Accounting can be automated using default accounts in Procountor. This article covers information about the roles of default accounts in automating the accounting, and different kinds of functions regarding the default accounts.
Procountor default accounts
- If the expense on an entered purchase invoice is one of the following, its accounting will be completed automatically:
- Management costs of book-entry securities, data transfer costs, property insurance, membership fees, books, meeting and negotiation costs, magazines, forms and printing costs, damages paid, mobile telephone expenses, other data collection, other administration expenses, other insurances, mail and courier costs, telephone costs, rounding differences, cash flow expenses, telefax expenses, data services, office supplies, photocopies or liability insurance.
- All expenses belonging to these categories are entered on account 8450 Other administration expenses.
- Travel invoices are automatically entered on the travel costs account, expense invoices on the other administration expenses account, sales invoices as sales profit, and expenses recorded on bank statements according to the entry description (e.g. bank fees on account 8450 Other administration expenses).
- Default postings can be modified in Management > Accounting info > Posting defaults.
Partner-specific default accounts
- In Procountor, arriving invoice’s accounting postings are possible to define with business partner specific default postings.
- Business partner posting defaults can be set in Registers > Business partners > Open one business partner information > Defaults > Default accounts.
- When a default accounting account is set for a business partner, Procountor selects the account automatically on the Accounting view of the invoice.
- It is recommended to determine the basis for each partnership and whether the partnership is continuous or a one-time transaction. This helps to outline the business partners to whom it is worth to define defaults in order to ease the accounting.
- The business partner report can be utilized to generate a list of companies entered in the business partner register. The list can be reviewed and used as a help when determining the partnerships.
- Default postings should not be entered for one-time business partners in the business partner register, since the account is easy to change on the accounting page (in this example, B Trademarks, from which there has been a one-time purchase).
- If the invoice’s default posting will automatically enter it on the correct account, you should not add accounts to the business partner register (in this example, the suppliers for catering, trade magazines, goods transport and printing).
|
Supplier |
City |
Partnership basis |
Default posting |
|
Central Motor-Vehicle Register |
00101 Helsinki |
Vehicle taxes |
7500 Vehicle costs |
|
A Restaurants Ltd |
00421 Helsinki |
Catering |
Default posting for purchase invoice |
|
A Travel Agency Ltd |
00250 Helsinki |
Business trips |
7800 Travelling expenses |
|
Artemis Finland Ltd |
02210 Espoo |
Programming |
8300 Research and development |
|
Car Service K Ltd |
|
Transport |
7800 Travelling expenses |
|
B Trademarks |
|
One-time purchase |
No default account |
|
Car Ltd |
02200 Espoo |
Car maintenance |
7500 Vehicle costs |
|
B2B Media Ltd |
00381 Helsinki |
Trade magazines |
Default posting for purchase invoice |
|
Cargo Exp Ltd |
00621 Helsinki |
Goods transport |
Default posting for purchase invoice |
|
D-tus Ltd |
02770 Espoo |
Telephone marketing |
8050 Marketing expenses |
|
E Print Ltd |
00580 Helsinki |
Printing |
Default posting for purchase invoice |
|
El Electronic T Ltd |
02210 Espoo |
Data transfer |
7640 Computer and software costs |
|
Pension insurance V |
24100 Turku |
Insurance provided for by the Employees’ Pension Act (TyEL) |
2950 Accruals and deferred income |
|
Global Teleworking |
29590 Campanillas (Malaga) |
Programming |
8300 Research and development |
|
H Financing Plc |
|
Car leasing |
7500 Vehicle costs |
- Note! The default account for the TyEL insurance company has been specified as Accruals and deferred income, since the payroll calculation system enters the TyEL liability incurred from each salary. TyEL insurance payments are thus entered as decreases in TyEL liability. The difference between the entries indicates the amount of accrued income or expenses remaining of the TyEL insurance.
Product-specific default accounts
- It is possible to set product-specific default postings. After setting the defaults, the products are automatically posted to default accounts.
- Product-specific default accounts can be set for sale and purchase products in the product register.
- Default accounts for products used on travel and expense invoices can be specified on the Default postings for travel/expense invoices The Default postings for travel/expense invoices view can be accessed by choosing Management > Accounting info > Default postings > Default postings for travel/expense invoices.
- When accounting is performed by row, the account specified for the product will be primarily used for posting on the invoice’s account page. If no default account has been specified for the product, the business partner’s default account will be used. If this has not been specified either, Procountor will use the default account saved in General account posting defaults view (Management > Accounting info > Posting defaults > General account posting defaults).
Correcting default postings
- Purchase invoices will be entered on account 8450 Other administration expenses, unless a different default account has been specified for the product or supplier.
- Default postings are easy to change by opening a detailed general ledger of the transactions on account 8450 alone. The invoices that require a different general ledger account can be opened by clicking on the Accounting.
Simplifying accounting by using the default accounts
- Sales invoices are entered on the default sales account in Procountor, since the distribution of sales by customer, customer group, product and product group can be monitored using product reports, for example. Sales can be tracked by dimension (e.g. by project or profit) on accounting reports.
- Purchase invoices can be entered by row if necessary. This makes it possible to determine the purchase amounts and costs of key products. The products used on purchase invoices should not be excessively detailed, i.e. use Envelopes, not Envelopes C5, Envelopes C6, etc. Less important purchase invoice items are only worth tracking by supplier and general ledger account, which significantly reduces the amount of accounting work caused by paper purchase invoices.
- Statistics on travel and expense invoices are automatically compiled by row. General travel cost items can be used on the rows, which enables the monitoring of costs such as kilometer allowances by employee (volumes and amounts).
- The automatic posting of bank statements and reference payments make accounting automatic if customers pay their invoices correctly and use the reference numbers.
Bank statements and reference payments
The automatic posting of entry explanations on bank statements can be verified further for each company as follows:
|
Entry explanation |
Deposits/withdrawals |
Procountor default |
Specification possibilities |
|
700 = Payment transaction service |
Deposits/withdrawals |
2880 Payment transaction account / 2880 Payment transaction account |
In Danske Bank, non-reference payments on invoices can be changed to account 1700 Accounts receivable |
|
701 = Periodical transaction service |
Deposits/withdrawals |
1990 Payments in transit and balancing difference / 2880 Payment transaction account |
Deposits (e.g. “milk account payments”) can be entered on account 1700 Accounts receivable. |
|
702 = Invoice payment service |
Withdrawals |
2880 Payment transaction account |
|
|
703 = Payment terminal service |
Deposits |
2880 Payment transaction account |
Payment terminal payments can be entered on account 1990 Payments in transit |
|
704 = Direct debit service |
Deposits/withdrawals |
1990 Payments in transit and balancing difference / 2880 Payment transaction account |
For the time being, the direct-debiting of sales invoices cannot be transferred to Procountor. If you use direct-debit withdrawals, you can change the account to 2880 Payment transaction account, against which purchase invoices will automatically be entered. |
|
705 = Incoming reference payments |
Deposits |
1990 Payments in transit and balancing difference |
|
|
706 = Payment service |
Withdrawals |
2880 Payment transaction account |
|
|
710 = Deposit |
Deposits |
1990 Payments in transit and balancing difference |
Non-reference payments can be entered directly on account 1700 Accounts receivable |
|
720 = Withdrawal |
Withdrawals |
2880 Payment transaction account |
If the withdrawals are made by the entrepreneur for personal use, you can change the default account to 2340 Private accounts. Withdrawals made by a partner can be entered on default account 1760 Other receivables. |
|
721 = Card payment |
Withdrawals |
2880 Payment transaction account |
If the entrepreneur/employee has a company debit card, you can change the account to 1760 Other receivables. Expense receipts are entered as decreases to the receivable. Any difference (= personal purchases) is paid periodically to the company account. |
|
722 = Cheque |
Withdrawals |
2880 Payment transaction account |
|
|
723 = Taxi-bus note |
Withdrawals |
7800 Travelling expenses |
|
|
730 = Bank fee |
Withdrawals |
8450 Other administration expenses |
|
|
740 = Interest charge |
Withdrawals |
9440 Interest costs, other |
|
|
750 = Interest reimbursement |
Deposits |
9160 Other interest income |
|
|
760 = Loan (including instalments, interest and fees) |
Withdrawals |
2880 Payment transaction account |
You can perform the division on the bank statement or by entering the charge notification/invoice sent by the bank on accounts 2820 Loans (instalments), 9440 Interest costs and 8450 (Fee) as a purchase invoice. |
|
761 = Loan instalment |
Withdrawals |
2820 Loans from credit institutions |
|
|
770 = Foreign payment |
Deposits/withdrawals |
1990 Payments in transit and balancing difference / 2880 Payment transaction account |
|
- The posting of entry descriptions can be changed in the Default postings for reference payments view (Management > Accounting info > Posting defaults > Default postings for reference payments).
Specifications to the default accounts of existing users
- During production use, the default accounts used by Procountor have been changed somewhat. If you feel that the automation of default accounts is not generating a sufficient amount of finished accounting for your company, you should review the default accounts, and, if necessary, change them to better suit the needs of your company. Any changes will apply from the moment they are made. Changes will not apply retrospectively to the already existing invoices. Changes must be made to the accounting pages of previously entered transactions where necessary.
- There are differences between bank statements. For example, Nordea enters non-reference payments of sales invoices using entry explanation 710, but Danske Bank uses explanation 700. If the majority of deposits made on an account consists of non-reference payments made by customers, you should change the default accounts of the entry explanations on these bank statements to 1700 Accounts receivable on the Bank statement posting defaults view (Management > Accounting info > Posting defaults > Bank statement posting defaults).
To be noticed
- The majority of purchase invoices are entered under Other operating costs on the income statement. For this reason, it makes no difference whether small purchase invoices, that are not stock purchases or pension insurance payments, are entered on precisely the correct accounts or on Procountor’s default accounts. A sufficient level of accuracy is achieved by only adjusting postings on general ledger account 8450 for transactions with a value over EUR 100.
- Even though the Accounting Act allows for correcting accounting entries during the fiscal year, it is usually simplest to finish postings immediately. If your company does its own accounting, adherence to this principle will minimize the work load.
- You will gradually become familiar with the accounting account numbers by keeping the separate account list window open and checking account numbers from it. You can create this window under Management > Accounting info > Chart of accounts. On the Chart of accounts view, it is possible to choose to open the window in HTML or Excel form. The account list window can also be printed out.
- Business partner report can be executed to list the default accounts of business partners. In addition to the company name, the report also includes each partner’s default posting.
- Changing posting entries retroactively will not affect VAT processing.
- If the entrepreneur pays purchase invoices using Procountor with an accounting firm taking care of accounting, the firm should create default postings that automate the process to the greatest possible extent. The accounting firm can then periodically verify the accuracy of postings by following the instructions for Correcting default postings, for example.