How Are Common Transactions Recorded as Journal Entries?

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

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 AccountsGeneral Ledger Report
  • Displays all Journal Entries, including original entries, reversal entries and the updated entry created when a transaction has been edited
  • Each entry has its own line
  • Amounts are either positive (xx.xx) or negative (-xx.xx) based on the natural debit or credit balance of the account and whether the account balance is increasing or decreasing
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:
ChartOfAccountsAR.png


ChartOfAccountsSales.png
  1. First the original entry is listed ($10.00 CAD)
  2. Followed by the reversal entry (-$10.00 CAD)
  3. Then finally with the updated entry ($12.00 CAD).
An invoice is edited once, resulting in one entry each in the Accounts Receivable and Sales Accounts:
 
GeneralLedgerEntries.png
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

 
Bank/Credit Card Accounts are automatically created in the Chart of Accounts when you first enter an Opening Balance in Bank Rec. Each connected bank/credit card will have its own Bank/Credit Card Account. When an Opening Balance is entered in Bank Rec, the Opening Balance Adjustments Account is automatically created in the Chart of Accounts.
 
An Opening Balance of $10 is entered for a Bank Account:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashBank Account (1000 - #) Initial Balance / Initial BalanceJan 1, 202010.00-
Opening Balance Opening Balance Adjustments (3001 - 4)Initial Balance / Initial BalanceJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashBank Account (1000 - #) Initial Balance / Initial BalanceJan 1, 202012.00-
Opening Balance Opening Balance Adjustments (3001 - 4)Initial Balance / Initial BalanceJan 1, 2020-12.00
 
An Opening Balance of $10 is entered for a Credit Card Account:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Opening BalanceOpening Balance Adjustments (3001 - 4)Initial Balance / Initial BalanceJan 1, 202010.00-
Credit CardsCredit Card Account (2004 - #)Initial Balance / Initial BalanceJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Opening BalanceOpening Balance Adjustments (3001 - 4)Initial Balance / Initial BalanceJan 1, 202012.00-
Credit CardsCredit Card Account (2004 - #)Initial Balance / Initial BalanceJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Operating ExpensesTravel* (6000 - #)Expense / Expense Jan 1, 202010.00-
CashPetty Cash (1000 - #)Expense / ExpenseJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Cash or Credit CardsBank Account (1000 - #) / Credit Card Account (2004 - #)Expense Refund / Expense RefundJan 1, 202010.00-
Operating Expenses or Cost of Goods SoldTravel* (6000 - #) or Travel* (5000 - #)Expense Refund / Expense RefundJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Cash or Credit CardsBank Account (1000 - #) / Credit Card Account (2004 - #)Other Income / Other IncomeJan 1, 202010.00-
RevenueSales (4000 - #)Other Income / Other IncomeJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Cash or Credit CardsBank Account (1000 - #) / Credit Card Account (2004 - #)Credit / Overpayment Credit 000001Jan 1, 202010.00-
Customer CreditCustomer Credit (2003 - #)Credit / Overpayment Credit 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Cash or Credit CardsBank Account (1000 - #) / Credit Card Account (2004 - #)Owner's Equity / Owner's EquityJan 1, 202010.00-
Owner's EquityOwner's Equity (3000 - #)Owner's Equity / Owner's EquityJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Cash or Credit CardsBank Account (1000 - #) / Credit Card Account (2004 - #)Payment / Invoice 000001Jan 1, 202010.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Cash or Credit CardsBank Account (1000 - #) / Credit Card Account (2004 - #)Credit / Prepayment Credit 000001Jan 1, 202010.00-
Customer CreditCustomer Credit (2003 - #)Credit / Prepayment Credit 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Cash or Credit CardsBank Account (1000 - #) / Credit Card Account (2004 - #)Bank Transfer / Bank TransferJan 1, 202010.00-
CashPetty Cash (1000 - #)Bank Transfer / Bank TransferJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts PayableAccounts Payable (2000 - 3)Bill Payment / Bill PaymentJan 1, 202010.00-
Cash or Credit CardsBank Account (1000 - #) / Credit Card Account (2004 - #)Bill Payment / Bill PaymentJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Operating ExpensesTravel* (6000 - #)Expense / ExpenseJan 1, 202010.00-
Cash or Credit CardsBank Account (1000 - #) / Credit Card Account (2004 - #)Expense / ExpenseJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Owner's EquityOwner's Equity (3000 - #)Owner's Equity / Owner's EquityJan 1, 202010.00-
Cash or Credit CardsBank Account (1000 - #) / Credit Card Account (2004 - #)Owner's Equity / Owner's EquityJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Bank Transfer / Bank TransferJan 1, 202010.00-
Cash or Credit CardsBank Account (1000 - #) / Credit Card Account (2004 - #)Bank Transfer / Bank TransferJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Operating ExpensesTravel* (6000 - #)Expense / ExpenseJan 1, 202010.00-
CashPetty Cash (1000 - #)Expense / ExpenseJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Cost of Goods SoldTravel* (5000 - #)Expense / ExpenseJan 1, 202010.00-
CashPetty Cash (1000 - #)Expense / ExpenseJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Operating ExpensesTravel* (6000 - #)Expense / ExpenseJan 1, 20209.00-
Taxes PaidSales Tax* (6001 - #)Expense / ExpenseJan 1, 20201.00-
CashPetty Cash (1000 - #)Expense / ExpenseJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Operating ExpensesTravel* (6000 - #)Expense / ExpenseJan 1, 202010.00-
CashPetty Cash (1000 - #)Expense / ExpenseJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Operating ExpensesAdvertising* (6000 - #)Bill / BillJan 1, 202010.00-
Accounts PayableAccounts Payable (2000 - 3)Bill / BillJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Operating ExpensesAdvertising* (6000 - #)Bill / BillJan 1, 20209.00-
Taxes PaidSales Tax* (6000 - 1)Bill / BillJan 1, 20201.00 
Accounts PayableAccounts Payable (2000 - 3)Bill / BillJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts PayableAccounts Payable (2000 - 3)Bill Payment / Bill PaymentJan 1, 202010.00-
CashPetty Cash (1000 - #)Bill Payment / Bill PaymentJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts PayableAccounts Payable (2000 - 3)Bill Payment / Bill PaymentJan 2, 20208.00-
CashPetty Cash (1000 - #)Bill Payment / Bill PaymentJan 2, 2020-8.00
 
A Bill Payment is deleted. No entry; the original entry is deleted from the General Ledger Report:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
No active accounts found. Please adjust the range.
 

Invoices

An Invoice is sent for a billed service or item sale:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts ReceivableAccounts Receivable (1200 - #)Invoice / Invoice 000001Jan 1, 202010.00-
RevenueSales (4000 - #)Invoice / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts ReceivableAccounts Receivable (1200 - #)Invoice / Invoice 000001Jan 1, 202012.00-
RevenueSales (4000 - #)Invoice / Invoice 000001Jan 1, 2020-12.00
 
A billed Invoice is deleted. No entry; the original entry is deleted from the General Ledger Report:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
No active accounts found. Please adjust the range.
 
A billed Invoice with Sales Tax applied on its line items is created:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts ReceivableAccounts Receivable (1200 - #)Invoice / Invoice 000001Jan 1, 202010.00-
Taxes PayableSales Tax* (2001 - #)Invoice / Invoice 000001Jan 1, 2020-1.00 
RevenueSales (4000 - #)Invoice / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Operating Expenses or Cost of Goods SoldTravel* (6000 - #) or Travel* (5000 - #)Expense / ExpenseJan 1, 202010.00-
CashPetty Cash (1000 - #)Expense / ExpenseJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts ReceivableAccounts Receivable (1200 - #)Invoice / Invoice 000001Jan 3, 202010.00-
RevenueBilled Expenses (4000 - #)Invoice / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Operating Expenses or Cost of Goods SoldTravel* (6000 - #) or Travel* (5000 - #)Expense / ExpenseJan 1, 202010.00-
CashPetty Cash (1000 - #)Expense / ExpenseJan 1, 2020-10.00
The Billed Expenses entry, with a $1 markup, is created when the Invoice is sent to the Client:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts ReceivableAccounts Receivable (1200 - #)Invoice / Invoice 000001Jan 3, 202011.00-
RevenueBilled Expenses (4000 - #)Invoice / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts ReceivableAccounts Receivable (1200 - #)Invoice / Invoice 000001Jan 1, 202010.00-
Unearned RevenueUnearned Revenue (2002 - #)Invoice / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Payment / Invoice 000001Jan 1, 20203.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Payment / Invoice 000001Jan 2, 20201.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 2, 2020-1.00
 The full amount of the Invoice is now recognized as income:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Unearned RevenueUnearned Revenue (2002 - #)Invoice / Invoice 000001Jan 1, 202010.00-
RevenueSales (4000 - #)Invoice / Invoice 000001Jan 1, 2020-10.00
 

Discounts

A billed Invoice with a 10% discount is created:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts ReceivableAccounts Receivable (1200 - #)Invoice / Invoice 000001Jan 1, 20209.00-
RevenueDiscounts (4000 - #)Invoice / Invoice 000001Jan 1, 20201.00 
RevenueSales (4000 - #)Invoice / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts ReceivableAccounts Receivable (1200 - #)Invoice / Invoice 000001Jan 1, 20209.00-
Deferred DiscountsDeferred Discounts (1600 - #)Invoice / Invoice 000001Jan 1, 20201.00 
Unearned RevenueUnearned Revenue (2002 - #)Invoice / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Payment / Invoice 000001Jan 1, 20203.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Payment / Invoice 000001Jan 2, 20201.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 2, 2020-1.00
 
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Unearned RevenueUnearned Revenue (2002 - #)Invoice / Invoice 000001Jan 1, 202010.00-
RevenueSales (4000 - #)Invoice / Invoice 000001Jan 1, 2020-10.00
 
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
RevenueDiscounts (4000 - #)Invoice / Invoice 000001Jan 1, 20201.00-
Deferred DiscountsDeferred Discounts (1600 - #)Invoice / Invoice 000001Jan 1, 2020-1.00
 

Drafts 

A draft Invoice is created and saved. No entry is made for Invoices with a draft status:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts ReceivableAccounts Receivable (1200 - #)Invoice / Invoice 000001Jan 1, 202010.00-
RevenueSales (4000 - #)Invoice / Invoice 000001Jan 1, 2020-10.00
 
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Payment / Invoice 000001Jan 1, 20205.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Accounts ReceivableAccounts Receivable (1200 - #)Invoice / Invoice 000001Jan 1, 202010.00-
RevenueSales (4000 - #)Invoice / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
No active accounts found. Please adjust the range.
 

Payments

A full Payment is added on Jan 1, 2020 onto a $10 Invoice:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Payment / Invoice 000001Jan 1, 202010.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Payment / Invoice 000001Jan 2, 20208.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 2, 2020-8.00
 
A Payment is deleted. The original entry is deleted from the General Ledger Report:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
No active accounts found. Please adjust your range.
 

Credit Notes

A Credit Note is created (either saved or sent):
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
RevenueSales (4000 - #)Credit Note 000001Jan 1, 202010.00-
Customer CreditCustomer Credit (2003 - #)Credit Note 000001Jan 1, 2020-10.00
 
Credit Note with Sales Tax applied on its line items is created (either saved or sent):
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
RevenueSales (4000 - #)Credit Note 000001Jan 1, 20209.00-
Taxes PayableSales Tax* (2001 - #)Credit Note 000001Jan 1, 20201.00 
Customer CreditCustomer Credit (2003 - #)Credit Note 000001Jan 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.
 
Credit Note is deleted from the Client Profile. The original entry is deleted from the General Ledger Report:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
No active accounts found. Please adjust the range.
 
Credit Note is applied to an Invoice:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Customer CreditCustomer Credit (2003 - #)Payment / Invoice 000001Jan 1, 202010.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Payment / Invoice 000001Jan 1, 2020100.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 1, 2020 -100.00 
 
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Credit / Overpayment Credit 000001Jan 1, 2020 / Overpayment: Invoice 00000110.00-
Customer CreditCustomer Credit (2003 - #)Credit / Overpayment Credit 000001Jan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
No active accounts found. Please adjust the range.
 
An Overpayment Credit is applied to an Invoice:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Customer CreditCustomer Credit (2003 - #)Payment / Invoice 000001Jan 1, 202010.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 1, 2020 -10.00 
 

Prepayment Credits

A Prepayment Credit is created (either saved or sent):
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Credit / Prepayment Credit 000001Jan 1, 202010.00-
Customer CreditCustomer Credit (2003 - #)Credit / Prepayment Credit 000001Jan 1, 2020-10.00 
 
Prepayment Credit is deleted from the Client Profile. The original entry is deleted from the General Ledger Report:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
No active accounts found. Please adjust the range.
 
Prepayment Credit is applied to an Invoice:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Customer CreditCustomer Credit (2003 - #)Payment / Invoice 000001Jan 1, 202010.00-
Accounts ReceivableAccounts Receivable (1200 - #)Payment / Invoice 000001Jan 1, 2020 -10.00 
 

Other Income

An Other Income entry is created:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
CashPetty Cash (1000 - #)Other Income / Other IncomeJan 1, 202010.00-
RevenueSales (4000 - #)Other Income / Other IncomeJan 1, 2020-10.00
 
An Other Income entry with Sales Tax is created:
Parent AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Operating ExpensesPetty Cash (1000 - #)Other Income / Other IncomeJan 1, 202010.00-
Taxes PayableSales Tax* (2001 - #)Other Income / Other IncomeJan 1, 2020-1.00
RevenueSales (4000 - #)Other Income / Other IncomeJan 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 AccountAccountTransaction / ReferenceDate / Client / NoteDebitCredit
Operating ExpensesTravel* (6000 - #)Expense / ExpenseJan 1, 202010.00-
CashBank Account (1000 - #) / Credit Card Account (2004 - #)Expense / ExpenseJan 1, 2020-10.00
*Travel is an Expense Category/Account assigned to the Expense.