A chart of accounts UAE businesses use is the complete, organised list of every account in which a company records its financial transactions. It is the backbone of the accounting system: every sale, purchase, salary payment, VAT entry and bank transfer is posted to one of these accounts. A well-designed chart of accounts makes bookkeeping faster, financial statements clearer and VAT and corporate tax reporting far easier.

Many small businesses in Dubai, Abu Dhabi, Sharjah and the free zones start with the default list that comes with their accounting software and never adapt it. Over time, this leads to messy reports, misclassified expenses and hours wasted at year-end. This guide explains the chart of accounts structure, the five main accounting account categories, UAE-specific accounts you should include, and a practical chart of accounts example you can adapt for your business.

What Is a Chart of Accounts?

A chart of accounts (often shortened to COA) is a structured index of all the general ledger accounts a business uses. Each account usually has:

• An account code: a number that identifies the account and its category, such as 1010 or 6100.
• An account name: a clear description, such as “Cash at Bank – Emirates NBD” or “Office Rent”.
• An account type: asset, liability, equity, revenue or expense.
• A description (optional): guidance on what should be recorded in that account.

Think of the chart of accounts as the filing cabinet of your finances. Each drawer is a category, and each folder inside it is an individual account. When the cabinet is well organised, anyone can find what they need. When it is not, important information gets lost.

How Does a Chart of Accounts Help Financial Reporting?

Your financial statements are built directly from your chart of accounts. Asset, liability and equity accounts flow into the balance sheet, while revenue and expense accounts flow into the profit and loss statement. A clear accounting chart of accounts helps businesses:

• Produce accurate balance sheets and profit and loss statements.
• Prepare VAT returns more efficiently by separating standard-rated, zero-rated and exempt transactions.
• Support corporate tax calculations by identifying non-deductible or partially deductible expenses.
• Track profitability by product, service, branch or department.
• Compare performance across months and years consistently.
• Give auditors, banks and investors reports they can understand quickly.

In the UAE, businesses generally prepare financial statements in line with International Financial Reporting Standards (IFRS), and smaller businesses may be able to use IFRS for SMEs depending on their circumstances. A chart of accounts aligned with IFRS categories makes this much simpler.

What Are the Five Main Account Categories?

Every chart of accounts structure is built on five core accounting account categories:

Category	What It Represents	Financial Statement	Typical Code Range
Assets	Resources the business owns or controls	Balance Sheet	1000–1999
Liabilities	Amounts the business owes to others	Balance Sheet	2000–2999
Equity	The owners’ interest in the business	Balance Sheet	3000–3999
Revenue	Income earned from business activities	Profit and Loss	4000–4999
Expenses	Costs incurred to run the business and earn revenue	Profit and Loss	5000–9999

These categories follow the basic accounting equation: Assets = Liabilities + Equity. Revenue increases equity, while expenses reduce it.

What Are Asset and Liability Accounts?

Asset Accounts

Asset accounts are usually split into current assets (expected to be used or converted to cash within 12 months) and non-current assets (held for longer periods). Common examples include:

• Petty cash and bank accounts
• Accounts receivable (trade debtors)
• Inventory
• Prepaid expenses, such as prepaid rent and insurance
• Security deposits, such as rent deposits and utility deposits
• VAT recoverable (input VAT)
• Furniture, equipment, vehicles and leasehold improvements
• Accumulated depreciation (shown as a reduction against fixed assets)

Liability Accounts

Liability accounts are likewise split into current and non-current liabilities. Common examples include:

• Accounts payable (trade creditors)
• Accrued expenses and accrued salaries
• VAT payable (output VAT)
• Corporate tax payable
• Short-term loans, overdrafts and credit cards
• Customer advances and deposits received
• Provision for employees’ end-of-service benefits
• Long-term bank loans

Chart of Accounts Example for a UAE Small Business

Below is an illustrative chart of accounts example for a small UAE trading and services company. It is a starting framework, not a mandatory template. Your accountant should adapt it to your business activities, legal structure and reporting needs.

Code	Account Name	Category	Example Use
1000 – Assets
1010	Petty Cash	Current Asset	Small office cash expenses
1020	Bank – Current Account (AED)	Current Asset	Main operating bank account
1030	Bank – USD Account	Current Asset	Foreign currency receipts and payments
1040	Payment Gateway Clearing	Current Asset	Online sales awaiting settlement
1100	Accounts Receivable	Current Asset	Unpaid customer invoices
1150	Post-Dated Cheques Received	Current Asset	Customer PDCs not yet due
1200	Inventory	Current Asset	Stock held for sale
1300	Prepaid Rent	Current Asset	Rent paid in advance by cheque
1310	Prepaid Insurance	Current Asset	Annual medical or business insurance
1350	Security Deposits	Current/Non-current Asset	Rent and utility deposits
1400	VAT Input (Recoverable)	Current Asset	VAT paid on eligible purchases
1500	Furniture and Fixtures	Non-current Asset	Office furniture
1510	Computers and IT Equipment	Non-current Asset	Laptops, servers, printers
1520	Motor Vehicles	Non-current Asset	Company vehicles
1590	Accumulated Depreciation	Contra Asset	Total depreciation charged to date
2000 – Liabilities
2010	Accounts Payable	Current Liability	Unpaid supplier invoices
2050	Post-Dated Cheques Issued	Current Liability	Supplier or rent PDCs not yet cleared
2100	Accrued Expenses	Current Liability	Expenses incurred but not yet invoiced
2110	Salaries Payable	Current Liability	Payroll due to staff
2200	VAT Output (Payable)	Current Liability	VAT charged on sales
2210	VAT Control / Settlement	Current Liability	Net VAT due to or from the FTA
2250	Corporate Tax Payable	Current Liability	Corporate tax due
2300	Customer Advances	Current Liability	Deposits received before delivery
2400	Credit Card Payable	Current Liability	Business credit card balances
2500	Provision for End-of-Service Benefits	Non-current Liability	Gratuity obligations to employees
2600	Long-Term Bank Loan	Non-current Liability	Term financing
3000 – Equity
3010	Share Capital	Equity	Capital contributed by shareholders
3100	Shareholder Current Account	Equity	Owner funds introduced or withdrawn
3200	Retained Earnings	Equity	Accumulated profits from prior years
4000 – Revenue
4010	Sales – Standard Rated (5%)	Revenue	Local taxable sales
4020	Sales – Zero Rated	Revenue	Qualifying exports
4030	Sales – Exempt	Revenue	Exempt supplies, if applicable
4100	Service Income	Revenue	Consulting or service fees
4900	Other Income	Revenue	Interest, foreign exchange gains
5000 – Cost of Sales
5010	Cost of Goods Sold	Expense	Cost of inventory sold
5020	Freight and Customs Duty	Expense	Import and delivery costs
6000 – Operating Expenses
6010	Salaries and Wages	Expense	Monthly payroll
6020	End-of-Service Benefits Expense	Expense	Gratuity provision for the period
6030	Visa and Labour Costs	Expense	Visas, Emirates ID, medicals
6100	Office Rent	Expense	Monthly rent expense
6110	Utilities (DEWA/ADDC/SEWA)	Expense	Electricity and water
6200	Trade Licence and Government Fees	Expense	Licence renewals and approvals
6300	Marketing and Advertising	Expense	Digital ads, printing, events
6400	Professional Fees	Expense	Accounting, audit, legal
6500	Bank Charges and Payment Fees	Expense	Bank and gateway fees
6600	Depreciation Expense	Expense	Periodic depreciation charge
6700	Entertainment Expense	Expense	Client entertainment (track separately for tax)
8000 – Tax
8010	Corporate Tax Expense	Expense	Corporate tax charge for the year

Why UAE Businesses Need Country-Specific Accounts

A generic template downloaded online often misses accounts that matter in the UAE accounting structure. Pay particular attention to:

• VAT accounts: separate input VAT, output VAT and a VAT control account so you can reconcile each VAT return quickly. Splitting sales into standard-rated, zero-rated and exempt accounts also reduces errors when completing the return.
• Corporate tax accounts: a corporate tax payable account and a tax expense account. It also helps to track expenses that may be fully or partially non-deductible, such as certain entertainment costs, in their own accounts.
• End-of-service benefits: a provision account so gratuity obligations are recognised over time, not only when an employee leaves.
• Post-dated cheques: PDCs are widely used in the UAE for rent and supplier payments, and tracking them separately helps cash control.
• Visa and government costs: these are significant for UAE employers and deserve their own accounts rather than being buried in “general expenses”.
• Multi-currency bank accounts: many UAE businesses trade in USD, EUR or other currencies alongside AED.

How Do You Create a Chart of Accounts?

Follow these steps to build a practical chart of accounts for small business use in the UAE:

Step 1: Understand Your Business Activities

List how your business earns money and where it spends money. A trading company needs inventory and cost of sales accounts, while a consultancy may need more detailed service income and project cost accounts.

Step 2: Choose a Numbering System

Use a consistent numbering system such as four-digit codes, with each first digit representing a category. Leave gaps between numbers (for