What are journal entries?

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.
The Journal Entries sub-section, along with customizable Chart of Accounts, are only available on Plus, Premium, and Select plans.
The Journal Entries sub-section will only list manual journal entries created from January 15, 2024 onwards. Our product team is working on making older journal entries available in the near future.

Principles Used

  1. All transactions entered in your FreshBooks account will have a corresponding journal entry that affects at least two accounts in your Chart of Accounts - review How are common transactions recorded as journal entries?
  2. 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:
  1. Select the Accounting section
  2. Then select the Journal Entries sub-section.
    Journal entries subsection selected underneath accounting section.
From the Journal Entries section, select either:
Journal entries page with one journal entry listed and buttons to select.
  • 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:
  1. 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
  2. Select the Accounting section
  3. Then select the Journal Entries sub-section
  4. Next, select the Create Journal Entry button
  5. Enter the Date and Name of the new journal entry
    New journal entry with fields to fill out.
  6. Next, enter the alphanumeric Number of the journal entry, up to 10 characters including periods and dashes
  7. Then choose a Currency
  8. Add a Description of the entry for referencing in your reports
  9. 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
  10. If needed, select Add a Line to add more accounts
  11. 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:
  1. As an accountant, or with Advanced Accounting activated, select the Accounting section
  2. Then select the Journal Entries sub-section
  3. Select the journal entry you want to edit from the list
  4. Then select the Edit Entry button
  5. Edit any information as needed and select the Save button.

Journal Entries for Specific Account Types

Manual journal entries can be created for the below scenarios. If needed, these can be reconciled in bank reconciliation.
  • Asset
    • 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