Chart of Accounts Issue

Hey!

I have a small business and just started the use Manager. It looks simple, which I like.
Unfortunately, I have now stumbled into an issue.

I have created a totally custom Chart of Accounts and when I now click “Receive Money” for my Sales Invoices, then I can not use the Chart of Accounts that I created. I had to create Cash Accounts in order to add an account in the Receive Money screen, but this way all my Assets are wrong, because it created an Account named “Cash & cash equivalents”, where it puts all Bank and Cash transactions, which it should not do.

Is there a way for me to decide what Account I want to use for each of my Transactions? Thank you!

// EDIT

I just had a look at this guide - Receive money, but it did not seem to list the issue I am facing.

All the best,
Kris

Yes see the guides. It will really help you

1 Like

Yes it should put bank & cash transactions to Cash & Cash Equivalents because that is the way in which Manager is designed to work. Your totally custom chart of accounts is in conflict with the Control Account principles of Manager. Just so you understand, Manager’s chart of accounts is designed from the Balance Sheet down and not from the chart of accounts up, which can be a foreign concept until grasped.

Yes, “your” assets way appear wrong, but the values are correct, but by using Custom Control Accounts you can probably have the Cash & Equivalents displayed as you currently have your custom assets - see RHS screenshot below, that is Cash & Equivalents re-designed.

Yes, when you do a money transaction you are asked which account to Receive / Spend in.

Thank you very much for a detailed write up, but does this mean that the program really does not work anywhere in the world, but just for certain countries that use this kind of bookkeeping?

At the moment I have this screenshot in my “Receive Money” page:

I have selected the correct account as “Outstanding invoice from a Client”, but the money should now go to my Bank Account. If I create a Cash Account like Manager needs, then it adds them as Accounts and not Groups, so I can not categorize them a bit further. This way my Reports do not look correct, because they need to be a more detailed.

I currently see this in my Assets Report:

Kassa = Cash
Pank = Bank

But now all my Transactions are grouped to Cash & Cash Equivalents, which does not give me a correct detailed overview. I also want to let you know that I am not an accountant and every bit of information helps, may be I am just overlooking some simple things or trying to do things too hard for myself.

Also, when I am adding normal Journal Entries, then I can choose, where I wish the money to go.

Thank you!

All the best,
Kris

This program can work anywhere in the world and is used in over a 100 countries.

The money is going to your Pank account as you selected Pank.

Now it is very easy to make your BS Kassa & Pank look work as Kassa & Pank by using Custom Control Accounts and I will illustrate that to you in my next post

You can click on the cash and cash equivalents to drill down and see greater detail of all of the bank/cash accounts you have set up in the cash and cash equivalents tab. This will give you a break down of all your different bank accounts - eg bank, cash in hand, business savings, etc. From an accounting point of view, there is little difference between cash held at a bank and cash in hand. If you think about it, most people wouldn’t mind if you paid them in cash or through the bank.

That is why it all appears under Cash and cash equivalents.

Step 1
You have 2,500 next to Kassa, just for now can you please delete that transaction

Step 2 - Go to Setting - Chart of Accounts
Click edit next to Kassa and click delete
Click edit next to Cash & Cash Equivalents and change the name to Kassa and update
Click edit next to Pank, tick the Control account and select Made up of Cash Accounts and update

COA looks like

Step 3 - Go to Cash Accounts tab
Kassa is ok so needs no changing
Click edit next to Pank and for Control Account select Pank

Now all transactions for Cash Account Kassa will go to BS Kassa and all transactions for Cash Account Pank will go to BS Pank. Now you can re-enter the 2,500 via Cash Accounts tab

You shouldn’t use Journals for Kassa/Pank transactions, they are for minor adjustments.
All Receive / Spend “MUST” go through Cash Accounts tab then Kassa or Pank

That is great! I knew that there had to be some logic, which I was missing. Now that it is set up, it works exactly as I was hoping.

Thank you very much for showing everything step-by-step. There may be other questions in the future, if I get stuck, but at the moment you have helped me a great deal.

Have a great weekend!
Kris

And I am back…

I have now added my Sales Invoices and Purchase Invoices. Everything works as it should.

But now if I want to create some Journal Entries, I can not select Kassa = Cash or Pank = Bank. They just do not appear in the drop-down of the Journal Entry. Why is that?

Do I need to create additional Cash and Bank accounts in my Chart of Accounts, because these do not show up on the Journal Entires drop-down screen?

All the best,
Kris

You can’t use cash accounts in journal entries in Manager.io which I think is perfect.
Use the receive money and spend money commands in the cash accounts tabs to do this.

@Abeiku

That is very weird…

Manager automatically creates a Cash Account and I have to use it for all my Bank and Cash transactions, but at the same time it does not let me add Journal Entries. This seems contradicting to me.

At first, when I set up my custom Chart of Accounts, then I could not use the Cash and Bank accounts to add properly Sales and Purchase Invoices. Now I did the modifications, that @Brucanna instructed me and Journal Entries do not work properly.

Is there maybe a third method, that I could use to get everything working as it should? I would definitely like to add my Equity changes as Journal Entries.

Thank you!

All the best,
Kris

To be honest I haven’t read all the details you provided before this but here goes, the guides can solve your problem.
A lot of you guys don’t read the guides. If you read the guides it will teach what to do. I don’t really understand your problem but I sure know the solution lies in the guides

@kriskorn - please re-read my last point in my last post - it clearly states you shouldn’t use journals with klassa/pank transactions. This is not contradicting as Journals can’t move “money” into or out of cash accounts. Receive Money is used to put money in and Spend Money is used to take money out. So to repeat - Journals can’t move money. Journals are used to move “values” which aren’t money based - depreciation, bad debts, provisions.

Or to put it another way - the Pank knows how much you Receive & Spend by the money you put in and take out and this is shown on the Pank Statement. If you do a Journal in the Pank account, how does the Pank get to know about that Journal so it can be put it on the Statement.

What are these Journals entries for ? If they involve the movement of money then you must use Receive/Spend Money

No, Manager is used by 10,000’s of users and they all find it working as it should - if they use it correctly

WHY ?

Hi again @Brucanna,

Thank you very much for the reply.

Unfortunately, it seems that everything should be a Purchase (Spend) or a Sale (Receive), but when I do a Capital Contribution, then it should not be none of them.

When I use a Journal Entry, then I have a Debit and Credit side, which I do not have in Cash Accounts. Everything you do with a Company is not a Sale or a Purchase, you have other things as well, which should be added as Journal Entries. Is this just a small shortcoming that everything is not as flexible as it could be at the moment?

Do not get me wrong, I like the software, but there are currently some things that I do not understand and I have to figure them out in order to use the software correctly.

I definitely would have liked to use my Custom Accounts everywhere. At the moment there are some default, which have to be used, but they work in one place, but do not work in other places.

Basically, I currently have only a Cash Account, because I could not add a Bank Account. The Cash Account is now divided to a Bank and a Cash Account, but they can not be used for Journal Entries.

When I first created my Bank and Cash account separately, then I could use them in my Journal correctly. I had to remove my Accounts and use the default Account so that Manager could work correctly, But at the moment the default Accounts can not be in Journal Entries.

This seems contradicting and double the amount of work to get a simple Journal Entry added. Also, this way it takes more time as well.

Hopefully, we can get to the bottom of this and then I can happily use the software.
Also, please know that all of your replies are greatly appreciated!

All the best,
Kris

@kriskorn You wrote “Unfortunately, it seems that everything should be a Purchase (Spend) or a Sale (Receive), but when I do a Capital Contribution, then it should not be none of them”.

Have you read the guide on capital accounts?

No, you can do both, a Spend or Receive, without it being a Purchase or Sale.
When you do a Capital Contribution it is a Receive Money

In Cash Accounts you do have Debit and Credit, it is just displayed differently.
When you select Receive Money that is the same as saying Debit and when you nominate the Account that is the same as saying Credit. When you select Spend Money that is the same as saying Credit and when you nominate the Account that is the same as saying Debit.

Yes, but not if those other things involve the movement of money. Please re-read my last post - how does the Bank put Journals on to the Bank Statement What communicates to the Bank that the Journal exists,

Correct

Currently you have a Cash Account and a Bank Account with both listed under the Cash Accounts tab (heading). If you wanted to a have a Credit Card Account, then it would be listed under the Cash Accounts tab.

Well, you can’t

All default accounts work where they are required to work within the rules of accounting. They are not going to work where that would breach the rules of accounting.

Perhaps, but that was a completely WRONG usage

To get to the bottom please read the Guides.

I can not say thank you enough. Chopping up my reply like this has helped me a lot and I am going to follow everything you have said and If I still do encounter issues, which I hope I do not, then I will let you know, but at the moment, I am sure I can get everything working as I would like.

All the best,
KRis

About this I have no doubt, @kriskorn. One thing I noticed as I read your posts in this thread was your concern for being able to enter classical journal entries with visible debits and credits. Rest assured, Manager follows rigorous double-entry accounting standards. But most transactions are streamlined, so you don’t have to puzzle out which account to debit and which to credit on every transaction. Manager does the thinking for you. But behind the curtain, debits and credits are being entered. Only on rare occasion do you have to be adventurous and figure it out yourself in a journal entry.

Hi @Brucanna.

I remember reading your post and now I found it again. Can you explain more about:

Manager’s chart of accounts is designed from the Balance Sheet down and not from the chart of accounts up, which can be a foreign concept until grasped.

Is there a guide detailing this?

Thanks.

Manager creates control accounts based on balance sheets accounts and works backwards from there.

E.g. You activate the Customers & Sales Invoices tabs and Manger creates the COA control accounts “you” are going to use and builds downwards from there - the individual customer.
The same approach applies to most of the other primary tabs when they are activated

Whereas other accounting software allows you to create your chart of accounts as the base and then builds upwards from there.