Journal entries and expenses/costing invoices

Request for general support related to Logic Invoice.
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metrics
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Journal entries and expenses/costing invoices

Post by metrics » Sat Jul 16, 2016 4:18 pm

discussion about entries and costing continued from here http://forum.logicinvoice.com/viewtopic.php?f=4&t=453
Esmond wrote:If we have a look at Xero, they require invoices / credit notes etc to be added. This means that you will not be able to add journal entries independently.
Well this is not a bad idea in itself. As you would know accounting must to be precise and flexibility gives room to creativity and possible errors.
Esmond wrote: Our workflow here is different, gives a little more flexibility to the companies, adding journal entries independent of invoices is possible as well.
We can have an additional reference ID field added, and the system validates to ensure that the reference ID is not used to prevent double entry. That will be the easiest way to prevent double entry.
At the moment I think you need to allow that flexibility with LI. Xero handles expenses differently where a "negative" invoice is created and is posted against a supplier which should be different to customers. I think that xero allow to create indipendent journal entries I am not sure if you can leave them dissociated from an invoice and just hanging in there. I think that somehow journal entries should be always associated to something, invoice, credit, cost etc. This is something to discuss about it for future development after you have a solid base
Esmond wrote: As for searching right now, I guess we need to look into that further.
Well, if you have a unique field that would be your search field however, if you have all journal linked to an invoice/expense than you don't really need to search journal entries.

The discussion is open...

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Esmond
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Re: Journal entries and expenses/costing invoices

Post by Esmond » Sat Jul 16, 2016 10:34 pm

So there's two ways we can proceed with it:

1. Internal reference field or
2. Have additional credit pages etc to link it to journal entries

At the moment, we're thinking of ways to automate invoices to journal entries as well. if you have a good suggestion, we would love to hear more about it. How should we have the journal entries be automatically added when there's a new invoice?

metrics
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Re: Journal entries and expenses/costing invoices

Post by metrics » Sun Jul 17, 2016 10:10 am

Hi Esmond,
I think your approach of automating the journal entries is the way to go.
Esmond wrote:How should we have the journal entries be automatically added when there's a new invoice?
Sure, I can share how we posted invoices in my previous jobs and the workflow we followed. Different systems same way of doing it in my experience. After all I think this is not about reinventing the wheel :)

I understand there are generally 3+1 types of invoices

Customer Invoice -> this is positive and is usually made by you to a customers
creditor invoice -> this is usually negative and is made by a creditor to you.
credit and debit notes -> these are usually used to annul either the invoice or the creditor invoice. (in accounting you should not delete invoices but annul them with credit/debit notes)

Invoices (income) are posted against customers while creditor invoices (expenses) are posted against suppliers so these have to be separated in the system. An easy and quick way is to add 2 checkbox when entering a customer and ask is this a customer? is this a supplier?

With regards to the UI,
basically the invoice lines are the journal entries that are to be created automatically. Next to Tax class you need another field to enter the code for the journal entry. Obviously when posting an invoice you have to break it up line by line.

In addition to the above:
- when posting an invoice the only code available would be those related to revenue/income and vice-versa when posting an expense you only need to "codes" that relate to cost
- credit and debit notes should be linked to an invoice or creditor invoice
- it's good to have an Internal reference field on the invoice level, you can enter there:
1.the creditor invoice number for easy search.
2. OC orders or invoice nr for normal invoices etc


Is something similar to this that you had in mind?

Finally, I would like to stress the importance of using transaction because I already experienced another app that does not use transaction and from time to time the data is not entered in all tables as it should. It's annoying because it gives a success message does not take into account if all query have been executed successfully.
Here is an example of using POD commit/transaction mechanism https://www.html5andbeyond.com/using-da ... e-example/

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Re: Journal entries and expenses/costing invoices

Post by Esmond » Sun Jul 17, 2016 11:58 am

We were thinking of adding the account code to each line item on the invoice, but was thinking if there's a better way or more efficient way. However, it seems like there's no other way to do it I assume?

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Re: Journal entries and expenses/costing invoices

Post by metrics » Sun Jul 17, 2016 8:41 pm

Esmond wrote:We were thinking of adding the account code to each line item on the invoice, but was thinking if there's a better way or more efficient way. However, it seems like there's no other way to do it I assume?
If you want to make it more efficient, I think the workflow to create an invoice can be improved.
- one page invoice
- prefill all fields that can be pre-filled ie, customers details, creation date, due date everything that can be prefilled should be so to make it more efficient.

going back to accounting and journal entries, adding the account code to each line item on the invoice solves only a minimal part of the problem. You need to introduce the 4 type of invoices and make a distinction between customers and suppliers/creditors. In the invoice screen you can add at the top the drop down list to select, Creditor invoice, customer invoice or credit/debit note.
This way you can control account codes to be used and also automatically create the correct "cash" journal entry.

Does it make sense?

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Re: Journal entries and expenses/costing invoices

Post by Esmond » Tue Jul 19, 2016 11:53 am

Will need to look into this and see how we can implement it into the system. Right now, we will be working on fixes and minor improvements for the next release, before we start looking into improvements on the accounting area.

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Re: Journal entries and expenses/costing invoices

Post by metrics » Tue Jul 19, 2016 10:47 pm

I agree with you that the changes I suggested are a major upgrade and some proper thinking on how to implement them is needed.

if you think that is a good feature to have sooner rather than later let's continue this conversation after your next release.
There are probably many things that can be discussed and planned before starting to code.

Nevertheless I think it will be a BIG step forward in terms of workflow efficiency and if is done properly you don' t need to change it again.

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Re: Journal entries and expenses/costing invoices

Post by Esmond » Wed Jul 20, 2016 7:57 am

We will push out a new release before we start working on the suggestions you have given. Those are good suggestions which I believe will help in bringing this software a step forward to making lives easier.

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