Introduction to Transactions (Journal Entries) in Books by HansaWorld

You should record every accounting event as a separate Transaction in the Transaction register. Depending on the nature of an individual Transaction, you can enter it directly to the Transaction register yourself, or it can be created remotely from the Receivables and Payables modules.

You can decide which Transactions are to be entered directly to the Transaction register and which are to be created remotely from other Ledgers (or "Sub Systems"). You should do this in the Sub Systems setting described here.

Typically, Transactions representing Sales and Purchase Invoices, Receipts and Payments will be generated remotely from the Receivables and Payables modules. You will enter other types of transactions directly to the Transaction register: these might include bank transfers, overhead costs, salaries etc.

Before working with Transactions, you should also look at the following settings and registers:

To open the Transaction register, ensure you are in the General Ledger, then click the [Transactions] button in the Master Control panel. The 'Transactions: Browse' window is opened, showing a list of Transactions already entered.

Transactions that have been entered directly to the Transaction register are shown with their Transaction Numbers preceded by the fiscal year: the Transactions numbered 2010.1 to 2010.3 in the illustration are examples of this. The characters representing the fiscal year are taken from the Fiscal Years setting in the System module. Transactions that have been created from a Sub System are shown with their Transaction Numbers preceded by a code representing their Sub System. In their case, the Transaction Numbers themselves are determined in the Sub System in which they were created. For example, Transactions generated from Sales Invoices have a Transaction Number that is the same as their Invoice Number, and are shown in the browse window with a prefix of S/INV.

In the Text column you can see the short explanatory text that was entered for each Transaction. For those Transactions created from Sub Systems, the Text column usually shows details of the Customer or Vendor involved.

As in all browse windows you can change the sort order by clicking on the column headings. To reverse any sort, simply click once again on the column heading. The current sort column is shown with its heading colored blue. You can scroll the list using the scroll bars or the trackpad. Finally, you can search for a record by entering a keyword in the field at the top right-hand corner. When you press the Return or Enter key, the first record with a match for the keyword in the current sort column will be highlighted. If you need to search for a particular Transaction Number, include the prefix in your keyword e.g. search for "2010.3" not "3" or for "S/INV.209008" not "209008". If you are using Mac OS X, you can also change the order of the columns by dragging the column headings, and remove columns altogether using the check boxes in the drawer.

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Entering a Transaction

To enter a Transaction, first open the Transaction register by ensuring you are in the General Ledger and then clicking the [Transactions] button in the Master Control panel.

Then, click [New] in the Button Bar or use the ⌘-N (Mac OS X) or Ctrl-N (Windows) keyboard shortcut. Alternatively, select a Transaction similar to the one you want to enter and click [Duplicate] on the Button Bar.

The 'Transaction: New' window is opened, empty if you clicked [New] or containing a duplicate of the highlighted Transaction.

Complete the Transaction record as described on the pages listed below, then save it using the [Save] button and close the window by clicking the close box.

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Entering a Transaction - Header

No.
Paste Special    Select from another Number Series
The Transaction Number of a new Transaction is provided automatically by Books by HansaWorld. The default is the first unused number in the first valid number sequence in the Number Series - Transactions setting. You may change this number, but not to one that has already been used.

If you have not defined any number sequences in the Number Series - Transactions setting, the Transaction Number sequence will start at 1 and continue consecutively. If you want the sequence to start from another number, change the Transaction Number of a Transaction before saving it. Books by HansaWorld will then continue the sequence from there.

If you are using the Warn on non-sequenced Transaction Number option in the Transaction Settings setting, you will be given a warning if you enter a new Transaction whose Transaction Number is lower than the previous Transaction Number used. You will still be able to save the Transaction (assuming the new Transaction Number has not already been used, and assuming it is in a valid Number Series).

If you are working in a multi-user environment, the Transaction Number will be assigned when you first save the Transaction.

Trans. Date
Paste Special    Choose date
The date when the Transaction took place. The last used Transaction Date is offered as a default.

Text
A short description of the Transaction.
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Entering a Transaction - Footer

Difference
Any difference between the sums of Debited and Credited amounts is shown here: the two sums must be the same before you can save the Transaction. A balancing entry shows a zero difference in this field.

Total
These two fields show the sums of Debits and Credits for the Transaction.
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Entering a Transaction - Transaction Rows (Journal Postings)

The majority of the Transaction record window contains the rows of the Transaction, where you should list the postings to the individual Accounts. These must balance (the debits must equal the credits) before you can save the Transaction.

To add rows to a Transaction, click in any field in the first blank row and enter appropriate text. To remove a row, click on the row number on the left of the row and press the Backspace key. To insert a row, click on the row number where the insertion is to be made and press Return.

Account
Paste Special    Account register, General Ledger/System module
Specify here the Account used by the Transaction row.

You can also enter an Autotransaction Code in this field. You can use Autotransactions to automate the entry of frequently used Transactions, not only reducing labor but also ensuring the correct Accounts are used every time. Autotransactions are fully described here.

Description
The Account Name will be entered here automatically when you specify the Account above. You can change it in a particular Transaction row if necessary.

Base 1 Debit, Base 2 Credit
For each row, enter a debit or credit amount. The debits total must equal the credits total before you can save the Transaction: each Transaction must therefore have at least two rows.

Tx-Cd
Paste Special    Tax Codes setting, General Ledger
Default taken from    Account
You can mark each row in a Transaction with a Tax Code. The Tax Code may be brought in automatically when you enter an Account number, or you can enter it yourself. No calculation ensues: the field is for reporting purposes only. Nevertheless, take care to ensure you enter the correct Tax Code (if any), since it will affect the accuracy of the figures for Net Sales and Net Purchases in the Tax Report.
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Entering a Transaction - Example

There are several shortcuts that you can use to simplify your work when entering Transactions. You can bring a date into a date field using the ⌘-Enter (Mac OS X) or Ctrl-Enter (Windows) key combination. If you will be entering Transactions of the same type repeatedly (e.g. salaries), you can automate their entry using Autotransactions. Their use is fully described here.
  1. To enter a Transaction, ensure you are in the General Ledger and the open the Transactions register by clicking the [Transactions] button in the Master Control panel or using the ⌘-1/Ctrl-1 keyboard shortcut. Then, click [New] or press ⌘-N/Ctrl-N, or highlight a Transaction similar to the one you want to enter and click [Duplicate] in the Button Bar.

    The 'Transaction: New' window is opened, containing an empty Transaction or a duplicate of the highlighted one. The suggested Transaction Number will be the first unused number in the correct journal number series, and the Transaction Date will be the date from the most recently entered Transaction.

  2. Enter and edit the data in the normal way. We will show how to enter the various items with the help of a few examples.

    We assume that you have bought some office material from the local stationery store.

    You have purchased two boxes of copy paper for 12.50 each, a box of pencils for 6.00, and a box of adhesive tape for 3.20. The Tax was 1.07, and the total 35.27. You paid by check from the company's current account.

    The Transaction will look like this:

  3. Click [Save] to enter the Transaction in the General Ledger.

  4. The next Transaction records the purchasing of a new desk. Start by clicking [New]. The stationery Transaction is closed and replaced with an empty record ready for data entry.

    The desk cost 247.00 excluding Tax. You are charged 20.00 for transport, and then Sales Tax.

  5. Here you can try the automatic balancing function, since all crediting is done to the same Account. Enter the three debit postings and continue with row 4 until you are going to enter the amount. The Transaction will look like this:

  6. With the insertion point in the Base 1 Credit column, press the Return or Enter key. The correct credit amount to balance the entry will be brought in for you. If you press Return or Enter again, the Transaction will be saved, closed and committed the Transaction to the General Ledger, and a new, empty, Transaction will be opened. You can use this feature when you need to enter several Transactions quickly in one sitting.
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Correcting Transactions

In the program you can easily correct Transactions in a legal manner.

!

You may not alter an entry in your Ledger just any way you want to. A correction of a Transaction means that you create a new Transaction, which also cancels the old one. The altered Transaction should be marked that it has been cancelled.

When a Transaction is open for data entry, the Operations menu is available in the Button Bar, allowing you to make several types of corrections after the Transaction has been entered.

Assume that you have entered the wrong Tax amount, and that you find out only after entering the Transaction.

  1. Highlight the Transaction containing the error in the 'Transactions: Browse' window and click [Duplicate].

    This creates a copy of the faulty Transaction. First you want to remove the error.

  2. Select 'Swap Debit & Credit' from the Operations menu. This takes the existing Transaction rows and reverses them (what were Credit amounts become Debits). This action thus cancels out the original, erroneous, Transaction.

  3. Then select 'Correction Mark' from the same menu. This will add a new line where you can enter a cross reference to the Transaction containing the error. Note: do not save the Transaction before selecting 'Correction Mark'.

  4. Enter the journal number of the transaction to be corrected, including the fiscal year prefix, and then on the following rows make new, correct, entries as in the illustration above. Click [Save] when you have finished.

    The new Transaction will be saved, and the old Transaction will be marked as corrected, as shown in the following picture:

A second method that you can use to correct mistakes emulates that used in manual ledgers, where errors are often corrected or eliminated by striking a line (sometimes in red ink) across the entry. The accountant will sign the correction, and create a new, corrected entry with the next unused journal number.
  1. In the 'Transactions: Browse' window, find and double-click the old Transaction you want to change. Select 'Update Mark' from the Operations menu. A new line is added in the Transaction, containing your Signature and the original date of the Transaction.

  2. You will now want to cancel - draw a (red) line across - the faulty row. Highlight the row by clicking the number to the left of the row. Press the Backspace key to draw the correction line across the row. Then you can enter the correct information. Save in the normal way.

  3. If the error is in the header area of the Transaction (i.e. the Transaction Date is wrong), you can again use the 'Update Mark' function to correct it. Select the function and change the date as appropriate. There is no need to use the 'Update Mark' function to change the Text in the header or the Description in any of the rows.
If you discover an error in a Transaction that falls within a closed month, you cannot correct it using 'Update Mark'. This is because 'Update Mark' modifies the Transaction and attempts to save it using the original Transaction Date. This falls in a period when modifications are not permitted. Therefore, the only way you can correct such Transactions is by using the 'Correction Mark' function to create a new, correcting, Transaction whose Transaction Date must fall within an open month. To close a month, use the Locking setting in the System module.

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Operations Menu

When a Transaction is open in a record window, the Operations menu is available. The menu has five commands.

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Operations Menu - Balance Transaction

If the insertion point is in one of the Transaction rows, selecting this command changes the Debit or Credit value in that row, so that the Transaction balances. This is particularly practical when you have made an error in the amount in just one line.

An alternative to selecting this function is to place the insertion point in the Credit field of the last row and press the Return or Enter key.

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Operations Menu - Swap Debit & Credit

This command swaps the entries of a Transaction, transferring all Debit values to the Credit column and all Credit values to the Debit column.

This is useful when you wish to cancel a Transaction with an opposing correction Transaction. To do this, find the erroneous Transaction in the 'Transactions: Browse' window, highlight it and click [Duplicate]. A copy of the Transaction is opened. Select this function and save by clicking [Run]. The erroneous Transaction is now cancelled. Full details are contained on the Correcting Transactions page.

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Operations Menu - Update Mark

In the case of a Transaction that contains an error, use this command to insert a special update mark allowing you to record a signature before entering the correct posting on the Transaction. Full details are contained on the Correcting Transactions page.

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Operations Menu - Correction Mark

When you use a correction Transaction to correct a Transaction, use this command to enter the number of the cancelled Transaction. The cancelled Transaction will also gain a cross-reference to the correction Transaction. Full details are contained on the Correcting Transactions page.

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Operations Menu - Open Subsystem Record

If a Transaction was created automatically when you approved and saved a Sub System record (i.e. an Invoice or Purchase Invoice, Receipt or Payment), you can use this function to open that Sub System record in a new window.

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