Journal Entries
About Journal Entries
Journal entries are a fundamental part of accounting. They record every financial transaction in your business's general ledger, ensuring your books are accurate and up-to-date. In Bench, a journal entry is a way to manually adjust your accounts for transactions that don't fit into other predefined documents, such as sales invoices or expense claims.
For example, you might use a journal entry to:
- Make a correction to an existing entry.
- Transfer funds between different accounts.
Key features of the Journal Entry form
The Journal Entry form in Bench is designed to be intuitive and flexible, allowing you to handle a variety of accounting tasks.
- Sequential Numbering: Each journal entry is assigned a unique, sequential ID (e.g., JE-0001). This makes it easy to track and reference entries.
- Journal Entry Type: You can categorize your entries using different types, such as Journal Entry, Depreciation Entry, or Asset Disposal Entry. This helps in organizing your records and filtering transactions.
- Memo: A required text field that allows you to provide a detailed description of the transaction's purpose. This is a crucial element for auditing and future reference.
- Multi-Currency Support: Bench can handle transactions that involve multiple currencies. Simply check the Multi-Currency box to enable this functionality. When enabled, the system automatically calculates the base currency amount using the correct exchange rate for the date of the entry.
How to create a Journal Entry
Creating a journal entry in Bench is a straightforward process.
The Transaction Table
The heart of the journal entry is the transaction table, where you list the individual debits and credits.
| Column | Description |
|---|---|
| Account | The specific account being affected by the transaction (e.g., Cash, Bank, Accounts Payable). |
| Party Type | Specifies the type of party involved, such as a Customer, Supplier, or Employee. This is an optional field. |
| Party | The name of the specific customer, supplier, or employee linked to the transaction. |
| Debit | The amount to be debited from the account. A debit increases assets and expenses, and decreases liabilities, equity, and revenue. |
| Credit | The amount to be credited to the account. A credit increases liabilities, equity, and revenue, and decreases assets and expenses. |
Balancing your entries
A core principle of double-entry bookkeeping is that for every transaction, the total debits must equal the total credits. Bench enforces this rule, ensuring your entries are always balanced. The form includes an automatic calculation of the Total Debit and Total Credit fields. You won't be able to submit the entry until these two totals match. If you are using multi-currency, this check is performed on the base currency amounts, not the amounts in the transaction's currency.