Create a journal entry

A journal is used for recording non-regular transactions, for example, the depreciation of a fixed asset or writing off a bad debt. You can also use journal entries to transfer values from one account to another.

When you need to know

Journals are used to move values between ledger accounts that do not affect customers, suppliers or the bank account.

This can be to correct errors, or for some common accounting tasks such as

  • Depreciation of assets

  • Payment of dividends

  • Prepayments and accruals

All journals must follow the principles of double-entry bookkeeping. This means that they must have equal debit and credit values. For every debit balance, there must be a corresponding credit balance. Each journal can be include several debit or credit values, as long as the overall totals match.

Using control accounts with journals

Control accounts are ledger account that we set up and use by default for most types of transaction. We use them to automatically record details of some transactions to makes sure your accounts are accurate and cut down on errors.

For example, when you save a sales invoice, the total value of the invoice is automatically recorded against the Trade Debtors and the VAT is automatically recorded against VAT on Sales ledger account.

If you try to choose a control account when entering a journal, we'll show you a warning message, so you can check that you've chosen the correct ledger account and are entering the journals correctly.

Ledger Account Warning
Trade Debtors Journals posting direct to your Trade Debtors will not be reflected on your Aged Debtors Reports.
Trade Creditors Journals posting direct to your Trade Creditors will not be reflected on your Aged Creditors Reports.
VAT on Sales Journals posting to VAT on Sales will only be included on your VAT Return if you select the ‘include on VAT Return’ option.
VAT on Purchases Journals posting to VAT on Purchases will only be included on your VAT Return if you select the ‘include on VAT Return’ option.
*VAT Liability * Journals posting to the VAT Liability will not be reflected on your VAT Return.
VAT on Sales – Holding Account Journals posting to the VAT on Sales Holding will not be reflected on your VAT Return.
VAT on Purchases – Holding Account Journals posting to the VAT on Purchases Holding will not be reflected on your VAT Return.

 

Enter a journal

  1. Go to More, then Journals, and select New Journal.

  2. Enter the date and a suitable Reference and Description. This helps you find and identify the journal later. Complete the following information:

  3. Complete at least 2 lines. Don't forget the total of the debits and credits must match.

    Details If required, enter details for the journal.
    Ledger Account * Select the nominal ledger account you want to use for the first line of the journal.
    Include on VAT Return? Choose whether you want to include this journal on your VAT Return.
    Debit If the journal line is for a debit value, enter the value here and leave the credit as 0.00.
    Credit If the journal line is for a credit value, enter the value here and leave the debit as 0.00.
  1. Check the total value of credits and debits are the same, then select Save.

Quick tips

  • Insert a new row above an existing journal entry line - hover over the icon that appears next to the relevant journal line then click the Insert row above button. When the blank entry line appears, enter the relevant journal information.

  • Copy a row - hover over the icon that appears next to the relevant journal line, then click the Copy row button. When the duplicate entry line appears, edit the journal information as required.

  • Delete a row - hover over the icon that appears next to the relevant journal line you want to delete, then select the Remove row button.

  • Rearrange the order the rows - hover over the icon that appears next to the journal line you want to move, then drag and drop the journal line into the required position. Repeat this step for any other journal lines you want to move until you’re happy with the ordering.

Attach files

If you want to attach a file, for example, a copy of a receipt, select the Attachment button then select Upload files. Then find and select the relevant file.


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