Chart of Accounts – a list of all accounts used to record financial transactions in the organization’s general ledger.

Financial reports in the system are based on double-entry bookkeeping transactions.

Double-entry bookkeeping is used to ensure the accuracy and balance of financial transactions. This means that each financial transaction is recorded with two entries: one in the debit and the other in the credit. The goal is to maintain a balance between assets, liabilities, and equity.

An accounting entry is a record in accounting that reflects a financial transaction. It consists of two parts: debit and credit, according to the double-entry principle. Each entry affects at least two accounts: one is debited, and the other is credited.

Key Elements of an Accounting Entry:

Transaction Date – the date when the transaction occurred.

Debit Account – where the resource is received, or the liability is increased.

Credit Account – where the resource is coming from, or the liability is decreased.

Amount – the transaction amount.

Transaction Description – an explanation or reason for the entry.

We offer a standard chart of accounts based on IFRS, and if necessary, you can make the adjustments you need.

The account code structure is as follows: XX.YYY.ZZZ, where:

• XX – account category;

• YYY – group;

• ZZZ – position.

The accounts are grouped by categories as follows:

Generation of automatic entries

Some entries are created by the system based on invoices and accrued salaries. The account settings used for these can be configured through Company > Settings > P&L Policy.

Example settings

For standard invoices (Invoice lines), an entry will be generated based on the Income date:

• Debit: 20.036.002 — Future trade accounts receivable

• Credit: 70.001.001 — Revenue from software development services

On the Issue date of the invoice, an entry will be generated:

• Debit: 20.036.001 — Current trade accounts receivable

• Credit: 20.036.002 — Future trade accounts receivable

A liability is created, and the entry will be attributed to the Revenue - T&M line in the P&L report. Thus, the revenue is recorded with the invoice and reflected in the P&L report.

Examples of manual entries

For bank transactions, you must manually detail the entries to classify incoming or outgoing funds.

For example, if an invoice for $1,200 was issued to a client, but they paid $1,175, with $25 deducted as a bank fee:

The payment results in the following entries:

• Debit: 20.031.001 — Bank

• Credit: 20.036.001 — Current trade accounts receivable

These entries do not appear in the P&L report but are shown in the balance sheet.

If the company covers the bank fee, the following entry is made:

• Debit: 85.001.001 — Bank fees

• Credit: 20.036.001 — Current trade accounts receivable

In the case of an expense transaction, such as purchasing office equipment, the expenses have the following accounts:

• Debit: 80.017.*** — Office equipment / Office supplies / Food supplies / …

• Credit: 20.031.*** — Bank / Corporate card holders / …

The appropriate debit account is selected to classify the expense, and the relevant credit account is chosen for the type of payment source.