Journal Entry

November 5, 2025

Overview

The Journal Entry in DIGITZ ERP is a core accounting document used to record financial transactions that are not automatically generated by other modules.
It provides a flexible way to adjust, reclassify, or correct balances between accounts while maintaining compliance with the double-entry accounting principle.

Every Journal Entry consists of at least one debit and one credit, and the total debits must always equal total credits — ensuring balance and accuracy in the company’s financial ledgers.

Purpose

To record manual or adjustment-based financial transactions that do not arise directly from operational documents such as invoices or payments.
Journal Entries are essential for managing accruals, adjustments, provisions, depreciation, inter-branch transfers, and correction postings.

How It Works

A Journal Entry allows users to debit and credit specific accounts to record financial adjustments manually.
The system ensures that only valid account types are used and that the debit and credit totals are balanced before submission.
It can be used for multiple purposes such as reclassifying balances, adjusting expenses, transferring between cost centers, or recording non-cash transactions.
Upon submission, DIGITZ ERP automatically updates all relevant ledgers under the Perpetual Accounting method, ensuring real-time accuracy in reports and statements.

Key Fields

Posting Date – The date on which the transaction is recorded in the books.
Company – The company under which the journal is created.
Account – The ledger account to be debited or credited.
Debit Amount – The value debited to the account.
Credit Amount – The value credited to the account.
Reference Type / Reference Name – Optionally links the journal entry to another document for traceability.
Project / Cost Center – Allocates the transaction to a specific project or business unit.
Remarks / Narration – Description explaining the reason for the adjustment.

Typical Use Cases

Adjustment Entries – For correcting or reallocating amounts between accounts.
Accrual Entries – For recording expenses or income that have been incurred but not yet paid or received.
Provision Entries – For booking expected expenses or liabilities (e.g., salary provision, audit fees).
Depreciation Entries – For posting periodic depreciation on fixed assets.
Inter-Branch or Inter-Department Transfers – For balancing entries between divisions or cost centers.
Opening Balances – For setting up balances during company setup or year transition.

Workflow

Go to Accounts → Journal Entry → New.
Enter the Posting Date and select the Company.
Add one or more Debit and Credit accounts ensuring that total debits equal total credits.
Optionally select a Project, Cost Center, or Reference Document.
Add remarks explaining the reason for the entry.
Save and Submit the Journal Entry.

Once submitted, the system automatically creates ledger postings for all involved accounts and updates financial reports.

Posting Behaviour

Each Journal Entry follows the double-entry principle — total debits must always equal total credits.
Upon submission, DIGITZ ERP creates balanced ledger postings as follows:
- Debit: Account being increased (e.g., Expense, Asset).
- Credit: Account being decreased (e.g., Income, Liability, Equity).
The system validates that both sides of the entry are equal before submission.
Adjustments are reflected instantly across financial reports including Trial Balance, Balance Sheet, and Profit & Loss.

Integration

The Journal Entry integrates with:

General Ledger – Reflects all manual adjustments and entries.
Cost Centers / Projects – Allows allocation of entries for detailed reporting.
Financial Reports – Updates in real time in the Trial Balance, Profit & Loss, and Balance Sheet.
Audit Trail – Maintains complete traceability of all manual postings and user actions.

Special Features

Multi-line Entries – Supports multiple debit and credit lines in a single journal.
Inter-Company Adjustments – Can post between companies if multi-company accounting is enabled.
Reversal Entries – Option to auto-reverse specific entries in the next accounting period.
Validation Control – Enforces debit-credit equality and account type checks before posting.
Document Reference – Maintains linkage to related documents for easy traceability.

Conclusion

The Journal Entry in DIGITZ ERP provides a robust and flexible tool for managing all types of accounting adjustments and financial corrections.
With built-in validations, double-entry enforcement, and full integration with ledgers and reports, it ensures precise control, transparency, and auditability of financial records across the ERP system.