Creating and Managing Journal Entries in Empress

Guides & Tutorials
1

Introduction

Introduction

Welcome to our Empress guide on managing Journal Entries. This feature provides a flexible and accurate way to record diverse financial transactions that don’t strictly adhere to the typical Sales or Purchases. Examples include the transfer of funds from a Bank Account to a Cash Account, recording expenses, or documenting prepayments. By using this feature, businesses can ensure accurate and up-to-date accounts which are crucial for effective financial management.

Creating Journal Entries

Creating a Journal Entry in Empress is a straightforward process. To begin, navigate to the Journal Entry page. You can find this by following this route: Common > Journal Entry.

Here, you’ll see a blue + button. Click on this to open a new Journal Entry form.

This form requires you to:

  1. Define the type of Journal Entry.
  2. Add rows for each Account involved in the transaction, indicating the amounts being credited and debited.
  3. Save and submit the form.

Maintaining Double Entry Bookkeeping

When creating a Journal Entry, it’s important to ensure that the total amount in the Debit column matches the total amount in the Credit column. This is in accordance with the principles of double-entry bookkeeping.

Once you click Submit, Empress will automatically create ledger entries and update the account balances.

You can view these entries by clicking on Ledger Entries under the ... menu.

Practical Applications of Journal Entries

Let’s look at two examples of how you can utilize Journal Entries in your everyday business operations.

1. Recording Expenses

If you incur an expense that is paid at the time of purchase, you can record this Expense directly using a Journal Entry.

To record an expense, add two rows to a new Journal Entry form—one for Debit and another for Credit.

For instance, let’s say you incur an expense of ₹5,000 for traveling to a client site, and you paid it directly from your Bank Account. In this case, your Journal Entry should look like this:

Account Debit Credit
Bank Account ₹5,000
Travel Expenses ₹5,000

2. Recording Prepayments

In cases where a customer pays in advance for a product or service that you haven’t yet delivered, this cannot be booked as income, and instead represents a liability for your business to fulfill later.

To record a prepayment, add two rows to a new Journal Entry form:

  1. One row that debits the amount into the Bank Account, as you have received the payment.
  2. Another row that credits the amount into a Liability account. You can create and name this account as Prepayments.

Here is an example of a prepayment Journal Entry:

Account Debit Credit
Bank Account ₹5,000
Prepayment ₹5,000

Conclusion

In conclusion, Journal Entries in Empress offer a versatile method to record a variety of financial transactions, contributing to an effective and accurate financial management. This feature is crucial for maintaining up-to-date and accurate accounts, facilitating better financial decisions and enhancing overall business processes.

For further assistance, please refer to our other non-technical resources or reach out to our support team.