IT4GH Accounts - Posting help

The purpose of IT4GH Accounts is to keep a record of financial transactions and use this information to produce useful reports.


Initial setup

When you first open your accounts page you will already have information for countries, some provinces (states), currencies, and account types. You will need to add more information before you can enter transactions. Here is a suggested order for filling in information:

  1. Enter a business. You can have more than one in your client account, but note that each business has its own separate accounts. For example, you will need a bank account for each business.
  2. Enter at least one department for each business. You will need a 'Main' or catch all department at least. All accounts belong to one department or another. They are cost or profit and loss centres. If your one business has two branches and you wish to report on each branch individually then this is the function of departments.
  3. Enter your chart of accounts. Each account will belong to a department and through that to a business. It will also have an account type, and be denominated in one currency. Here is an example chart of accounts:
    NameDepartmentAccount TypeCurrency
    Cash - USDMainAssetsUSD
    Cash - CADMainAssetsCAD
    Bank - CADMainAssetsCAD
    Bank - USDMainAssetsUSD
    Capital - USDMainEquityUSD
    Capital - CADMainEquityCAD
    Professional IncomeProfessionalIncomeCAD
    Professional ExpensesProfessionalExpensesCAD
    GST collectedProfessionalAccounts PayableCAD
    GST PaidProfessionalAccounts ReceivableCAD
  4. Enter the transaction taxes that apply in your jurisdiction. These taxes are a percentage of the value of the item. In the Canadian context this means GST (federal tax) and PST (provincial or state taxes) or HST (one single harmonized tax) plus other percentage levies as required. The taxes you enter will be visible to all businesses that you create and may or may not apply to your customers and billing items. You can enter a name (e.g. 'GST') and a symbol (e.g. 'G') for each tax, and specify an account where the collected tax amounts will be listed for later reporting and processing. Note that you will need to have accounts receivable and payable related to each tax. For example, if you need to report VAT you will need an 'accounts receivable' account 'VAT Paid' and an 'accounts payable' account 'VAT Charged'.
  5. Enter the terms that you intend to use in your businesses. Examples are 'Cash only','Net 30 days, 2% / month'
  6. Enter customers. Customers are specific to the business selected in your client account. For automatic posting purposes you should indicate for each customer a default account to which income from business with that customer applies, and the account in which payments owed by that customer will be recorded. You will need a receivable and income account for each currency in which you do business. Thus if you do professional work for ABC Inc., then your income account might be 'Income-Professional' and the accounts receivable account might be 'Accounts Receivable - ABC Inc.' or 'Accounts Receivable - Other'. For each customer check the box for each of the taxes that the customer is subject to.
  7. Now enter the Items you will be selling. Examples will be 'Petunias in 6 inch pots' or 'Professional Services per hour'. For each item check the box for each of the taxes that the item is subject to.

Posting transactions

Transactions are the bread and butter of double entry bookkeeping. They consist of a main transaction record which records overall details of the transaction such as the date and currency and two or more splits records which record amounts and accounts. There have to be two or more splits since the total of the negative and positive entries has to be zero. The only exception to this is where the single entry has an amount of zero.

To enter a transaction click 'Transaction' under the main menu Transactions heading. This opens a special page which remembers which business and year you are working with. From this page you can add, review and edit your transactions. The top section adds new records, the middle sets the criteria for listing existing transactions and finally at the bottom comes the list of your existing entries. When adding and editing you have 4 fields to deal with:

  1. Date: you can only enter the month and day (such as '01-01' for January 1st) since the year is already defined. Dates are stored in ISO date format such as '2008-01-01 00:00:00' with the hyphen or dash as the month and day separator. If you enter a date that is invalid then the programme will still enter your record but on the current date. When the page refreshes it will show your new record in the detail area. If you need to enter transactions for another year click the back button to return to your main page, select a different year, then hit transactions button again.
  2. Comment: this comment refers to the transaction in general
  3. Currency: this is the currency for the transaction, and has an important effect in restricting which accounts you can post to and from in the splits records.
  4. Conversion: in the case that the transaction contract is written in a currency other than that in which it will be posted then you can record the currency exchange rate here. It has no effect on calculations. For example your business normally deals in Euros. You purchase a service from Australia in Australian dollars. However since this is an expense, it should be written into your books in Euros at the exchange rate on the date the deal closes. The contract shows AUD $100 but in your books it appears as €50, with a currency exchange rate of .5. You could equally as effectively record the details in a comment field at the transaction or split level according to need.

You may have two separate unbalanced transactions where one has a single negative entry and the other a single positive entry for the same amount. In this case your trial balance and balance sheet will still balance but such entries will make it more difficult to track down posting errors.

To check whether your entries balance or not you can at any time press the Maintenance->More->Diagnostics button. This checks that the overall tally is correct (i.e. that the total debits equal the total credits over all currencies), then does a similar check by individual currency, and then checks that each transaction balances. If any do not balance, it reports the date of the transaction and the amount of the discrepancy. These diagnostic checks are faster than opening the trial balance window.

Posting invoices

An indirect way of posting transactions is via an invoice.

Invoices are a means of telling your customers what you have done for them (or sold to them) and how much they owe you. One way to approach this is to start an invoice for a customer at the beginning of the month and then each day you perform some task or sell an item add the detail to the invoice. Then at the end of the period when all details are added you can print off the invoice and tell the programme to post the invoice details as transactions with the necessary detail (split) records.

Invoices which need to be amended shortly after they have been posted can be UN-posted, edited and then re-posted. However after some time has elapsed and particularly when reports have already been sent regarding taxes paid and collected it is better to post fresh correcting entries.

In order for automatic posting to work you will need to have the customer account set up with appropriate receivable and income accounts for the currency in which the billing is made, and have these set correctly in the customer profile.

Note that invoices are currency neutral. Customers are billed in the currency that is part of the customer record. If you enter a price for an item of '10.00' that will be interpreted as $10 or €10 or ¥10 depending on the customer being billed. This allows you to have a customer who pays you in pounds sterling even though your business is in th U.S. If you want the customer to pay in U.S. dollars then indicate both the currency and the locale in the customer record.

Group invoices

Each customer can be a member of one or more groups. This way, a number of customers can be sent the same invoice at the same time. You complete a group invoice in the same way as a single customer invoice. Then posting and printing the invoice will apply the same invoice to every member of the group, using information from the group invoice and the customer records.

This means you have to be careful about which customers belong to which groups. Say you have a group called 'Miami customers' and you have a number of customers in this group who are billed in US dollars and one who is billed in GBP. The group invoice has 100.00 for an amount, so for the customers who pay in US dollars this will translate to $100 US, and for the customer who pays in GBP this will mean their invoice is for £100.00, which may not be what you want.

Producing reports

You can show and print such reports as a balance sheet, income and expense statement, ledgers and trial balance for each business or account as required. When you simply 'view' the report on the screen it is formatted in accordance with the site style sheet. The print version has a basic minimal stylesheet allowing for simple printing purposes. You can of course at any time use your own stylesheet to give a different styling using your own private styling instructions.

Import OFX (Open Financial Exchange)

Some financial institutions allow you to download details of accounts in OFX format. IT4GH Accounts can import these files into your books. The process works by allowing you to upload your .ofx file which provides information such as the date, currency, text comment, amount and whether it is a debit or credit on your Main account. The .ofx file does not know the two accounts that you want to post to; you indicate these separately. It then processes the entire file using your Main and Offset accounts. The offset account may not be the correct account; you can edit this after the process is complete.

Note that the import is date neutral. As long as the year is within the normal range for IT4GH accounts and the date is valid the transaction will be posted. This could mean that if your OFX file covers two years, say 2008 and 2009 and you are currently set to 2008 year then the 2009 entries will not be visible until you set the year to 2009 in your main screen.


In the bank example, note that in the OFX file DEBITs (withdrawals and cheques) are marked as negative numbers and CREDITs (payments into the account) are marked as positive. However in your bank account in your books, a withdrawal from the bank will be a credit amount and a deposit into the account will be a debit amount. For this reason when the import takes place the signs on the amounts will be reversed. Keep this in mind for non-bank or credit account imports.

Possible reasons for failure:

Auditors - Users can allow auditors to review their accounts without danger of items being edited. From the main menu choose Auditors, add a new auditor record and assign a username and password. An auditor entry can only review one business. If necessary users can assign multiple auditor records to allow review of more than one business under the same client account. The user has full control over who is allowed to audit the accounts. Delete the auditor record, assign a different password, add multiple auditors as required. Auditors cannot use their usernames and passwords to sign in as users. The login screen requires that auditors sign in using the Auditor section.

Copyright Colin Beckingham IT4GH © 2008-2011 All Rights Reserved