Concept of Journals

What Are Journals?

Journals are entry points for recording financial transactions that do not originate from a sales or purchase document. They allow accountants and finance users to post directly to G/L accounts, apply payments, adjust inventory, record fixed asset activity, and more. Every journal in Business Central follows the same fundamental structure lines with Account Type, Account No., Amount, and Posting Date but each journal type is designed for a specific purpose.

Journal Templates and Batches

Every Journal in Business Central is organized into Two Levels:

Journal Template

A Template defines the type of journal and its behavior which Number Series to use, whether it requires balancing entries, and what source code to stamp on posted entries. Templates are created once and rarely changed.

There are many templates:

Let’s take General Journal Template for example.

Journal Batch

A Batch is a working copy of the template. Multiple batches can exist under one template, allowing different users or departments to work independently without interfering with each other. Each batch has its own set of lines.

Example

The General Journal template might have batches named DEFAULT, PAYROLL, ACCRUALS each used by a different team.

There are 4 Booleans that are available by-default.

1-    Copy VAT Setup to Journals Lines : When enabled, VAT posting groups (Bus./Prod. Posting Group) are automatically copied to the journal line as soon as you select the G/L Account or Balancing Account, no manual entry needed.

2-    Allow VAT Difference : When enabled, users can manually override the system calculated VAT Amount on a Journal Line (Within a Set Tolerance) useful for Rounding Differences or Matching a Vendor’s Invoice Exactly.

3-    Suggest Balancing Amount : When enabled for lines sharing the same Document No., the system automatically pre-fills the Amount on the next line with the value needed to balance the document.

4-    Copy to Posted Journals Lines : When enabled, the journal lines are also copied into the “Posted General Journal Line” table after posting kept as a historical/audit record separate from the actual ledger entries.

Types of Journals

There are multiple Journals that exist in Business Central.

General Journal

Search > General Journals

The most flexible journal in Business Central. Used for:

·      Manual G/L Entries

·      Accruals and Prepayments

·      Intercompany Transactions

·      Opening Balance Entries

·      Corrections and Adjustments

Supports Account Types – G/L Account, Customer, Vendor, Bank Account, Fixed Asset, IC Partner.

Cash Receipt Journal

Search > Cash Receipt Journals

Used to Record Payments Received from Customers. Typically used to:

·      Apply Customer Payments to Open Invoices

·      Record Partial Payments

·      Handle Overpayments and Refunds

When posted, it creates a Customer Ledger Entry and applies it to the outstanding invoice, closing it if fully paid.

Payment Journal

Search > Payment Journals

Used to record payments made to vendors. Used to:

·      Pay Outstanding Vendor Invoices

·      Generate Electronic Payment Files for the Bank

·      Record Partial Vendor Payments

The Suggest Vendor Payments function Automatically Populates the Journal with all Outstanding Vendor Invoices that are due, saving manual entry.

Purchase Journal

Search > Purchase Journals

Used to post purchase invoices and credit memos directly without creating a Purchase Order or Purchase Invoice document. Commonly used for:

·      High-volume invoice entry when full purchase documents are not needed

·      Importing vendor invoices in bulk

Sales Journal

Search > Sales Journals

Used to post sales invoices and credit memos directly without creating a Sales Order or Sales Invoice document. Useful for:

·      Simple Recurring Sales Invoices

·      Bulk Invoice Entry

Item Journal

Search > Item Journals

Used to Adjust Inventory Quantities and Values outside of purchase or sales transactions. Common uses:

·      Opening stock entry

·      Positive and negative adjustments

·      Physical inventory adjustments after a count

·      Item reclassification (transfer between locations or lots)

Journal Entry Types: Positive Adjmt., Negative Adjmt., Transfer, Purchase, Sale, Output, Consumption.

Fixed Asset G/L Journal

Search > Fixed Asset Journals

Used to Post Fixed Asset Transactions that are not covered by Purchase Invoices.

Common uses:

·      Opening Balance Entry for Existing Assets

·      Manual Depreciation Posting

·      Write-up or Write-down of Asset Value

Recurring General Journal

Search > Recurring General Journals

Used for Transactions that Repeat on a Schedule Monthly Rent, Insurance Premiums, Depreciation Allocation. The journal lines are not deleted after posting rather than they recur based on the schedule defined.

Item Revaluation Journal

Search > Item Revaluation Journal

Used to Revalue Inventory Items specifically to update the cost of items currently in stock after a cost change has been implemented.

Capacity Journal

Search > Capacity Journals

Used in Manufacturing to Post Capacity Costs (Labor and Machine Time) to Production Orders when Output is not being Posted Simultaneously.