Journal Entry in ERPNext – Complete Overview
A Journal Entry is an entry made in the general ledger that indicates the affected accounts in a transaction.
It is a multi-purpose accounting transaction where both debit and credit accounts are manually defined and must always remain balanced.
What is a Journal Entry?
A Journal Entry is a standard accounting transaction used to record all financial activities except Sales and Purchase documents.
- It impacts multiple accounts in the General Ledger
- Total debit must always equal total credit
- Used for adjustments, expenses, and financial corrections
Where to Find Journal Entry
Home > Accounting > General Ledger > Journal Entry
Common Uses of Journal Entry
- Booking operating expenses (travel, petrol, utilities)
- Bank and cash transactions
- Opening balance entries during migration
- Adjustment entries and corrections
- Write-offs and bad debts
- Depreciation entries
- Exchange rate revaluation
How to Create a Journal Entry
- Go to Journal Entry list and click New.
- Select Entry Type (default is Journal Entry).
- Set Posting Date.
- Select Debit Account and enter amount.
- Select Credit Account and enter matching amount.
- Ensure total debit equals total credit.
- Save and Submit.
Key Features
- Supports multi-currency accounting
- Allows linking to invoices, orders, and assets
- Supports template-based entries
- Provides reverse journal entry option
- Includes automatic difference adjustment tool
Important Entry Types
- Bank Entry
- Cash Entry
- Credit Note / Debit Note
- Contra Entry
- Opening Entry
- Depreciation Entry
- Exchange Rate Revaluation
- Inter-company Entry
Core Accounting Rule
Total Debit and Total Credit must always be equal before submission.
Example
For an expense payment:
- Debit: Expense Account (e.g., Travel or Telephone)
- Credit: Bank Account
Important Notes
- Journal Entries directly affect the General Ledger
- They are used when transactions are not handled via Sales or Purchase documents
- They are essential for adjustments and financial corrections
Journal Entry is one of the most powerful accounting tools in ERPNext for complete financial control and accuracy.
