thanks eko,
I am new to accounting, I am just doing it for my own business. I created all the accounts I needed from the chart of account and did all the input with journal entries, so far everything make sense to me so I think I am fine? It’s balanced.
Being balanced does not assure that you are fine. Mistakes are common and using Manager’s built in features and follopwing its guides and accounting coach is the way to make progress in your learning effort. I just linked to what often is complicated for many, especially novices but more experienced accounting people as well and that is understanding the normal balances https://www.accountingcoach.com/debits-and-credits/explanation/3
thanks eko for the link,
I’ve done exactly the same from what the link described. like the asset is debit (+) credit (-) but liability is debit (-) credit (+), it looks confusing at first but it make sense in the end.
I just didn’t quite understand the part why journal entries are not being use, I thought to enter a transaction you need to do it by journal entry, the double entry accounting, debit and credit to make it balance? I might be getting the wrong idea what you guys mean by not using journal entries.
Manager does the debit and credit assignments when using payments, receipts, etc and thereby prevents mistakes. It also is much quicker than journal entries. Please read the link I provided on Journal emtries in Manager in full and not just my small excerpt.
I use this rule when understanding accounting …
All ACE (Asset, Cost, Expense) accounts are Debit
All LIP (Liability, Income, Proprietorship/Ownership) accounts are credit
So to increase an asset (say buying a car) you Debit the asset account, to increase a liability (say Accounts Payable/Creditors) you Credit the liability account.
thanks Paul,
yea i got that right I believe, it looks confusing but the logic make sense when I start doing the entries.
however I still dont understand what eko mean by journal entries is not use widely. I created all the accounts I need (inventory by product type, cash, payables, receivables, product sales, expenses), and I just do the journal entries with them, it works fine, and i recently just found out i can setup currency and the rate of the day, I find Manager is quite an easy tool to use comparing Wave and QB.
I gave you links to the relevant information. Manager takes care of proper entries by functional tabs to prevent errors. All accrual accounting is based on Journalling but that does not mean that you must use a Journal entry when better ways exist to achieve the same preventing the users making mistakes.
Most importantly Manager does not allow Bank or Cash accounts to be used in Journal Entries, so not sure how you could deal with accounts receivable and payable without setting up cash or bank accounts, customers and suppliers and enabling the payment and receipts tabs. Check your Summary and see if in the Balance sheet there are any Suspense Accounts.
All accounting systems are designed that you drive them from the specific sub modules (Receipts, Payments, Sale Invoices, Purchase invoices, etc) … Journal entries are only ever used for things that can’t be managed via specific sub modules and these are few and far between.
Maybe I can explain again what I’m and Eko is trying to say by this example … you write a cheque and mail it off to a supplier to pre pay for a purchase of a product and at sometime in the future your bank account is updated with the presentation of the cheque … perhaps not very good, but that is an example of driving any accounting system via the sub modules.
To be clear Payments and a Receipts are Journal entries. One to the Cash Receipts Journal and the other to the Cash Disbursements Journal. What is being eliminated by using the Payments and Receipts is the potential for error should you chose to use the General Journal as the means for recording these transactions. As a non-accountant experience has shown me that a lot of business owners who are non-accountants are not aware of the five main journals. Sales Journal - Purchasing Journal - Cash Receipts Journal - Cash Disbursements Journal - General Journal
Simply put, by using payments and reciepts etc it does all the account entry for you.
A simple example is paying a bill.
I enter the payment
It automatically gives me
And automatically applies all the debits and credits to the accounts allocated to that expense
One single input form and all the journal debits and credits are allocated correctly.
The same goes for inventory, sales etc.
As a new user, and as has been suggested many times, learn to use Manager by creating a test business and then follow the current Guides. (There are also the new guides in progress).
As I understand it, Averohk has setup his chart of accounts without using the Bank and Cash accounts tabs and is using journal entries for all the accounting transactions
There is nothing wrong with this and it will give the correct results as long as the journal entries are entered correctly
However it means that certain features and reports in Manager are not avaliable and the risk of getting journal entries wrong is always there. The resulting accounts will be balanced but incorrect - as they are balanced, the error may not be spotted and so incorrect reports could be produced and submitted to the final users.
thanks eko,
yes I read the link you provided couple of times, I think probably because I am using the free version, and as Joe91 said, I setup the chart of accounts and just work from there, so probably thats why
thanks Paul for the example, probably because I only have very minimal accounting knowledge, and at the moment my business is just small scale, so what I been doing is probably sufficient at the moment, but if ever able to scale my business i will hire a professional accountant for sure
There is no difference, except for multi-user access in functionality between the free Desktop Versions and the paid for Cloud and Server Editions see Manager.io
thanks stec1921,
i think i been only using general journal, and mixing everything together, whatever i paid or receive that day i will just record it
and in Manager, i will just record those transactions into the respective accounts i created from the chart of account, such as using Cash and bought some Inventory, then I will be Cash credit, Inventory debit etc
thanks Vacuumdog for the screenshot example,
I never seen any of those while I am doing my entries, i simply just click on Journal Entries, select the accounts, then credit debit thats all
thanks Mark,
I will give it a try
thanks Joe91,
yes thats what I exactly did, I didnt link any Bank account, I just check the statement and do the transactions
probably as you said i am not using the full potential of Manager’s features
In fact, you are not using Manager the way it was intended
It’s a bit bit like getting a fork and using it to drink a bowl of soup - it will work but its very inefficient
