The Accounting Cycle in the system: From Journal Entries to Financial Statements

This guide explains the complete accounting cycle in the system, from setting up the Chart of Accounts and entering opening balances, through adding Clients and Suppliers and recording Journal Entries, to generating reports and financial statements and closing the period. For each step, you will see where to perform it, what happens in the system, and which report to review.

Overview of the Accounting Cycle

Step	Where to Perform It	Result
Set up the Chart of Accounts	Accounting > Chart of Accounts	Accounts are ready for recording transactions.
Opening balances	Client, Supplier, and Inventory records, and Journal Entries	Correct balances as of the start date.
Clients and Suppliers	Clients and Purchases	A sub-account is created automatically for each Client and Supplier.
Journal Entries	Automatic from transactions, or manual from Journal Entries	Financial transactions are recorded.
Posting to the ledger	Automatic when you save	Account balances update immediately.
Reports	Reports > Accounting Reports	Track transactions and balances.
Financial statements	Income Statement and Balance Sheet	Business results and financial position.
Period closing	Financial Periods	Protects the period from edits and carries forward the result.

Step 1: Set Up the Chart of Accounts

The Chart of Accounts comes preloaded with the main accounts: Assets, Liabilities, Equity, Revenue, and Expenses. Review it and add any main and sub accounts your business needs before you record transactions.

• Don’t create manual accounts for Clients, Suppliers, Treasuries, warehouses, or Assets; the system automatically creates a sub account for each one when you add it.
• You can import the Chart of Accounts from an Excel file instead of entering it manually.

Step 2: Enter Opening Balances

Choose a clear start date for working on the system, and enter all opening balances using that date:

Balance Type	Where to Enter It
Client balances	The Opening Balance field in the client’s profile, or by importing Clients.
Supplier balances	The Opening Balance field in the supplier’s profile, or by importing Suppliers.
Inventory quantities	A manual add requisition for the warehouse.
Treasuries, banks, capital, loans, and all other accounts	A Journal Entry dated on the start date.

Step 3: Add Clients and Suppliers

Add a Client

1. From the main menu, click Clients > Manage Clients.
2. Click Add New Client, or open Add New Client.
3. Enter the Business Name and contact details, and the Opening Balance if there is one.
4. Click Save.

Add a Supplier

1. From the main menu, click Purchases > Manage Suppliers.
2. Click the Add button, or open Add Supplier.
3. Enter the supplier’s details and the Opening Balance if there is one, then click Save.

Step 4: Record Journal Entries

Automatic Entries

The system creates an entry automatically when you save any financial transaction, such as Sales and Purchase Invoices, payments, Expenses, revenues, and Inventory movements. These entries appear in Journal Entries with the Automatic label. To change one, edit the original transaction.

Manual Entries

1. From the main menu, click Accounting > Journal Entries.
2. Click Add Entry, or open Add Entry.
3. Enter the date and description, then the debit and credit accounts and their amounts. The total debit must equal the total credit.
4. Click Save.

To transfer entries from another system, use Import from the Journal Entries menu with an Excel or CSV file.

Step 5: Posting to the General Ledger

There is no separate posting step in the system. Every entry you save, whether automatic or manual, is posted immediately to its accounts and appears right away in:

• The balances in the Chart of Accounts.
• The General Ledger report.
• The Trial Balance, Income Statement, and Balance Sheet.

Step 6: Daily and Monthly Reports

From the main menu, click Reports, then go to Journals Reports or Accounting Reports. Set the period using the date filter: a single day for the daily report, or the start and end of the month for the monthly report.

Report	What It Shows
Journal Entry Transactions	All entries in the selected period, with their details.
General Ledger	The transactions and balance of each account, which is the general ledger. You can open any entry from its number.
Trial Balance Report	The trial balance by totals.
Balances Trial Balance Report	The trial balance by balances.
Totals and Balances Trial Balance Report	The trial balance by both totals and balances.

Step 7: Financial Statements

Statement	What It Shows	Link
Income Statement	Revenues, Expenses, and net profit or loss for the period.	Income Statement
Balance Sheet	Assets, liabilities, and equity as of a specific date.	Balance Sheet

The statements are built directly from the balances in the Chart of Accounts, so the effect of any saved entry appears in them immediately.

Step 8: Close the Financial Period

At the end of the year or period, close it from Financial Periods. The system creates the closing entries, carries forward the net profit or loss, and prevents you from adding or editing transactions dated within the closed period.

Frequently Asked Questions

How do I use the software, from entering journal entries, Clients, and Suppliers to generating reports and financial statements?

Follow the steps in this guide in order: set up your Chart of Accounts, enter the opening balances, add your Clients and Suppliers, and then record your entries or transactions. The system posts every entry to the general ledger automatically, so you can review the results in Account Ledger, Trial Balance, Income Statement, and Balance Sheet.

Is there manual posting of entries to the general ledger?

No. Every entry you save is posted immediately to its accounts and appears right away in the Chart of Accounts, reports, and financial statements. Only entries saved as drafts are not posted until you issue them.

Where do I find the general ledger?

Go to Reports > Journals Reports > Account Ledger. It shows the transactions of each account and its balance for the period you specify.

Do I need a manual entry for every invoice or expense?

No. Invoices and Estimates and Expenses create their entries automatically. Use a manual entry for operations that have no screen in the system, such as opening balances for general accounts or adjustments.