Right arrow / chevron
Right arrow / chevron
Journal Entries

Journal Entries

Publicado el
Published on
September 6, 2023
Actualizado en
Updated on
December 20, 2023

Journal entries are organized in a book called the "journal" and are then summarized in the company's "ledger," which shows the balances of each account. This process is known as the double-entry system and forms the foundation of accounting. These entries then serve as the basis for preparing the company's financial statements.

1. General Journal

In Cashflow, the "Journal and Entries" option (General Journal) allows you to view and manage all journal entries. Here, you can view all transactions, along with their details, and use filtering and search tools to find specific transactions.

In the journal, you can find three types of entries:

  1. Automatic (Auto)
    These are generated automatically when you perform operations in the different transaction modules in the system.
  2. Manual
    These are entries made manually, usually by an accountant, to record adjustments in the accounting.
  3. Reversals
    These are entries that have been reversed.

To access the general ledger, go to the main menu, select Accounting, and then click on Journal and Entries.

2. Recording a Journal Entry

To manually record a journal entry:

  1. In the main menu, go to Accounting, and then click on Journal and Entries.
  2. In the list of Entries, click on the (+) button.
  3. In the entry form, define the description, currency, and date.
  4. In the account section, on each line, select the account to affect and its amount in debit or credit according to the entry.
  5. If you need to add more lines, simply click on the (+) button below the list and repeat the previous step.
  6. Finally, you can define additional notes in the Notes field.
  7. Click Save to save the document.
Double-Entry Principle in Entries
Remember, each journal entry in Cashflow follows the double-entry principle. Each transaction impacts at least two accounts, and debits must always equal credits. This balance ensures the accuracy of financial records and maintains the accounting equation (Assets = Liabilities + Equity) in equilibrium.

3. Duplicating a Journal Entry

If you need to repeat the same entry, you can duplicate it. To duplicate a journal entry, follow these steps:

  1. In the main menu, select Accounting, and then click on Journal and Entries.
  2. Find the entry you want to duplicate in the list.
  3. Click on the action menu (the three horizontal dots) next to that entry.
  4. Choose the Duplicate Entry option.
  5. You will be asked to confirm the action. Once you do, the entry form will open.
  6. Make any necessary adjustments to the duplicated entry.
  7. Click Save to save the changes.
Limitation on Duplicating Entries
Please remember that you can only duplicate manual entries. Automatic entries cannot be duplicated as they are linked to auxiliary transactions. If you need to replicate an automatic entry, you must perform the transaction in the corresponding module.

4. Void a Journal Entry

Sometimes, you may need to cancel a journal entry for various reasons, such as errors or accounting adjustments. To cancel an entry, follow these steps:

  1. In the main menu, select Accounting, and then click on Journal and Entries.
  2. Find the entry you want to cancel in the list.
  3. Click on the action menu (the three horizontal dots) next to that entry.
  4. Choose the Void option.
  5. You will be asked to confirm the action.
Restrictions and Control of Reversals
It's important to note that only manual entries can be reversed in Cashflow. When you reverse a manual entry, the system automatically generates a reversal entry. This new entry precisely offsets the original transaction, ensuring the integrity of your accounting data and facilitating control and auditing tasks. Automatic entries cannot be reversed directly as they are linked to auxiliary transactions.

5. List of Entries and Options

The options in the action menu for each adjustment entry are:

  • Preview
    This option allows you to preview the entry in a print format. It is useful for keeping physical copies of the entries.
  • Duplicate
    This option allows you to duplicate a manual entry. Useful when you need to enter the same entry periodically.
  • Attach File
    Allows you to add files related to the entry, such as supporting documents, attachments, and more.
  • Void
    If you need to void an entry, you can use this option. Voiding the entry will record a reversal entry that counteracts the original.
Please note that depending on the type of entry, some options in the menu may not be available.

Tips & Best Practices

Managing journal entries in Cashflow can be simple and effective if you follow these basic tips:

  1. Ensure Data Accuracy
    Before recording, duplicating, or voiding any journal entry, verify that all details are correct. This includes the amount, the accounts involved, and the transaction description.
  2. Use Search and Filtering Functions
    These tools are particularly useful when you need to find a specific journal entry among a large number of transactions. You can search for entries by date, amount, description, and more.
  3. Use the Duplicate Entry Feature
    If you find yourself recording the same transaction periodically, consider using the duplicate entry function. This can save you time and effort.
  4. Remember Entry Voiding Restrictions
    Only manual entries can be voided. When voiding an entry, a reversal entry is automatically generated. If an automatic entry needs adjustment, it must be done through the corresponding originating transaction.
  5. Use the File Upload Feature
    This function is very useful for maintaining a digital record of physical documents related to your journal entries. You can upload invoices, receipts, and other important documents to keep them accessible in one place.
  6. Remember the Importance of Double-Entry
    Each journal entry must follow the double-entry principle, meaning that every transaction should affect at least two accounts, and debits must equal credits. This balance is essential to maintaining the accuracy of your accounting records.

By following these tips, you can effectively manage your journal entries in Cashflow, ensuring the accuracy and integrity of your accounting.

Common Issues

Here are some common problems and how to solve them:

  1. Errors in Debit or Credit Amounts
    A common mistake is not correctly balancing the debit and credit amounts in an entry. Remember that in Cashflow, each entry must follow the double-entry principle, meaning that debit and credit amounts must be equal.
  2. Misclassification in Entries
    When recording a journal entry, it's possible to mistakenly select the wrong account for debit or credit. This can lead to errors in account balances and, consequently, financial reports. Always double-check the accounts before saving the entry.
  3. Incorrect Data Entry
    A common error is entering incorrect amounts, dates, or descriptions. These errors can lead to confusion when reviewing entries and can distort the representation of the company's financial position. It's always a good practice to review the data before finalizing the entry.
  4. Failure to Record Necessary Adjustment Entries
    Often, necessary adjustment entries to correct accounting errors or reflect transactions not automatically recorded are overlooked. Ignoring these entries can result in inaccurate financial statements.
  5. Voiding Entries Carefully
    Some users may attempt to void entries without fully understanding the process or implications. For example, voiding a manual entry in Cashflow automatically generates a reversal entry, which may not be what the user intended. It's always recommended to understand how voiding work before carrying them out.
  6. Excessive Reliance on Automatic Entries
    While automatic entries can save time, it's also important to remember that not all transactions are captured automatically. It's essential to be aware of transactions that require manual entries and ensure they are recorded correctly.
  7. Can't Find a Specific Entry
    If you have trouble finding a particular entry, use the search and filtering tools available in Cashflow. You can filter entries by status (automatic, manual, reversals) or search for an entry by its description, date, or other details.
  8. Unable to Duplicate or Void Certain Entries
    Not all entries can be duplicated or canceled in Cashflow. Automatic entries, generated from transactions in other modules of the system, cannot be duplicated or canceled directly. To modify an automatic entry, you will need to go to the corresponding module and adjust the subsidiary transaction.
  9. Lack of Backup Documents
    It's important to keep a record of backup documents for each entry for future reference or audits. Use the file upload option to attach these documents to each entry.

Remember that if you're unable to resolve the issue, it's always best to contact technical support for assistance and to avoid potential errors that could affect your accounting records.