Purpose of Journal Entries

1. Recording adjustments at month-end or year-end
2. Correcting posting errors from other modules
3. Recording accruals and deferrals (income and expenses)
4. Entering opening balances during system setup
5. Reclassifying transactions between accounts
6. Recording non-standard financial activity (e.g., depreciation, bank fees)

Key Features of Journal Entries

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Journal Entries include a detailed data-entry interface designed to ensure accuracy, flexibility, and full audit control. Key elements include:

1. Journal Entry Header Information

Each journal entry contains essential identification and control fields:

• Journal Entry Number – Automatically or manually assigned reference number
• Date – Transaction date of the journal entry
• Status – Indicates posting state (e.g., Posted)
• Currency Tab – Displays currency used (e.g., USD)
• Memo Tab – Optional area for additional notes

2. Toolbar Actions

The journal entry screen provides quick access actions, including:

• Save – Saves the current entry
• Generate – Creates or generates a reverse entry
• Show – Displays additional entry information
• Attachments – Allows file uploads linked to the entry
• More Actions – Additional system options and controls

3. Journal Entry Controls (Main Tab)

Within the Main tab, users can configure key posting behaviors:

• Adjusting – Marks the entry as an adjusting journal entry
• Do not reconcile – Excludes the entry from reconciliation processes
• Line-based reconciliation – Enables reconciliation at the line level
• Reverse on – Allows scheduling of automatic reversal on a specified date

4. Line Item Entry Grid

Journal Entries use a structured grid for recording debit and credit transactions. Each line includes:

• # – Line number
• Account – Selected General Ledger account
• Account (Cash basis equivalent) – Mapping for cash-basis reporting
• Amount Dr – Debit amount
• Amount Cr – Credit amount
• Company – Associated company (if applicable)
• Memo – Line-level description/memo
• Project – Optional project allocation field
  
• Class - Optional class allocation field
  

How Journal Entries Work

Journal Entries follow standard accounting rules:

• Every transaction affects at least two accounts
• Debits must always equal credits
• Entries post directly to the General Ledger
• Once posted, they impact financial statements immediately

For example:

• A business expense paid from the bank may be recorded as:
  • Debit: Expense Account
  • Credit: Bank Account

This ensures both the source and destination of funds are properly recorded.

How to Create a Journal Entry

To create a journal entry:

1. Navigate to the Accounting module.
2. Select Journal Entries.
3. Click Create → New.
4. Enter the transaction date.
5. Enter a Number for the Journal Entry. If left blank, this will auto-populate with the next sequential number.
   
6. Check the Adjusting checkbox if applicable.
7. To exclude from reconciliation, check the Do Not Reconcile checkbox. 
8. To allow the use of individual lines of the entry as separate entities in Bank Rec, Cloud Banking, or Bank Register, check the Line-based Reconciliation checkbox. 
   
9. If it needs to be reversed, check the Reverse On checkbox and enter the reversal date. 
   
10. Enter or confirm the Currency using the Currency tab if needed.
11. Enter a Memo for the overall transaction context  (optional).
12. Click Add to insert transaction lines. For each line, complete the following columns:
    
    • Account – Select the appropriate General Ledger account
    • Account (Cash basis equivalent) – Automatically mapped for cash-basis reporting
    • Amount Dr – Enter debit amounts
    • Amount Cr – Enter credit amounts
    • Company – Select the related company or entity (if applicable)
    • Memo – Add a description for the line
    • Project – Assign to a project if required
      
    • Class - Assign to a class if required
      
13. Ensure the entry is balanced. The system will not allow posting unless the entry is balanced.
    
14. Click Save to post the Journal Entry.

Once saved, the entry becomes part of the General Ledger and will reflect in financial reports.