What exactly are these functions for? Doesn’t these compete functions with the journal entries that I enter when I receive or spend money?
New to accounting and accounting software, kind of confused here. Any help would be much appreciated!
I can’t help, but I am wondering about this topic from the opposite direction. I.e, I have been using the “Bank Account” method to input financial details of my business account based on my bank statements and was wondering if I really need to use the “Journal” method?
I am also new to accounting so I would also be interested in someone defining the purposes of these financial recording methods.
@warmwood, you are right. “Receive money” & “Spend money” transactions are not strictly required as every cash transaction can be recorded as a journal entry.
This violates one of the principles I have while designing Manager which is that for every accounting event there is exactly one and only one way how it can be recorded in Manager.
In case of spending money from bank account (or receiving money), there are two different ways how it can be recorded. First of all, most users don’t expect to record cash transactions as series of debits and credits, they expect to see “simplified” form where they specify amount spent or received and let the software to do the translation into debits/credits. So that must stay.
On the other hand, I don’t want to restrict journal entries from accessing certain accounts. One of the major innovations in Manager is that journal entries can debit/credit any control account which is really powerful concept. So I’m certainly not making any changes there.
So for now, it doesn’t matter which way you use. I guess whatever feels more natural to you. In future, I will find a way to merge these two concepts so the principle above won’t be violated anymore.
As an accountant, we use journal entries only for recording adjustments on the accounts while if there’s transactions affecting cash, we use the received money (for collections) and spend money (for disbursement)
This is what I would recommend too for now. This way Journal entries tab won’t be polluted with ordinary cash transactions.
My previous accounting software allowed for journals to bank but always showed a warning window first.
I think I understand the difference now. Thank you guys so much for helping out and creating such constructive learning experience!