Hello sir
When we generate invoice for BILLABLE TIME, ( as per guide 5502) creates two entries in BILLABLE TIME LEDGER, ( one for credit , and the second one for debit with same value)
Please guide, why ???
D ANNASWAMY
Hi @ANNASWAMY,
No need to worry; Manager is functioning as it is supposed to. What you are seeing in the ledger is what is known as “double-entry” bookkeeping; for each transaction there are always two accounts involved.
In this case the invoice is creating a credit for the amount you are billing your customer in a revenue account. Since your customer is assumed to have not paid you yet, it also creates a debit for the same amount in a receivable account.
In this way, the accounting system keeps track of things you “hold” (Assets, Liabilities, and Equity) and your profit & loss activities (revenues and expenses). Your profit & loss activities add to, or take from, the things your business holds.
You may want to spend some time at https://www.accountingcoach.com to gain a better understanding of the basics of the double entry system.
This is a standard operation of the “Double Entry Accounting System”.
Recommend you look this up so yo get a concept why for for every debit there must be a credit.
Once you get this concept you will see why it’s necessary to have this “positive” and “negative” equation to ensure the integrity of an accounting system. If it was a single entry system you’d lose control over your transactions. I hope this helps - but please check out this basic principle. There are some very basic tutorials on this on You Tube on Double Entry Accounting and the Accounting Equation.
Let us know how you go. It’s all about control: you sell something for $100 and you want to see you have $100 of income and at the same time you want to see you have $100 in your bank account - hence the Debit and the Credit.
Thank you for the suggestion
- If the entry happens, in two diff ledgers(billable time, customer), based on invoice creation, is correct
- What we have indicated, entry happens in single ledger
Please guide us
D ANNASWAMY
You need to illustrate your situation with screenshots.
Do you mean to say you are seeing similar to below?
If so, this is correct behavior; before it is invoiced, billable time is held as an asset (there should be a “Billable Time” line under Assets on the Summary page); this is the debit entry in the ledger. Once it is invoiced, it becomes a part of “Accounts Receivable”; the credit entry removes it from the “Billable Time” ledger so it can become part of “Accounts Receivable.”
If this is not what you are referring to, please provide screenshots as @Tut said.
If I understand the screenshots correctly, you entered billable time on 19 June, then invoiced the time on 8 July. If that is the case, these entries are correct.
You are viewing the ledger for the “Billable time-movement” account, which is only a temporary account. When billable time is first entered in the Billable Time module, this account will be credited (the entry on 19/6); once the time is invoiced, it will be moved out of this account and into “Billable time-invoiced;” the debit entry on 8/7 removes it from “Billable time-movement” so it can become part of the “Billable time-invoiced” account. The underlying accounting is happening correctly.
However, you may have an error in your records or data entry; the balance is a Debit (“Dr”) amount. This account should generally have a balance that is either -0- or a Credit (“Cr”) amount.