Journal Entry
A Journal Entry is an entry made in the general ledger and it indicates the affected accounts.
Last updated
A Journal Entry is an entry made in the general ledger and it indicates the affected accounts.
Last updated
A Journal Entry is a multi purpose transaction where the debit and credit accounts can be selected.
All types of accounting entries other than Sales and Purchase transactions are made using the Journal Entry. A Journal Entry is a standard accounting transaction that affects multiple Accounts and the sum of debits is equal to the sum of credits. A Journal Entry Impacts the main ledger.
Journal Entries can be used for entering expenses, opening entries, contra entries, bank payments, excise entries, etc. For example, booking running expenses, direct expenses like petrol/transport, sundry expenses, adjustment entries, and adjusting invoice amount.
Note: From version-13 onwards we have introduced immutable ledger which changes the way cancellation of accounting entries works in ERPNext. .
To access the Journal Entry list, go to:
Home > Accounting > General Ledger > Journal Entry
Go to the Journal Entry list, click on New.
The default Entry Type will be 'Journal Entry'. This is a general purpose entry type. Visit to know more about entry types.
You can change the Posting Date.
Expand the table, select an Account from which amount is debited.
The above details can be added from a too with the 'From Template' field.
Select the Party Type and Party if it's a Debtor entry.
Add a row where the amount will be credited.
Note that, in the end, total debit and credit amounts should add up to be the same.
Save and Submit.
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.
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. For example, if you're creating a Journal Entry against a specific Sales Invoice. Link this Journal Entry to the invoice. The “outstanding” amount of that invoice will be affected.
Following are the documents that can be selected in the Journal Entry under Reference Type:
Journal Entry
User Remark: Any additional remarks about the entry can be added in this field.
In any submitted Journal Entry, there is a dedicated button to reverse the Journal Entry. On clicking the 'Reverse Journal Entry' button, the system creates a new Journal Entry by reversing debit and credit amount against the respective accounts.
The “Difference” is the difference that remains after summing all debit and credit amounts.
As per double entry accounting system, the total debit should be equal to the total credit.
This should be zero if the Journal Entry is to be “Submitted”. If this number is not zero, you can click on “Make Difference Entry” and the system will automatically add a new row with the amount required to make the total as zero. Select the account to debit/credit and proceed.
A Reference Number can be entered manually and a Reference Date can be set. On entering a Reference Number here, a 'Remark' will be seen, for example:
Note: supplier
Reference #2321 dated 30-09-2019 ₹ 1,000.00 against Sales Invoice ACC-SINV-2019-00064
In th Reference section, the following fields can be entered manually if the bill was recorded offline and not in the ERPNext system. This is only for reference purposes.
Bill No
Bill Date
Due Date
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:
Entry Type
Company
Series
Accounts in Accounting Entries
Is Opening
Pay To / Recd From: The name entered here will show up in the Sales Invoice. This is useful for printing cheques. Go to the print view in the Journal Entry and select the 'Cheque Printing Format'.
Journal Entries can also be titled differently for printing purposes. You can do this by selecting a Print Heading. To create new Print Headings go to:
Home > Settings > Printing > Print Heading
Mode of Payment: Whether the payment was done using Wire Transfer, Bank Draft, Credit Card, Cheque, or Cash. New Modes of Payment can also be created. If a Bank Account is set in Mode of Payment, it will be fetched here when the Mode of Payment is selected.
From Template: When a template is selected, the 'Accounting Entries' table will be emptied first before loading the accounts from the template. You can add more account entries after that.
Let's take a look at some of the common accounting entries that can be done via Journal Entry in ERPNext.
This is a general purpose entry type which can be used for different purposes. Let's see a few examples.
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.
Debit: Expense Account (like Telephone expense).
Credit: Bank or Cash Account.
For crediting employee salaries, 'Journal Entry' type is used. In this case,
Debit: The salary components.
Credit: The bank account.
If a transaction occurs between a parent and child company, or sister companies, or two companies belonging to the same group, this option can be used to make an Inter Company Journal Entry.
This is the same as 'Bank Entry' but the payment is made via Cash Account.
This is a type of entry to easily identify all credit card entries.
This is a document sent by a customer (your Company) to a supplier (your Supplier) when returning goods/items.
You can also create a Debit Note directly from a Purchase Invoice.
"Debit Note" is made for a Supplier against a Purchase Invoice or accepted as a credit note from Supplier when a company returns goods. When a Debit Note is made, the Company can either receive a payment from the Supplier or adjust the amount in another invoice.
Debit: Supplier Account.
Credit: Purchase Return Account.
This is a document sent by a supplier to a customer when returning goods/items.
"Credit Note" is made for a Customer against a Sales Invoice when the company needs to adjust a payment for returned goods. When a Credit Note is made, the seller can either make a payment to the customer or adjust the amount in another invoice.
Debit: Sales Return Account.
Credit: Customer Account.
A debit/credit note is usually issued for the value of the goods returned or lesser.
A Contra Entry is booked when the transaction is booked within the same Company of types:
Cash to Cash
Bank to Bank
Cash to Bank
Bank to Cash
This is used to record withdrawing or depositing money from a Bank Account. When this entry is used, the money does not leave the company unless it is again used to pay for something.
When a Company buys goods from a Supplier, company pays excise duty on these goods to Supplier. And when a company sells these goods to Customers, it receives excise duty. Company will deduct payable excise duty and deposit balance in Govt. account.
When a Company buys goods with Excise duty:
Debit: Purchase Account, Excise Duty Account.
Credit: Supplier Account.
When a Company sells goods 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.
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.
Debit: Bad Debts Written Off
Credit: Customer
Note: There may be regulations in your country before you can write off bad debts.
This entry is useful when moving from an another software to ERPNext during any time of the year. Your outstanding bills, equities etc. can be recorded to ERPNext using this entry type. Selecting type will fetch the Balance Sheet accounts.
Depreciation is when you write off certain value of your assets as an expense. For example if you have a computer that you will use for say 5 years, you can distribute its expense over the period and pass a Journal Entry at the end of each year reducing its value by a certain percentage.
Debit: Depreciation (Expense).
Credit: Asset (the Account under which you had booked the asset to be depreciated).
Note: There may be regulations in your country that define by how much amount you can depreciate a class of Assets.
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Finance Book: You can post this entry to a specific . On leaving this field blank, this Journal Entry will show up in all Finance Books. This field will only be visible if 'Enable Finance Books' under the Fixed Asset Defaults section of the Company master is checked.
Accounting Dimensions: A Project or Cost Center can be linked here to track the costing separately. To know more, .
Bank Account No: If you've added a , the number associated with that bank account will be fetched.
Is Advance: If this is an advance payment by a Customer, set this option to 'Yes'. This is useful when you have linked a 'Reference Type' form to this Journal Entry. Selecting “Yes” will link this Journal Entry to the transaction selected in the 'Reference Name' field. To know more, visit the page.
If the accounts selected are in different currencies, tick the 'Multi Currency' checkbox. If this checkbox is not enabled, you will not be able to select any foreign currencies in the Journal Entry. This will show the different currency and fetch the 'Exchange Rate'. To know more, visit the page.
To learn more go to the page.
Letterhead
You can print your Journal Entry on your company's letterhead. Know more .
Print Headings
Read to know more.
Is Opening: If the Journal Entry is of type 'Opening Entry' this field will be set to 'Yes'. To know more, visit the page.
Expenses (non accruing)
Crediting Salaries
To know more visit the page.
Use this type when making or receiving a payment using a . For example, paying for an entertainment charges etc using the Company's bank account.
To know more, .
To know more, .
To know more, visit the page.
If your Chart of Accounts has accounts with multiple currencies, a Journal Entry of type 'Exchange Rate Revaluation' helps in dealing with this situation. This entry is intended to be created from an Exchange Rate Revaluation form. To know more .
