Journal Entries

Use journal entries to record transactions that don’t necessarily identify strictly as a Sale or Purchase.

Recording Expenses

When you have expenses that you pay at the time of purchase, you can record an Expense directly using Journal Entry.

  1. Go to Purchases > Journal Entry and click on the blue plus button. A Journal Entry form will open.
  2. Here you will have to make at least two entries, one for Debit and one for Credit. Let’s say you incur an expense of ₹5,000 for traveling to a client site, and you paid it directly from your Bank Account, then you must do the following entries:
Account Debit Credit
Bank Account ₹5,000
Travel Expenses ₹5,000

Recording Expenses

When you are making a Journal Entry, you must ensure that the total amount in the Debit column should equal the total amount in the Credit column.

After you Save and Submit the Journal Entry, Frappe Books will do the necessary ledger entries. You can check the entries from Menu > Ledger Entries.

Recording prepayments

When a customer pays for a product or service that you haven’t delivered yet, it cannot be booked as Income yet. This is a Liability for your business to fulfill later.

  1. Go to Sales > Journal Entry and click on the blue plus button. A Journal Entry form will open.
  2. Now you will make two entries, one which Debits the amount into the Bank Account because you have received the payment, another which Credits the amount into a Liability account you may create known as Prepayments.
Account Debit Credit
Bank Account ₹5,000
Prepayment ₹5,000

Recording Prepayments

These are two examples of how you can make direct Journal Entries to account for transactions that are different from Sales or Purchases.