Overview of Entry Types
· General Ledger
The general ledger contains a set of accounts to record the financial activities of a company.
Accounts classify the financial activities of your company. This classification is useful for reporting and administration purposes. You can create main and sub accounts to obtain reports at a summary or detailed level.
Each account contains balances. Pastel stores the balances for two financial years.
The accounts accumulate balances from transactions. A transaction is a specific financial event such as a single purchase from a supplier, a sale or processing of a credit note. For each transaction, you enter information that we analyse into the following types:
Indicates which account to update, in which period, and by what amount.
For each account you need details to substantiate the source or destination of the amount. These include a date, reference number, cost code, and a description. As with balances, Pastel stores transactions for two financial years.
Thus, at any point within the two years, you can see a complete breakdown of each balance.
Within a given period, a company could process thousands of transactions. It is prudent accounting practice to analyse and classify these transactions.
This is what entry types do – they classify and analyse transactions. You classify entry types based on the nature, type or source of the transaction, such as cash books, general journals, sales, sales returns, purchases and so on.
Pastel lets you create entry types for many types of operations.
Therefore, even within each originating source, you can further classify the transaction. For example, instead of processing all your sales, invoices and credit notes using one entry type, you can create a separate entry type for each of these operations.
Generally, the more entry types you use, the more detailed and meaningful the transaction analysis and classification should be. You would be able to produce various reports showing balances or movements per entry type.