A Journal Entry is an entry made in the general ledger and it indicates the affected accounts.

A Journal Entry represents a versatile transaction allowing selection of debit and credit accounts.

All accounting entries besides Sales and Purchase transactions are processed using Journal Entries. It’s a standard accounting transaction impacting multiple accounts, where the total debits equal the total credits. Journal Entries affect the main ledger.

They serve various purposes such as recording expenses, opening entries, contra entries, bank payments, excise entries, etc. For instance, booking running expenses, direct expenses like petrol/transport, sundry expenses, adjustment entries, and invoice amount adjustments.

To access the Journal Entry list, go to:

Home > Accounting > General Ledger > Journal Entry

1. How to create a Journal Entry

1. Go to the Journal Entry list, click on New.
2. The default Entry Type will be ‘Journal Entry’. This is a general purpose entry type. V
3. You can change the Posting Date.
4. Expand the table, select an Account from which amount is debited.
5. The above details can be added from a Journal Entry Template too with the ‘From Template’ field.
6. Select the Party Type and Party if it’s a Debtor entry.
7. Add a row where the amount will be credited.
8. Note that, in the end, total debit and credit amounts should add up to be the same.
9. Save and Submit.

Finance Book: You have the option to assign this entry to a particular Finance Book. If left blank, the Journal Entry will be displayed in all Finance Books. This field is only visible when ‘Enable Finance Books’ is enabled in the Fixed Asset Defaults section of the Company master.

1.1 Quick Entry

When creating a Journal Entry, a Quick Entry button can be seen on the top right. This makes creating the Journal Entry a bit easier. Enter the amount, select the accounts, add a remark. This will populate the ‘Accounting Entries’ table with the selected details.

2. Features

2.1 Accounting Entries

1. Accounting Dimensions: A Project or Cost Center can be linked here to track the costing separately. To know more, visit this page.
2. Bank Account No: If you’ve added a Bank Account, the number associated with that bank account will be fetched.
3. Reference Type: If this Accounting Entry is associated with another transaction, it can be referenced here. Select the Reference Type and select the specific document.

Following are the documents that can be selected in the Journal Entry under Reference Type:

1. Sales Invoice
2. Purchase Invoice
3. Journal Entry
4. Sales Order
5. Purchase Order
6. Expense Claim
7. Asset
8. Loan
9. Payroll Entry
10. Employee Advance
11. Exchange Rate Revaluation
12. Invoice Discounting
13. Is Advance: Set this option to ‘Yes’ if the payment is an advance from a customer. This is particularly useful when you have associated a ‘Reference Type’ form with this Journal Entry. Choosing “Yes” will link this Journal Entry to the transaction specified in the ‘Reference Name’ field. For further information, please visit the Advance Payment Entry page.
14. User Remark: Any additional remarks regarding the entry can be entered in this field.

2.2 Reverse Journal Entry

Within any submitted Journal Entry, there exists a dedicated button for reversing the entry. Upon clicking the ‘Reverse Journal Entry’ button, the system generates a new Journal Entry, reversing the debit and credit amounts for the respective accounts.

2.3 Difference Entry

The “Difference” represents the remaining balance after aggregating all debit and credit amounts.

According to the double-entry accounting system, the total debit should always equal the total credit.

For a Journal Entry to be “Submitted,” this difference should ideally be zero. If it’s not, you can click on “Make Difference Entry,” and the system will automatically insert a new row with the necessary amount to balance the totals to zero. You can then select the account to be debited/credited and proceed.

2.4 Referencing

1. Bill No
2. Bill Date
3. Due Date

2.5 Multi Currency entries

If the selected accounts are in different currencies, check the ‘Multi Currency’ checkbox. Without enabling this option, you won’t be able to select any foreign currencies in the Journal Entry. Enabling this checkbox will display the different currencies and retrieve the ‘Exchange Rate’. For further information, please visit the Multi Currency Accounting page.

2.6 Journal Entry Template

From Template field: Selecting an option in this will load details from a Journal Entry Template.

It will fetch and add the following details to the entry:

1. Entry Type
2. Company
3. Series
4. Accounts in Accounting Entries
5. Is Opening

To learn more, go to the Journal Entry Template page.

2.7 Print Settings

Pay To / Received From: The name entered in this field will be displayed on the Sales Invoice. This is particularly helpful for printing cheques. Navigate to the print view in the Journal Entry and choose the ‘Cheque Printing Format.

Letterhead

You can print your Journal Entry on your company’s letterhead.

Print Headings

Journal Entries can have distinct titles for printing requirements. You can achieve this by choosing a Print Heading. To create new Print Headings, navigate to:

Home > Settings > Printing > Print Heading

Read Print Headings to know more.

2.7 More Information

1. Mode of Payment: Indicates the method of payment used, such as Wire Transfer, Bank Draft, Credit Card, Cheque, or Cash. Additionally, new Modes of Payment can be created. If a Bank Account is associated with the Mode of Payment, it will be automatically retrieved when selecting the Mode of Payment.
2. Is Opening: If the Journal Entry is classified as an ‘Opening Entry’, this field will be marked as ‘Yes’. For further details, please refer to the Opening Balance page.
3. From Template: When selecting a template, the ‘Accounting Entries’ table will first be cleared before loading the accounts from the template. Additional account entries can be added thereafter.

3. Journal Entry Types

Let’s take a look at some of the common accounting entries that can be done via Journal Entry in BizCentric.

3.1 Journal Entry

This is a general-purpose entry type which can be used for different purposes.

Expenses (non accruing)

Many times, it may not be necessary to accrue an expense, but it can be directly booked against an expense Account on payment. For example, a travel allowance or a telephone bill. You can directly debit Telephone Expense (instead of your telephone company) and credit your Bank on payment.

1. Debit: Expense Account (like Telephone expense).
2. Credit: Bank or Cash Account.

Crediting Salaries

For crediting employee salaries, ‘Journal Entry’ type is used. In this case,

1. Debit: The salary components.
2. Credit: The bank account.

3.2 Inter Company Journal Entry

This option can be utilized for creating an Inter-Company Journal Entry when transactions take place between a parent and child company, sister companies, or two companies within the same group.

To know more visit the Inter Company Journal Entry page.

3.3 Bank Entry

Use this type when making or receiving a payment using a Bank Account. For example, paying for an entertainment charge etc. using the Company’s bank account.

3.4 Cash Entry

This is the same as ‘Bank Entry’ but the payment is made via Cash Account.

3.5 Credit Card Entry

This is a type of entry to easily identify all credit card entries.

3.6 Debit Note

This is a correspondence issued by your company (the customer) to a supplier (your supplier) when returning goods or items.

Additionally, you can generate a Debit Note directly from a Purchase Invoice.

A “Debit Note” is issued to a supplier in response to a Purchase Invoice, or it’s accepted as a credit note from the supplier when goods are returned. Upon issuance of a Debit Note, the company may either receive a payment from the supplier or adjust the amount in another invoice.

1. Debit: Supplier Account.
2. Credit: Purchase Return Account.

To know more, visit this page.

3.7 Credit Note

This is a correspondence issued by a supplier to a customer when returning goods or items.

A “Credit Note” is generated for a customer against a Sales Invoice when the company needs to make an adjustment for returned goods. Upon issuance of a Credit Note, the seller may either issue a payment to the customer or adjust the amount in another invoice.

1. Debit: Sales Return Account.
2. Credit: Customer Account.

To know more, visit this page.

A debit/credit note is usually issued for the value of the goods returned or lesser.

3.8 Contra Entry

A Contra Entry is recorded when transactions occur within the same company and involve:

1. Cash to Cash
2. Bank to Bank
3. Cash to Bank
4. Bank to Cash

This entry is typically employed to document withdrawals or deposits made into a bank account. When utilizing this entry, the funds remain within the company unless they are subsequently utilized for payments.

3.9 Excise Entry

When a company purchases goods from a supplier, it pays excise duty to the supplier. Conversely, when the company sells these goods to customers, it receives excise duty. The company deducts the payable excise duty and deposits the balance into the government account.

For purchases with excise duty:

• Debit: Purchase Account
• Excise Duty Account. Credit: Supplier Account.

For sales with excise duty:

• Debit: Customer Account.
• Credit: Sales Account, Excise Duty Account.

Note: Applicable in India, might not be applicable for your country. Please check your country regulations.

3.10 Write Offs or Bad Debts

If you are writing off an Invoice as a bad debt, you can create a Journal Voucher similar to a Payment, except instead of debiting your Bank, you can debit an Expense Account called Bad Debts.

1. Debit: Bad Debts Written Off
2. Credit: Customer

Note: There may be regulations in your country before you can write off bad debts.

3.11 Opening Entry

3.12 Depreciation

Depreciation is when you write off certain value of your assets as an expense.

1. Debit: Depreciation (Expense).
2. Credit: Asset (the Account under which you had booked the asset to be depreciated).

To know more, visit the Asset Depreciation page.

Note: There may be regulations in your country that define by how much amount you can depreciate a class of Assets.

3.13 Exchange Rate Revaluation

If your Chart of Accounts includes accounts with various currencies, utilizing a Journal Entry categorized as ‘Exchange Rate Revaluation’ assists in managing this scenario. This entry is designed to be generated from an Exchange Rate Revaluation form. To know more visit the Exchange Rate Revaluation page.

4. Related Topics

1. Inter Company Journal Entry
2. Credit Note
3. Debit Note
4. Sales Invoice
5. Finance Book