Journal entries are the building blocks of financial accounting and record all transactions in your business. In FreshBooks, all your activities like sending invoices, accepting payments, and creating credits and expenses are automatically recorded as journal entries. Owners with Advanced Accounting activated and accountants can create manual journal entries in the Journal Entries section for more complex transactions like depreciation, fixed assets and loans.
Whenever an amount is updated, the original entry will be updated on the General Ledger report to reflect the change.
Access Journal Entries
Review all manually created journal entries using these steps:
Select the Accounting section
Then select the Journal Entries sub-section.
From the Journal Entries section, select either:
View Report - Review the Journal Entry report to generate a report of manually created journal entries in a specific date range or currency
Create Journal Entry - Create a new journal entry
Add a Journal Entry
As an owner with Advanced Accounting activated or as an accountant, create a new journal entry with the below steps:
If the journal entry needs to go into a new account, the account must be created first with the steps in What is the Chart of Accounts? here
Select the Accounting section
Then select the Journal Entries sub-section
Next, select the Create Journal Entry button
Enter the Date and Name of the new journal entry
Next, enter the alphanumeric Number of the journal entry, up to 10 characters including periods and dashes
Then choose a Currency
Add a Description of the entry for referencing in your reports
Choose the Accounts and enter in the amount in either the Debit or Credit fields - at least one account should be debited and one account should be credited
If needed, select Add a Line to add more accounts
Select Save to finish and the journal entry will be recorded.
Edit a Journal Entry
If a journal entry is missing information, or you need to correct or clear out an error, you can edit the journal entry with the below steps:
As an accountant, or with Advanced Accounting activated, select the Accounting section
Then select the Journal Entries sub-section
Select the journal entry you want to edit from the list
Then select the Edit Entry button
Edit any information as needed and select the Save button.
Current Assets - Used in daily operations of your business and can be converted into cash easily
Long-Term Assets - Typically last longer than a year compared to current assets, are usually depreciated
Depreciation - Accounting process that ensures the cost of a long-term asset is allocated correctly over its useful life, due to different methods of calculating this, depreciation must be recorded manually
Liability
Loans - Amount that is borrowed and is meant to be paid back to the lender, including principal repayments and interest costs
Lines of Credit - Preset amount that is borrowed as needed, repaid and borrowed again on a revolving basis, including principal repayments and interest costs
Equity - An owner’s investment into their business as well as any withdrawals from the business. This includes withdrawing funds for personal use or depositing funds from a personal account to a business account to help with cash flow