Defining multi-dimensional entries: settings

The allocation of costs and revenue to cost centers and cost units is sometimes not enough for reporting purposes. In Exact Finance, you can make multi-dimensional entries that allow you to allocate entered amounts to dimensions as well as cost centers and cost units. You can create a maximum of 5 extra dimensions.

Example

For the annual report, you want to know how your revenue is distributed over all the countries in which you sell your products. You can enter this information by using multi-dimensional entries. Create a dimension "countries". When you make entries, you can select the country in which the revenue was generated.

Use [Finance: Tables, Maintenance, Dimensions, *] and [Finance: File, Company settings, Dimensions] to define the multi-dimensional entry settings.

• To be able to make multi-dimensional entries, enable the setting on 'Multi-dimensions' tab in [Finance: Ledger, Master data, Maintenance, General ledger accounts]. 

Sorting entries

Entries are always made per journal (sales journal, purchase journal, cash journal, etc.). If your entries (entry documents) are sorted logically, entries can be made quickly and efficiently without you having to switch from one journal to another or from one period to another too often.

This section describes the following:

• Entries
• Numbering entries
• Using entry numbers more than once
• Searching for transactions using entry numbers

Entries

Most entries are based on entry documents such as invoices, credit notes, bank statements and cash statements. You can use the original numbers of the entries as entry numbers in Exact Financials. Exact Financials generates unique entry numbers per journal and per financial year. It is advisable to accept these entry numbers when you make entries.

The first entry number you want to use for each journal should be defined in [Finance: Ledger, Master data, Maintenance, Journals]. For each subsequent entry, the entry number will automatically be increased by 1.

Numbering entries

The standard entry numbers in Exact Financials consists of the financial year and a sequence number. All entry numbers are numbered so that they are always unique, regardless of the financial year and journal. To achieve this, use entry numbers consisting of a code for the financial year, a journal code and a sequence number.

Example

The first entry number in journal '010' in 1996 is 96010001. The second is 96010002, the third is 96010003, etc. The sequence number makes up the last three positions of the entry number. As a result, this method can only be used if you are sure that you won't have more than 999 entry numbers per journal. If you have more entry numbers, you may take the second number of the financial year (the '6' in '96') which would enable you to use sequence numbers of four positions instead of three.

Using entry numbers more than once

The examples below show how you can use the same entry number in different journals:

• You want to correct an entry you have already posted. Then you will have to create a reversal entry. Use the entry number of the entry to be corrected for the reversal entry.
  
• You want to write off an outstanding item after it has been paid. The journal entry will contain two entry numbers:
  • The entry number of the payment (for example the number of the bank statement on which the payment is listed).
  • The entry number of the outstanding item, which was entered previously in a sales or purchase journal.

! However, avoid using entry numbers twice if possible.

Searching for transactions using entry numbers

In general, you can find a transaction using the entry number in [Finance: Ledger, G/L transactions].

Working with scenarios entries

Scenario entries can make the entry of similar recurring entries easier. You can make scenario entries in the following journals: bank journal, cash journal, giro journal, sales journal, purchase journal and general journal. When using this functionality, you can generate predefined lines during the making of the entry.

Take note on the following matters when using scenario entries:

Financial preferences

To be able to use the scenario functionality, you need to enable the 'Scenario entries' setting in the [Finance: File, Company settings, Financial preferences] on the 'Process' tab.

Maintenance journals

Select the journal for which you want to make scenario entries and enable the option 'Scenario' at the bottom of the screen in [Finance: Ledger, Master data, Maintenance, Journals].

Creating scenario entries

Use the menu path [Finance: Ledger, Journal entry, Scenario, Scenario entry] to create a scenario entry. 

Reports scenario entries

Use the menu path [Finance: Ledger, Journal entry, Scenario, Scenario reports] to view a report of the scenario entries created.

Making entries

Use the sub-menu path of [Finance: Ledger, Journal entry, Entry procedure, *] to create entries in the journal to which the scenario entry is applied.  For example, if you want to make scenario entry in general journal, then go to [Finance: Ledger, Journal entry, Entry procedure, General journal] and select the pre-defined scenario before you create the entry lines.    

Creating recurring entries

Certain journal entries will have to be made regularly, such as entries for depreciation, energy bills and standard deliveries. You do not have to make these kinds of entries over and over again. You can generate them automatically after entering them only once, for instance, all depreciations for one financial year. This is more efficient and save time than entering them separately and do the checking. 

Recurring entries can only be used in the general, sales and purchase journals. First create the journal entries in sub-menu path of [Finance: Ledger, Journal entry, Recurring entries, Maintenance, *]. Then you can use them to generate normal journal entries for a number of periods at once. Generate journal entries based on existing recurring entries in [Finance: Ledger, Journal entry, Recurring entries, Entry procedure]. Once you have generated the journal entries, you can change and delete just like normal entries.

Example

You run a catering company making regular deliveries to a number of customers each month. Create the following recurring entry:

Debtors-,--

//VAT to pay-,--

//Revenue-,--

See also:

[Finance: Ledger, Journal entry, Recurring entries, Maintenance, General journal]

[Finance: Ledger, Journal entry, Recurring entries, Maintenance, Sales journal]

[Finance: Ledger, Journal entry, Recurring entries, Maintenance, Purchase journal]

Journalizing recurring entries

You can create recurring entries for entries which are entered on a regular basis in the sales, purchase or general journal. You can use these recurring entries to journalize several ordinary entries at the same time in [Finance: Ledger, Journal entry, Recurring entries, Entry procedure]. 

Entering invoices for debtors and creditors

If you receive or send an invoice, you will have to make an entry in the purchase or sales journal respectively. This has two consequences:

• Purchases or sales are registered in the general ledger.
• An outstanding item is generated automatically for the debtor or creditor selected.

If you have Exact Sales, you generate sales entries by journalizing previously entered sales invoices.

You can retrieve detailed reports on outstanding items in the [Finance: Debtors, Account receivable]. You can locate all outstanding items by using the debtor or creditor number and the entry number.

See [Finance: Ledger, Journal entry, Entry procedure, Sales journal] or [Finance: Ledger, Journal entry, Entry procedure, Purchase journal] for explanation on how to use these two journals.

Example

Delivery of 300 dictionaries at 10,--, VAT: 17,5 %

Invoice amount:300 * 10,--=3.000,--

VAT:3.000,-- * 17,5%=525,--

Total 3.525,--

This can be journalized as follows:

Debtors 3.525,--

//Revenue non-fiction 3.000,--

//VAT to pay 525,--

Making cash and bank entries

Bank entries are normally based on bank statements. Cash entries can be made using deposit slips or cash reports. 

• Entries can also be made for payments in foreign currencies. 

Each bank account has its own journal with a separate offset account. You can also use various cash journals.

You can make giro entries in [Finance: Ledger, Journal entry, Entry procedure, Giro journal]. This type of journal is similar to the bank journal.

The entry procedure depends on the type of payment:

• Payments which do not involve an outstanding item
• Payments made to write off an outstanding item

As an outstanding item is involved, a control account for the debtor's or creditor's subsidiary ledger should always be selected. Outstanding items can be dealt with in three ways, depending on the situation:

• An existing outstanding item is written off completely.
• Payment of an invoice has been made, but the outstanding item has not been entered yet. In this case, the outstanding item can be created immediately.
• Prepayment, i.e. payment of an outstanding item which is not written off. In this case, the outstanding item can be written off later using a settlement journal or general journal.

See also:

[Finance: Ledger, Journal entry, Entry procedure, Bank journal]

[Finance: Ledger, Journal entry, Entry procedure, Cash journal]

Troubleshooting

• One of my bank statements is missing. What should I do?

  If the opening balance is incorrect because one of the statements is missing, you can change it. Although this will not affect the entry process, it's better to enter the statements by statement number to avoid errors.

• An amount was transferred from one bank account to another. How do I record this?

  First select the journal in which the payment should be entered in. Enter the amount in a suspense account. Then select the journal for the bank account in which the amount was received and enter the amount using the same suspense account.

Entering unallocated payments

In some cases, payments from debtors or creditors cannot be linked directly to outstanding items for one of the following reasons:

• You want to enter the payment, but you do not have time to write off the outstanding items for which payment was made.
  
• It is not clear which outstanding items the amounts should be linked to. You may not yet have entered the outstanding items involved.
  
• A payment has been made in advance.

Unallocated payments can be entered in cash, bank and general journals. Use the relevant sub-menu path in [Finance: Ledger, Journal entry, Entry procedure, *] to enter the unallocated payments' entries. A special entry number is created automatically for these payments. To write off the outstanding items later, use the settlement journal. See [Creating entries in the settlement journal] below.

Creating entries in the general journal

The general journal is used for entries which cannot be entered in other journals.  Use the menu path [Finance: Ledger, Journal entry, Entry procedure, General journal] to create entries in the general journal.

The general journal does not have a default offset account. This means that you can choose the accounts in which amounts should be entered. You cannot use VAT codes in the general journal. Instead, VAT amounts should be entered in another separate entry lines. This will enable you to correct the VAT amounts if it has been entered incorrectly. These entered amounts will not appear on the Exact Financials VAT return, because these returns are completely generated on the basis of amounts entered with VAT codes.

Writing off outstanding items in the general journal

The general journal can also be used to write off outstanding items. Just as in the bank journals, you have to select the collective account in which the outstanding item was entered. See [Making cash and bank entries] above.

Example

You have created an outstanding item which is not written off immediately. This transaction is entered as follows in the general journal:

Creditors 123,--

//Amounts to be paid 123,--

After payment is made and the bank statement has been received, you can debit the 'Amounts to be paid' account.

Creating entries in the settlement journal

The settlement journal can be used for payments that have not yet been linked to an outstanding item. For example, if the outstanding item could not be entered because a credit note is still expected. Use the menu paths [Finance: Ledger, Journal entry, Entry procedure, Settlement journal, Debtors] or [Finance: Ledger, Journal entry, Entry procedure, Settlement journal, Creditors] to create entries in the settlement journal.   In the settlement journal, prepaid amounts can be 'matched' with outstanding items.

Creating settlement journals

You need one settlement journal for debtors and one for creditors. You can create settlement journals in [Finance: Ledger, Master data, Maintenance, Journals]. In this function, indicate in the 'Sub-type 2' setting whether the settlement journal is for debtors or creditors.

Checking journal entries

It is very important to check journal entries before they are posted. Once they have been posted, the entries (which are known as transactions after posting) can no longer be changed. If you discover an error after posting, you will need to create an offset entry to correct it. Check the journal entries in [Finance: Ledger, Journal entry, Entry report].

Check the journal entries and the invoice numbers (entry numbers). Make sure you have entered the right amounts in the right general ledgers accounts. The total that is entered in the fixed offset account of each journal is presented at the end of the entry report.

Correcting journal entries

You should correct incorrect journal entries before posting. The correction of posted journal entries (transactions) is rather complicated and time-consuming.

Depending on the type of error made, you can use the following functions:

• [Finance: Ledger, Journal entry, Change entry period] - To change the financial year or the entry period for an entry.
• [Finance: Ledger, Journal entry, Delete entries] - To delete entries which have been made in the wrong journal and duplicate entries.
• [Finance: Ledger, Journal entry, Entry procedure, *] - To correct all other types of errors in entries. Call up the entry by selecting the correct journal, financial year, period and sequence number. The entry will be displayed. Correct the entry and close it.

  Example

  In the sales journal, you enter a sale for the amount of 1.100,--. After a few days, your debtor orders more goods on the same sales order. The total invoice amount becomes 1.500,--. You can enter this sales order in two ways:

  1. Make a new sales entry using the old entry number. The disadvantage of this is that you have to make an entirely new entry.
     
     
  2. Retrieve the old sales entry and enter the new data. In the header, enter the new amount (1.500,-). Enter the payment discount manually. Go to the entry line and replace the amount 1.100,-- with 1.500,--. Another option is to insert a new line with the amount 400,--.

• Always print a new entry report in [Finance: Ledger, Journal entry, Entry report] after you correct entries.

Troubleshooting

• One of my outstanding items 'disappeared' after I deleted a sales entry.

  When you make a sales entry, an outstanding item is generated automatically. If you delete a sales entry, the outstanding item is also deleted automatically.

Correcting transactions

The only way to correct a transaction is by using an offset entry.

• If the transaction needs to be deleted, credit the accounts debited and vice versa. This type of correction is called an 'offset entry'. Each relevant general ledger card will contain a debit and credit transaction for the same amount. Because of this, the transaction will not be deleted.
  
• If a transaction is incorrect, balance off the difference between the old and the new amounts. Make sure that you enter the amounts correctly. For example, if the amount debited was too high, you will have to credit the same account with the correct difference amount.
  
• If an amount was entered in the wrong account, you will have to make an offset entry and enter the amount in the correct account.

The way on how you can make an offset entry is depends on the type of error:

• If a bank statement has been entered in an incorrect bank journal, you will have to make an offset entry in the relevant journal. Then make a new entry in the correct journal. The same procedure applies to an entry which is made in the wrong cash journal.
  
• If an entry was made in the wrong purchase or sales journal, make an offset entry in the relevant journal. You will have to use the original entry number. If you do not do this, the outstanding item will remain after the offset entry has been made and an outstanding item with a negative balance will appear.
  
• If you receive a credit note, you should enter it in the original journal and use the invoice number on the credit note as the new entry number. This will result in two outstanding items: the original outstanding item and the new one with a negative amount. Use the general journal to write off the outstanding items. Make an entry in which you both debit and credit the invoice amount. This will result in the original outstanding item and the negative one being written off.

! It is useful to have a posting report for the incorrect entry at hand.

Reversal entries

When you make an offset entry, you can indicate that it should be displayed on general ledger cards as a reversal entry. In a reversal entry, a credit amount will be displayed as a negative debit amount and vice versa. This can prevent the debit and credit totals from becoming unrealistically high.

! You can only make reversal entries in the sales and purchase journals.

Example

See also:

[Finance: Ledger, Journal entry, Entry procedure, Sales journal] or [Finance: Ledger, Journal entry, Entry procedure, Purchase journal]

Troubleshooting

• A bank statement has been entered in the wrong bank journal. How can I correct this?

  First enter an offset entry in the original bank journal; use the original entry number/bank statement number.

  1. Enter the closing balance of the bank statement in the field 'Opening balance' and the opening balance in the field 'Closing balance'.
  2. Credit all debit amounts in the entry lines and vice versa. Enter a clear and unique description.
  3. Close the entry.
  4. Enter the statement in the correct journal.

Posting journal entries

When you are sure all entries are correct, you can post them. Posting journal entries means that they are transferred from the journal to the appropriate general ledger accounts. You can post an entry in [Finance: Ledger, Journal posting, Post entries]. Depending on your settings in [Finance: File, Company settings, Financial preferences], a report can be printed after posting. The posted entries are deleted and that they are only available as transactions.

Posting journal entries in all companies

When you work with different companies in Exact Financials, you can also post all entries in all companies at the same time. This can be done in [Finance: Ledger, Journal posting, Post: Multiple companies].