Account Category

[sanjay]

@Aadhil_P_M first of all, thank you so much for adding this missing feature in COA.

Currently Account Category is not linked to Root Type thus its difficult to identify the root type of Account Category for financial data analysis.

I have below suggestions to make this feature more robust:

1. Add Root Type in Account Category doctype
2. Do not allow user to create/update Account Category by enabling User Cannot Create option in doctype properties.
3. In Account doctype:
   • toggle this field based on is_group (no need to show this field if its a group account)
   • for ledger account, filter Account Category based on root_type for selection

See below mapping:

Root Type	Account Category
Asset	Cash and Cash Equivalents
Expense	Cost of Goods Sold
Liability	Current Tax Liabilities
Expense	Finance Costs
Asset	Intangible Assets
Income	Investment Income
Liability	Long-term Borrowings
Asset	Long-term Investments
Liability	Long-term Provisions
Expense	Operating Expenses
Asset	Other Current Assets
Liability	Other Current Liabilities
Expense	Other Direct Costs
Asset	Other Non-current Assets
Liability	Other Non-current Liabilities
Income	Other Operating Income
Liability	Other Payables
Asset	Other Receivables
Equity	Reserves and Surplus
Income	Revenue from Operations
Equity	Share Capital
Liability	Short-term Borrowings
Asset	Short-term Investments
Liability	Short-term Provisions
Asset	Stock Assets
Asset	Tangible Assets
Expense	Tax Expense
Liability	Trade Payables
Asset	Trade Receivables

[Smit_Vora]

Thanks for the suggestion. It’s implemented here:

feat: enhance account category with root type

credits: @Abdeali

[sanjay]

@Abdeali thank you so much for this.
Highly appreciated.

I have one more suggesion to add a new doctype named as Sub Root Type (in read_only mode) and link it to both in COA and Account Category.
Introducing a Sub Root Type in the Chart of Accounts (COA) and Account Category will enhance the efficiency and accuracy of Financial Analysis..

I can develop and add this feature if everyone agrees.

Root Type	Sub Root Type
Expense	Indirect Expense
Expense	Direct Expense
Income	Indirect Income
Income	Direct Income
Liability	Other Liability
Liability	Current Liability
Liability	Long Term Liability
Asset	Loan and Advance
Asset	Other Asset
Asset	Investment
Asset	Current Asset
Asset	Fixed Asset
Equity	Shareholder Current Account
Equity	Reserve and Surplus
Equity	Share Capital

[sanjay]

Account Category after adding Root Type and Sub Root Type

Root Type	Sub Root Type	Account Category
Asset	Current Asset	Cash and Cash Equivalents
Asset	Current Asset	Other Current Assets
Asset	Current Asset	Other Receivables
Asset	Current Asset	Short-term Investments
Asset	Current Asset	Stock Assets
Asset	Current Asset	Trade Receivables
Asset	Loan and Advance	Loan and Advance
Asset	Fixed Asset	Fixed Asset
Asset	Investment	Long-term Investments
Asset	Other Asset	Intangible Assets
Asset	Other Asset	Other Non-current Assets
Asset	Other Asset	Tangible Assets
Equity	Reserve and Surplus	Reserves and Surplus
Equity	Share Capital	Share Capital
Equity	Shareholder Current Account	Shareholder Current Account
Expense	Direct Expense	Cost of Goods Sold
Expense	Direct Expense	Operating Expenses
Expense	Direct Expense	Other Direct Costs
Expense	Indirect Expense	Finance Costs
Expense	Indirect Expense	Tax Expense
Income	Direct Income	Other Operating Income
Income	Direct Income	Revenue from Sales of Services
Income	Direct Income	Revenue from Sales of Goods
Income	Direct Income	Revenue from Operations
Income	Indirect Income	Investment Income
Liability	Current Liability	Current Tax Liabilities
Liability	Current Liability	Other Current Liabilities
Liability	Current Liability	Other Payables
Liability	Current Liability	Short-term Borrowings
Liability	Current Liability	Short-term Provisions
Liability	Current Liability	Trade Payables
Liability	Other Asset	Other Non-current Liabilities
Liability	Other Liability	Long-term Borrowings
Liability	Other Liability	Long-term Provisions

After this, one can easily do Ratio and Other Financial Analysis.

[Smit_Vora]

Currently subgroup type if added will just act as a additional data field, which is not used.
This can be easily achieved by adding a custom field (if required).

In addition, the existing patent account feels more like a root subtype as you suggest. Idea is to keep the account configuration simple to begin with. And so we are not prioritizing this right now.

[sanjay]

Given the current COA configuration, how can current ratio or working capital be calculated, considering that neither Account Type nor Account Category includes classifications that support these calculations?

[Smit_Vora]

You can select more than one account category and use formulas.
eg: following is the screenshot from the template you can configure.

[sanjay]

Thank you @Smit_Vora for the information.

Let me check if this helps me to achieve my objective of doing Financial Analysis using AI in simplest possible way by extracting data from ERPNext database and without much hard coding of ledger mapping.

[sanjay]

This is what I am currently working upon.