Common activities in FreshBooks like sending an Invoice, logging an Expense, or doing Bank Reconciliation, are all recorded in FreshBooks as Journal Entries that are automatically posted to your Chart of Accounts and your General Ledger Report. The General Ledger Report can be used to review Journal Entries, and below is a list of how all common treatments are recorded as Journal Entries in FreshBooks.
- Review Journal Entries
- Petty Cash Account
- Common Treatments
- Bank Reconciliation
- Expenses
- Invoices
- Payments
- For Migrated Accounts from FreshBooks Classic
Review Journal Entries
When reviewing Journal Entries, we recommend using the General Ledger Report. This is because Journal Entries are recorded differently when compared between the Chart of Accounts and the General Ledger Report:
| Chart of Accounts | General Ledger Report |
| Only displays the most updated Journal Entry affecting that account |
|
An Invoice is edited once, resulting in three entries in both the Accounts Receivable and Sales Accounts:
 
|
An invoice is edited once, resulting in one entry each in the Accounts Receivable and Sales Accounts:
 An entry for the updated amount is listed ($12.00 CAD)
|
Petty Cash Account
Note that Petty Cash is treated as a clearing account:
- All transactions are initially recorded in the Petty Cash Account (Payments received, Other Income entries deposited and Expenses paid out)
- The process of completing Bank Reconciliation (Bank Rec) will move transactions out of the Petty Cash Account into the connected Bank or Credit Card Account that you are reconciling
- Your Accountant can also reassign any transaction entered to other Accounts in the CoA with Journal Entries
Common Treatments
Each common treatment is written in the format of how they appear on the General Ledger Report:
Bank Reconciliation
Opening Balances
An Opening Balance of $10 is entered for a Bank Account:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Bank Account (1000 - #) | Initial Balance / Initial Balance | Jan 1, 2020 | 10.00 | - |
| Opening Balance | Opening Balance Adjustments (3001 - 4) | Initial Balance / Initial Balance | Jan 1, 2020 | - | 10.00 |
An Opening Balance is reset for a Bank Account (from $10 to $12). The original Opening Balance entry is updated in the General Ledger Report:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Bank Account (1000 - #) | Initial Balance / Initial Balance | Jan 1, 2020 | 12.00 | - |
| Opening Balance | Opening Balance Adjustments (3001 - 4) | Initial Balance / Initial Balance | Jan 1, 2020 | - | 12.00 |
An Opening Balance of $10 is entered for a Credit Card Account:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Opening Balance | Opening Balance Adjustments (3001 - 4) | Initial Balance / Initial Balance | Jan 1, 2020 | 10.00 | - |
| Credit Cards | Credit Card Account (2004 - #) | Initial Balance / Initial Balance | Jan 1, 2020 | - | 10.00 |
An Opening Balance is reset for a Credit Card Account ($10 to $12). The original entry is updated for the new Opening Balance entered:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Opening Balance | Opening Balance Adjustments (3001 - 4) | Initial Balance / Initial Balance | Jan 1, 2020 | 12.00 | - |
| Credit Cards | Credit Card Account (2004 - #) | Initial Balance / Initial Balance | Jan 1, 2020 | - | 12.00 |
Unreconciled Transactions in Bank Rec
Money Inflow
A Money Inflow transaction (positive amount) is imported in Bank Rec. It appears as unreconciled on the left side in Bank Rec and no entries are created upon import.
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| No active accounts found. Please adjust the range. | |||||
Money Outflow
A Money Outflow transaction (negative amount) is imported in Bank Rec. It appears as unreconciled on the left side in Bank Rec. An Expense entry is automatically created via Bank Connections:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Operating Expenses | Travel* (6000 - #) | Expense / Expense | Jan 1, 2020 | 10.00 | - |
| Cash | Petty Cash (1000 - #) | Expense / Expense | Jan 1, 2020 | - | 10.00 |
*Travel is an Expense Category/Account assigned to the Expense.
Reconciled Transactions in Bank Rec - Money Inflow
Note: After a transaction is matched or marked in Bank Rec, the entry will be reflected in the Bank Account or Credit Card Account instead of Petty Cash. Credit Notes do not appear in Bank Reconciliation as no cash is exchanged in the transaction. If you need to reconcile a Credit received in a Bank Account, an Overpayment or Prepayment Credit can be created instead.
Expense Refund
A Money Inflow transaction of $10 is Marked as an Expense Refund in Bank Rec. The amount is recognized in the Expense Category / Account selected on the refund in Bank Rec:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash or Credit Cards | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Expense Refund / Expense Refund | Jan 1, 2020 | 10.00 | - |
| Operating Expenses or Cost of Goods Sold | Travel* (6000 - #) or Travel* (5000 - #) | Expense Refund / Expense Refund | Jan 1, 2020 | - | 10.00 |
*Travel is an Expense Category/Account assigned to the Expense.
Other Income
A Money Inflow transaction of $10 on the left is matched to a Jan 1, 2020 Other Income entry on the right in Bank Rec:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash or Credit Cards | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Other Income / Other Income | Jan 1, 2020 | 10.00 | - |
| Revenue | Sales (4000 - #) | Other Income / Other Income | Jan 1, 2020 | - | 10.00 |
Overpayment Credits
An Overpayment Credit is matched in Bank Rec. Matched Overpayment Credits will be reflected in the Bank or Credit Card Account instead of Petty Cash:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash or Credit Cards | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Credit / Overpayment Credit 000001 | Jan 1, 2020 | 10.00 | - |
| Customer Credit | Customer Credit (2003 - #) | Credit / Overpayment Credit 000001 | Jan 1, 2020 | - | 10.00 |
Owner’s Equity - Contribution
A Money Inflow transaction of $10 is Marked as Owner's Equity in Bank Rec for an Owner’s Equity Contribution. The amount is cleared out of Petty Cash and recognized in Owner’s Equity:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash or Credit Cards | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Owner's Equity / Owner's Equity | Jan 1, 2020 | 10.00 | - |
| Owner's Equity | Owner's Equity (3000 - #) | Owner's Equity / Owner's Equity | Jan 1, 2020 | - | 10.00 |
Payment
A Money Inflow transaction of $10 on the left is matched to a Jan 1, 2020 Payment applied on an Invoice on the right in Bank Rec:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash or Credit Cards | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Payment / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 1, 2020 | - | 10.00 |
Prepayment Credits
A Prepayment Credit is matched in Bank Rec. Matched Prepayment Credits will be reflected in the Bank or Credit Card Account instead of Petty Cash:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash or Credit Cards | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Credit / Prepayment Credit 000001 | Jan 1, 2020 | 10.00 | - |
| Customer Credit | Customer Credit (2003 - #) | Credit / Prepayment Credit 000001 | Jan 1, 2020 | - | 10.00 |
Transfer - Inflow
A Money Inflow transaction of $10 is Marked as a Transfer in Bank Rec. The amount is cleared out of Petty Cash and recognized in the Bank / Credit Card Account:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash or Credit Cards | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Bank Transfer / Bank Transfer | Jan 1, 2020 | 10.00 | - |
| Cash | Petty Cash (1000 - #) | Bank Transfer / Bank Transfer | Jan 1, 2020 | - | 10.00 |
Reconciled Transactions in Bank Rec - Money Outflow
All Money Outflow transactions automatically create Expense entries that can be found in both the Expenses section and on the FreshBooks Entries (right side) of Unmatched in Bank Rec.
Bill Payments
A Bill Payment is matched in Bank Rec. Matched Bill Payments will be reflected in the Bank or Credit Card Account instead of Petty Cash:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Payable | Accounts Payable (2000 - 3) | Bill Payment / Bill Payment | Jan 1, 2020 | 10.00 | - |
| Cash or Credit Cards | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Bill Payment / Bill Payment | Jan 1, 2020 | - | 10.00 |
Expenses
An Expense is matched in Bank Rec. Matched Expenses will be reflected in the Bank or Credit Card Account instead of Petty Cash:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Operating Expenses | Travel* (6000 - #) | Expense / Expense | Jan 1, 2020 | 10.00 | - |
| Cash or Credit Cards | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Expense / Expense | Jan 1, 2020 | - | 10.00 |
*Travel is an Expense Category/Account assigned to the Expense.
Owner’s Equity - Draw
A Money Outflow transaction is Marked as Owner's Equity in Bank Rec for an Owner’s Equity Draw. This sometimes includes personal expenses processed in a business account. The original Expense entry created via Bank Connections is automatically deleted.
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Owner's Equity | Owner's Equity (3000 - #) | Owner's Equity / Owner's Equity | Jan 1, 2020 | 10.00 | - |
| Cash or Credit Cards | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Owner's Equity / Owner's Equity | Jan 1, 2020 | - | 10.00 |
Transfer - Outflow
A Money Outflow transaction of $10 is Marked as a Transfer in Bank Rec. The original expense entry created via Bank Connections is automatically deleted. The amount is cleared out of Petty Cash and recognized in the Bank / Credit Card Account:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Bank Transfer / Bank Transfer | Jan 1, 2020 | 10.00 | - |
| Cash or Credit Cards | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Bank Transfer / Bank Transfer | Jan 1, 2020 | - | 10.00 |
Expenses
An Expense is created. This Expense is categorized under Travel and is not marked as Cost of Goods Sold (COGS):
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Operating Expenses | Travel* (6000 - #) | Expense / Expense | Jan 1, 2020 | 10.00 | - |
| Cash | Petty Cash (1000 - #) | Expense / Expense | Jan 1, 2020 | - | 10.00 |
*The Account is Travel, and the Parent Account is Operating Expenses.
An Expense is created. This Expense is categorized under Travel and is marked as Cost of Goods Sold (COGS). The entry is the same for Expenses whether they’re marked as billable or non-billable:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cost of Goods Sold | Travel* (5000 - #) | Expense / Expense | Jan 1, 2020 | 10.00 | - |
| Cash | Petty Cash (1000 - #) | Expense / Expense | Jan 1, 2020 | - | 10.00 |
*The Account is Travel, and the Parent Account is Costs of Goods Sold.
An Expense is created with Sales Tax applied. This Expense is categorized under Travel and is not marked as Cost of Goods Sold (COGS):
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Operating Expenses | Travel* (6000 - #) | Expense / Expense | Jan 1, 2020 | 9.00 | - |
| Taxes Paid | Sales Tax* (6001 - #) | Expense / Expense | Jan 1, 2020 | 1.00 | - |
| Cash | Petty Cash (1000 - #) | Expense / Expense | Jan 1, 2020 | - | 10.00 |
*The Taxes Paid account appears as the Sales Tax name assigned to the created tax rate. A Taxes Paid account will also be automatically created in your Chart of Accounts the first time the tax rate is applied to an Expense.
An Expense categorized as Travel is imported via a Bank Connection from a bank account or a credit card:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Operating Expenses | Travel* (6000 - #) | Expense / Expense | Jan 1, 2020 | 10.00 | - |
| Cash | Petty Cash (1000 - #) | Expense / Expense | Jan 1, 2020 | - | 10.00 |
Even though this Expense has been imported through a Bank Connection, it will flow through Petty Cash until it is matched in Bank Rec. To see the result of matching this transaction in Bank Rec, refer to the Reconciled Transactions in Bank Rec - Money Outflow section.
Bills
A Bill is created. This Bill is categorized under Advertising:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Operating Expenses | Advertising* (6000 - #) | Bill / Bill | Jan 1, 2020 | 10.00 | - |
| Accounts Payable | Accounts Payable (2000 - 3) | Bill / Bill | Jan 1, 2020 | - | 10.00 |
*The Account is Advertising, and the Parent Account is Operating Expenses.
A Bill is created with Sales Tax applied. This Bill is categorized under Advertising.
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Operating Expenses | Advertising* (6000 - #) | Bill / Bill | Jan 1, 2020 | 9.00 | - |
| Taxes Paid | Sales Tax* (6000 - 1) | Bill / Bill | Jan 1, 2020 | 1.00 | |
| Accounts Payable | Accounts Payable (2000 - 3) | Bill / Bill | Jan 1, 2020 | - | 10.00 |
*The Taxes Paid account appears as the Sales Tax name assigned to the created tax rate. A Taxes Paid account will also be automatically created in your Chart of Accounts the first time the tax rate is applied to a Bill.
Bill Payments
A full Bill Payment is added on Jan 1, 2020 onto a $10 Bill:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Payable | Accounts Payable (2000 - 3) | Bill Payment / Bill Payment | Jan 1, 2020 | 10.00 | - |
| Cash | Petty Cash (1000 - #) | Bill Payment / Bill Payment | Jan 1, 2020 | - | 10.00 |
A Bill Payment has an amount updated from $10 to $8 on Jan 2, 2020. Only the updated transaction can be viewed in the General Ledger Report:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Payable | Accounts Payable (2000 - 3) | Bill Payment / Bill Payment | Jan 2, 2020 | 8.00 | - |
| Cash | Petty Cash (1000 - #) | Bill Payment / Bill Payment | Jan 2, 2020 | - | 8.00 |
A Bill Payment is deleted. No entry; the original entry is deleted from the General Ledger Report:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| No active accounts found. Please adjust the range. | |||||
Invoices
An Invoice is sent for a billed service or item sale:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Receivable | Accounts Receivable (1200 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Revenue | Sales (4000 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 10.00 |
A billed Invoice has an amount updated (e.g., from $10 to $12). The original entry is updated in the General Ledger Report:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Receivable | Accounts Receivable (1200 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 12.00 | - |
| Revenue | Sales (4000 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 12.00 |
A billed Invoice is deleted. No entry; the original entry is deleted from the General Ledger Report:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| No active accounts found. Please adjust the range. | |||||
A billed Invoice with Sales Tax applied on its line items is created:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Receivable | Accounts Receivable (1200 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Taxes Payable | Sales Tax* (2001 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 1.00 |
| Revenue | Sales (4000 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 9.00 |
*The Taxes Payable account appears as the Sales Tax name assigned to the created tax rate. A Taxes Paid account will also be automatically created in your Chart of Accounts the first time the tax rate is applied to a billed service, item sale or Other Income entry.
Billed Expenses
An Invoice is created to re-bill an Expense to a Client, with no markup. Before the Invoice is created, an entry is created for the re-billed Expense when the expense is entered and marked as billable.
Expenses that are marked as billable are also automatically marked as Cost of Goods Sold (COGS). You can also un-mark them as COGS in your advanced Expense settings.
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Operating Expenses or Cost of Goods Sold | Travel* (6000 - #) or Travel* (5000 - #) | Expense / Expense | Jan 1, 2020 | 10.00 | - |
| Cash | Petty Cash (1000 - #) | Expense / Expense | Jan 1, 2020 | - | 10.00 |
*Travel is an Expense Category/Account assigned to the Expense.
The Billed Expenses entry, with no markup, is created when the Invoice is sent to the Client:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Receivable | Accounts Receivable (1200 - #) | Invoice / Invoice 000001 | Jan 3, 2020 | 10.00 | - |
| Revenue | Billed Expenses (4000 - #) | Invoice / Invoice 000001 | Jan 3, 2020 | - | 10.00 |
An Invoice is created to re-bill an Expense to a Client, with a $1 markup. Before the Invoice is created, an entry is created for the re-billed Expense when the expense is entered and marked as billable.
Expenses that are marked as billable are also automatically marked as Cost of Goods Sold (COGS). You can also un-mark them as COGS in your advanced Expense settings.
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Operating Expenses or Cost of Goods Sold | Travel* (6000 - #) or Travel* (5000 - #) | Expense / Expense | Jan 1, 2020 | 10.00 | - |
| Cash | Petty Cash (1000 - #) | Expense / Expense | Jan 1, 2020 | - | 10.00 |
The Billed Expenses entry, with a $1 markup, is created when the Invoice is sent to the Client:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Receivable | Accounts Receivable (1200 - #) | Invoice / Invoice 000001 | Jan 3, 2020 | 11.00 | - |
| Revenue | Billed Expenses (4000 - #) | Invoice / Invoice 000001 | Jan 3, 2020 | - | 11.00 |
Deposits
Note: For Reports run on Billed/Accrual, because deposit payments are made to you prior to the delivery of goods or services, they are not initially recorded as income. Once your client has made a payment toward the remaining balance of the invoice, all payments received will be recorded as income.
An Invoice is sent with a Deposit requested on Jan 1, 2020 (Deposit is $3, Invoice total is $10):
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Receivable | Accounts Receivable (1200 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Unearned Revenue | Unearned Revenue (2002 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 10.00 |
A Payment of $3 for the full Deposit amount is added onto an Invoice with a Deposit requested on the same date Jan 1, 2020:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Payment / Invoice 000001 | Jan 1, 2020 | 3.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 1, 2020 | - | 3.00 |
Then on Jan 2, 2020, any amount (e.g. $1) above the Deposit is paid subsequently on an Invoice with a Deposit requested:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Payment / Invoice 000001 | Jan 2, 2020 | 1.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 2, 2020 | - | 1.00 |
The full amount of the Invoice is now recognized as income:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Unearned Revenue | Unearned Revenue (2002 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Revenue | Sales (4000 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 10.00 |
Discounts
A billed Invoice with a 10% discount is created:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Receivable | Accounts Receivable (1200 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 9.00 | - |
| Revenue | Discounts (4000 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 1.00 | |
| Revenue | Sales (4000 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 1.00 |
An Invoice with a 10% discount is sent with a Deposit requested on Jan 1, 2020 (Deposit is $3, Invoice total is $9):
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Receivable | Accounts Receivable (1200 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 9.00 | - |
| Deferred Discounts | Deferred Discounts (1600 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 1.00 | |
| Unearned Revenue | Unearned Revenue (2002 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 1.00 |
A Payment of $3 for the full Deposit amount is added onto an Invoice with a Deposit requested on the same date Jan 1, 2020:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Payment / Invoice 000001 | Jan 1, 2020 | 3.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 1, 2020 | - | 3.00 |
Then on Jan 2, 2020, any amount (e.g. $1) above the Deposit is paid subsequently on the Invoice with a Deposit requested. The full amount of the Invoice is now recognized as income, and the deferred discount is also recognized as a discount:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Payment / Invoice 000001 | Jan 2, 2020 | 1.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 2, 2020 | - | 1.00 |
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Unearned Revenue | Unearned Revenue (2002 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Revenue | Sales (4000 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 10.00 |
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Revenue | Discounts (4000 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 1.00 | - |
| Deferred Discounts | Deferred Discounts (1600 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 1.00 |
Drafts
A draft Invoice is created and saved. No entry is made for Invoices with a draft status:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| No active accounts found. Please adjust the range. | |||||
A draft Invoice is partially paid (e.g., $5 payment on a $10 invoice). When the partial Payment is added onto the draft Invoice, both the Invoice and the Payment are recorded:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Receivable | Accounts Receivable (1200 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Revenue | Sales (4000 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 10.00 |
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Payment / Invoice 000001 | Jan 1, 2020 | 5.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 1, 2020 | - | 5.00 |
Payment Schedules
An Invoice is sent for a billed service or item sale with a Payment Schedule applied. The full amount of income is recognized when the Invoice is sent:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Accounts Receivable | Accounts Receivable (1200 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Revenue | Sales (4000 - #) | Invoice / Invoice 000001 | Jan 1, 2020 | - | 10.00 |
Retainers
A Retainer is created and saved. No entry is made for Retainers.
Note: A Journal Entry is recorded once the Invoice is generated from the Retainer.
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| No active accounts found. Please adjust the range. | |||||
Payments
A full Payment is added on Jan 1, 2020 onto a $10 Invoice:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Payment / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 1, 2020 | - | 10.00 |
A Payment has an amount updated from $10 to $8 on Jan 2, 2020. Only the updated transaction can be viewed in the General Ledger Report:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Payment / Invoice 000001 | Jan 2, 2020 | 8.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 2, 2020 | - | 8.00 |
A Payment is deleted. The original entry is deleted from the General Ledger Report:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| No active accounts found. Please adjust your range. | |||||
Credit Notes
A Credit Note is created (either saved or sent):
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Revenue | Sales (4000 - #) | Credit Note 000001 | Jan 1, 2020 | 10.00 | - |
| Customer Credit | Customer Credit (2003 - #) | Credit Note 000001 | Jan 1, 2020 | - | 10.00 |
A Credit Note with Sales Tax applied on its line items is created (either saved or sent):
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Revenue | Sales (4000 - #) | Credit Note 000001 | Jan 1, 2020 | 9.00 | - |
| Taxes Payable | Sales Tax* (2001 - #) | Credit Note 000001 | Jan 1, 2020 | 1.00 | - |
| Customer Credit | Customer Credit (2003 - #) | Credit Note 000001 | Jan 1, 2020 | - | 10.00 |
*The Taxes Payable account appears as the Sales Tax name assigned to the created tax rate. A Taxes Paid account will also be automatically created in your Chart of Accounts the first time the tax rate is applied to a billed service, item sale or Other Income entry.
A Credit Note is deleted from the Client Profile. The original entry is deleted from the General Ledger Report:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| No active accounts found. Please adjust the range. | |||||
A Credit Note is applied to an Invoice:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Customer Credit | Customer Credit (2003 - #) | Payment / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 1, 2020 | - | 10.00 |
Overpayment Credits
A $10 Overpayment Credit is created from a Payment entered over the amount on an Invoice (e.g. $110 entered for a $100 Invoice):
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Payment / Invoice 000001 | Jan 1, 2020 | 100.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 1, 2020 | - | 100.00 |
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Credit / Overpayment Credit 000001 | Jan 1, 2020 / Overpayment: Invoice 000001 | 10.00 | - |
| Customer Credit | Customer Credit (2003 - #) | Credit / Overpayment Credit 000001 | Jan 1, 2020 / Overpayment: Invoice 000001 | - | 10.00 |
An Overpayment Credit is deleted from the Client Profile. The original entry is deleted from the General Ledger Report:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| No active accounts found. Please adjust the range. | |||||
An Overpayment Credit is applied to an Invoice:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Customer Credit | Customer Credit (2003 - #) | Payment / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 1, 2020 | - | 10.00 |
Prepayment Credits
A Prepayment Credit is created (either saved or sent):
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Credit / Prepayment Credit 000001 | Jan 1, 2020 | 10.00 | - |
| Customer Credit | Customer Credit (2003 - #) | Credit / Prepayment Credit 000001 | Jan 1, 2020 | - | 10.00 |
A Prepayment Credit is deleted from the Client Profile. The original entry is deleted from the General Ledger Report:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| No active accounts found. Please adjust the range. | |||||
A Prepayment Credit is applied to an Invoice:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Customer Credit | Customer Credit (2003 - #) | Payment / Invoice 000001 | Jan 1, 2020 | 10.00 | - |
| Accounts Receivable | Accounts Receivable (1200 - #) | Payment / Invoice 000001 | Jan 1, 2020 | - | 10.00 |
Other Income
An Other Income entry is created:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Cash | Petty Cash (1000 - #) | Other Income / Other Income | Jan 1, 2020 | 10.00 | - |
| Revenue | Sales (4000 - #) | Other Income / Other Income | Jan 1, 2020 | - | 10.00 |
An Other Income entry with Sales Tax is created:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Operating Expenses | Petty Cash (1000 - #) | Other Income / Other Income | Jan 1, 2020 | 10.00 | - |
| Taxes Payable | Sales Tax* (2001 - #) | Other Income / Other Income | Jan 1, 2020 | - | 1.00 |
| Revenue | Sales (4000 - #) | Other Income / Other Income | Jan 1, 2020 | - | 9.00 |
*The Taxes Payable account appears as the Sales Tax name assigned to the created tax rate. A Taxes Paid account will also be automatically created in your Chart of Accounts the first time the tax rate is applied to a billed service, item sale or Other Income entry.
For Migrated Accounts from FreshBooks Classic
Since FreshBooks Classic was built as a single-entry accounting system, the Bank Import feature only imported in transactions as Expenses (also known as money-out transactions). The new FreshBooks uses double-entry accounting instead. When migrating over to the new FreshBooks, these entries are recorded in Petty Cash until they can be reconciled and moved to the correct Account via Bank Reconciliation:
| Parent Account | Account | Transaction / Reference | Date / Client / Note | Debit | Credit |
| Operating Expenses | Travel* (6000 - #) | Expense / Expense | Jan 1, 2020 | 10.00 | - |
| Cash | Bank Account (1000 - #) / Credit Card Account (2004 - #) | Expense / Expense | Jan 1, 2020 | - | 10.00 |
*Travel is an Expense Category/Account assigned to the Expense.