Recording a Journal Entry

Background

You may need to enter a miscellaneous transaction to be shown on your financial reports that do not involve creating an invoice, receiving a payment, or paying a bill. Examples of this miscellaneous journal entry would include recording an owner’s distribution or reclassifying an expense mistakenly posted to the wrong account.

You can also import your bank transactions to automatically create journal entries.  See Connecting Your Bank Accounts for Accounting Journal Entries.

How to Record a Journal Entry in Patriot Software

Accounting > Financial Tasks > Journal Entry

1. The transaction date will default to today’s date. Change the date, if needed.
2. Include a brief description of your journal entry.
3. If you have set up departments, select an optional department.  For more details, see Managing Accounting Departments.
4. Select an account from the list.
   • You can also create a new account “on the fly” by clicking the +Add New link. A modal will appear with fields for you to create your new account. For more information, please read, Setting Up Your Chart of Accounts.
5. You have two options for making your journal entry. The toggle at the right of the page “USE DEBITS/CREDITS” can be used for your preferred display method.
   1. Choose to either “Increase” or “Decrease” the account balance.  Depending on the account you choose, your selection will automatically show whether this will be recorded as a credit or debit.
   2. Enter Debits/Credits by switching the toggle at the right side of the page.  For further reading, see our blog article Understanding Debits and Credits.
6. Enter the amount of the transaction for this line item.
7. Enter the optional line description if desired.
8. If you need to add more accounts, click “Add Row.”
9. If you have Accounting Premium, you can attach electronic files and receipts to this entry by clicking “Attach Files.”  See Managing Your Receipts and Documents for details.
10. Click “Save Entry.”

If your accounting journal entry does not balance, you will see a warning when you attempt to save. This is because the “debits” and “credits” are not equal for the types of accounts you selected. This is required to create an entry that will be properly shown on your financial reports. For more information, check out our blog post about accounting debits and credits.

If you see the warning, review the accounts you have entered. You may have left out a line item that needs to be included in the transaction. Consider what you are trying to accomplish with the journal entry, and double-check that you have selected the correct increase or decrease action for each line item.

If you need to void or delete a journal entry, see Voiding a Journal Entry.