How many accounts should I have in my chart of accounts?

It’s an art. You don’t want so many accounts that it becomes administratively burdensome to select the account from such a huge list of accounts, but you want enough accounts that provide you with financial data that you want to track. For example, if you want to track how much you spend on billboard advertising versus social media advertising, then go ahead and create two accounts - one for billboards and one for social media. Keep in mind that it’s only as good as how you use it - make sure you categorize each advertising expense to the right account in order for it to be meaningful. But if you are only concerned with how much you spend on advertising in total, regardless of the advertising medium, then keep it simple and just have one account for advertising.

It is very easy to modify the list of accounts as you go. You can create new accounts, make accounts inactive, and merge accounts together. But when you add and inactivate accounts - that happens on a go-forward basis. If you want to change historic transactions then you'd have to go back and reverse each transaction one-by-one (not fun!). So it does help to think strategically now and anticipate what types of expenses you want to track.

Lastly you want to consider consistency. One of the values of a chart of accounts is trend analysis - being able to compare results from month to month and year to year. If you're constantly changing your accounts around, then you'll lose the value of the information that your accounts provide.

As a general guide, many companies start out with ~50-75 accounts when they begin their journey.