Payments

You record all payments in financial journals, such as the cash book or bank journal. In principle, you require just as many journals as you have cash and bank account numbers. With the input of payments to creditors or from debtors, you can reconcile outstanding items directly.

Note:

You can save a lot of time by importing electronic bank statements.

In doing so, you copy your bank statement lines to Profit and you do not need to enter them manually anymore. Profit will generally recognise the payments for outstanding items and it will reconcile the entries in question directly. Any unrecognised outstanding items will have to be reconciled manually.

Content

Description

You use a separate journal with a fixed contra account (ledger account) for each bank account number. In this way, the entries on a bank account number always correspond with the entries that are posted to the fixed contra account. Receipts are debited, expenditures are credited.

Write off outstanding items (reconcile)

Many payments concern outstanding items for debtors and creditors. When you register a payment, you can immediately write off the outstanding items. Profit uses the term 'reconciliation' for this.

Journal entry for a payment to a creditor:

Account

Debit

Credit

Creditors

-,-

 

To bank

 

-,-

Journal entry for a receipt from a debtor:

Account

Debit

Credit

Bank

-,-

 

To Debtors

 

-,-

A payment difference can originate for an outstanding item. You can write this off directly if the payment difference is allowed based on the financial settings. If the payment difference is larger than the limit amount, you cannot enter it off as a payment difference.

Enter interest on reminders when reconciling

When reconciling a debtor or other payment, if the amount received is more than the invoice amount, you can configure Profit to consider the difference as interest due and to automatically enter this amount on a previously recorded ledger account.

Gifts to charitable institutions can immediately be registered as such via a bank journal. Profit treats an unknown payment (a payment that is unrelated to an outstanding item) as a gift. It is also possible to enter such a payment as an advance payment instead of as a gift.

You enter your donations in the bank journal for the bank account number that receives the donations. Profit will enter a donation as a advance payment and then immediately write it off. The following journal entries are then created:

  • Bank journal

Account

Debit

Credit

Bank

-,-

 

To Debtors

 

-,-
  • General journal

    For this, Profit uses the variable general journal and the Donations account you linked in the Administration settings.

Account

Debit

Credit

Debtors

-,-

 

To Gifts

 

-,-

If you change the journal entry in the bank journal afterwards, Profit also updates the reconciliation in the day book. Donations that are entered using Read bank statements can also be handled in this way: when processing the bank statement, you specify that the amount should be entered as a donation.

Preparation

Procedure