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Journal Entries

Journals are used to account for unusual entries such as payroll and loan repayments. It can be quite difficult to get them right so be sure to speak to your accountant before adding new entries. To add a manual journal, click the "Tasks" icon, then "Journals". Then click on the "plus icon" to add a new journal.

Journals

The add journal entry screen is then displayed. Complete the following fields as required:

Contact: This is an optional field. This field will only need to be completed if you are entering a manual journal which relates to a customer or a supplier.

Narrative: Within this field outline details of what the particular journal you are recording relates to. Ensure to be clear and concise within this field.

Reference: Apply your internal reference for the journal entry

Account: From the drop down list select the account you wish to increase/decrease. If a particular account does not appear in this drop down list then you will need to add it through the chart of accounts

Net Amount: This refers to the amount you wish to record through the journal entry net of taxes

Tax Rate: Using the drop down list, select the rate of tax you wish to apply to the journal. In general, journal entries are recorded net of taxes. It is rare that you would capture tax through a journal entry.

Type: Using the drop down menu, select if you want to increase or decrease the account. You will be unable to save this journal if total debits do not equal total credits.

Tips On Entering Journals

Each debit must have a corresponding credit i.e. for each debit entry made there must always be a credit entry. Thus, journals must always be balanced.

Manual Journals are typically used to record prepayments, accruals and wages etc 

Prepayments are expenses paid in one period yet relate to another period in the future, prepayments are classified as assets on the balance sheet

Accruals - ex penses relating to the current period for which an invoice has not yet been received. Accruals are classifed as liabilities on the balance sheet

Ensure prepayments and accruals are recorded net of tax. In general, journals are recoreded net of tax.