounting: Income is recorded when cash (checks, money orders, or currency) is received, and expenses are recorded when paid. However, unpaid credit sales and purchases do not show on ledgers, which can present a misleading picture of income and expenses.

After deciding about the accounting method click next button. Following window will appear. Here you will be deciding about the Posting method. The software provides you two posting methods i.e. Real Time and Batch.

Real-Time Posting: Transactions are posted to the journals and the general ledger as they are entered and saved. This method can save you time and is best for most business and network environments. Most companies use this method.

Batch Posting: Transactions are saved by the program and then posted in a group. When you use batch posting, you can print registers and check the batch of transactions before posting them to the journals.

You can switch posting methods at any time.

To continue setting up the company click Next following window will appear. Here chose an accounting period structure. Normally it is 12 month accounting periods per year.

Again click Next button and choose the first period (Month) of the fiscal year.

After clicking Next button you will find following finish window and buy clicking finish button the software will create you company.

General Ledger

Now you have setup your company in Peachtree, it is recommended to establish Chart of accounts, General Ledger Defaults and Beginning Balance if any.

To establish the charts of accounts click the Maintains menu and select “Chart of Accounts...” 

The following window will displayed

Here you have to type Account ID, Description and the most Important Account Type.

Enter an account ID and description for the account. The account ID determines how the account is identified and sorted in the chart of accounts list and the General ledger account is displayed as typed in description. Most charts of accounts are set up with specific account types grouped together.

Account types define how the account will be grouped in reports and financial statements. They also control what happens during fiscal year-end.

General Ledger accounts are assigned types on the General tab of the Maintain Chart of Accounts window. Select an account type from the drop-down list and select Save to save the account. The account type should be selected carefully. If you are entering a Revenue account then its type will be Income so on. A simplified chart of account with Account ID, Description and Account Type is given at the end of the chapter.

You can enter the Beginning Balances on the General tab. Select the Beginning Balances button. Peachtree displays the Select Period window.

Select the period in which you want to enter beginning balances. You can select from previous, current, or future periods.

Select OK. Peachtree displays the Chart of Accounts Beginning Balances window.

Click or tab to any of the white cells in the grid to add an amount. (The gray cells are for viewing purposes only.)

Enter all the beginning balances for the accounts. Scroll the list box to make sure the account amounts are correct.

If you are out of balance in the Beginning Balances for General Ledger Accounts window, Peachtree displays a warning message indicating that an equity account will be created (or updated) to contain the difference or out-of-balance amount.

This account will be named Beginning Balance Equity, and its type is Equity-Doesn't Close. This account does not appear in the Beginning Balances window, but it will appear in the list of accounts and on financial statements and general ledger reports.

Try to find the reason for the out-of-balance situation, and correct it if possible. (Select Cancel when Peachtree displays the warning message.) If you are entering beginning balances from financial statements supplied by your previous accounting system or by your accountant, you most likely made an error in data entry. Make sure you didn't leave out an account or balance and that you entered all amounts correctly.

When done close the window.

Add a New Account in G/L Beginning Balances

In the Beginning Balances window accessed from the Maintain Chart of Accounts window, select the New button. Peachtree displays the Enter New Account window.

Enter an account ID and description for the account and also chose the appropriate account type and select OK.

Delete an Account from the Chart of Accounts

In order to delete an account from the chart of accounts, there must be no transactions posted to the general ledger that reference the account ID. If an account has a nonzero balance, you must delete or remove transactions associated with it. These can include beginning-balance entries.

If an account has a nonzero balance, you can enter an adjusting G/L transaction in the General Journal to bring the account's balance to zero. Then, after two year-end closings, you can purge or delete the account.

To make the account inactive

You can make the account inactive to ensure that no further transactions are associated with it. Then after two year-end closings, you can purge the account.

From the Maintain menu, select Chart of Accounts. Peachtree displays the Maintain Chart of Accounts window.

Select the account you want to make inactive. To display a list of existing accounts, type ? in the G/L Account ID field, or select the Lookup button.

Select the Inactive check box to the right of the account ID. (There is an mark in the check box when it is selected.)

Sample Charts of Accounts

100	Current Assets	Account Type
105	Cash in bank	Cash
109	Petty cash	Cash
110	Accounts receivable	Accounts Receivable
118	Allowance for doubtful accts	Accounts Receivable
120	Inventory	Inventory
130	Prepaid expenses	Other Current Assets
140	Property and Equipment
141	Land	Fixed Assets
142	Building	Fixed Assets
143	Leasehold improvements	Fixed Assets
144	Furniture and fixtures	Fixed Assets
145	Equipment	Fixed Assets
146	Automotive equipment	Fixed Assets
150	Accumulated Depreciation	Accumulated Depreciation
152	Depr-building	Accumulated Depreciation
153	Depr-leasehold improvements	Accumulated Depreciation
154	Depr-furniture and fixtures	Accumulated Depreciation
155	Depr-equipment	Accumulated Depreciation
156	Depr-automotive equipment	Accumulated Depreciation
160	Other Assets
162	Long-term investments	Other Assets
168	Due from officer	Other Assets
200	Current Liabilities	Account Type
202	Notes payable	Other Current Liability
210	Accounts payable	Accounts Payable
212	Accrued expenses payable	Other Current liability
220	Wages payable	Other Current liability
221	Income Tax Payable	Other Current liability
222	Sales Tax Payable	Other Current liability
250	Long-Term Liabilities
252	Mortgage payable	Long Term Liability
261	Long-term note payable	Long Term Liability
271	Due to officer	Long Term Liability
300	Stockholders’ Equity
381	Common stock	Equity does not close
390	Retained earnings	Equity retained earning
392	Dividends	Equity gets close
400	Revenue
410	Sales	Income
500	Cost of Sales
510	Cost of goods sold	Cost of Sale
600	Operating Expenses
610	Salaries and wages	Expense
621	Advertising	Expense
622	Amortiz leasehold improv.	Expense
623	Automobile expense	Expense
626	Bad debts expense	Expense
627	Bank service charge	Expense
632	Commissions	Expense
638	Depreciation expense	Expense
640	Dues and subscriptions	Expense
643	Entertainment	Expense
650	Insurance	Expense
655	Interest expense	Expense
657	Licenses and permits	Expense
659	Miscellaneous expense	Expense
660	Office expense	Expense
666	Postage	Expense
667	Professional fees	Expense
668	Rent expense	Expense
669	Rental of equipment	Expense
672	Repair and maintenance	Expense
690	Telephone	Expense
691	Travel	Expense
695	Utilities	Expense
700	Other Income (Expense)
710	Interest income	Income
790	Miscellaneous income	Income
895	Income tax expense	Expense