Finance & Accounts

Double-entry accounting that posts itself from operations — trial balance, P&L and balance sheet always tie. Nothing is entered twice. Posting a GRN, an invoice or a payroll writes the journal entry, so the trial balance is a report rather than a monthly reconstruction.

The daily routine this module replaces

A terry-towel plant that keeps its books by hand or on spreadsheets follows a predictable rhythm:

• Morning: The accounts clerk collects yesterday’s gate-pass copies, GRN duplicates, invoice carbon sets and pay-slip stubs from the factory office. Each document is sorted into piles: purchases, sales, expenses, payroll.
• Mid-morning: The clerk opens the general ledger and the sub-ledgers (customers, suppliers, cash, bank). For every document, two or three lines are written by hand: date, voucher number, narration, debit amount, credit amount. If the same party appears twice, the clerk must remember to update the running balance in the sub-ledger.
• Afternoon: The clerk reconciles the cashbook with the physical cash tin and the bank statement with the pass-book. Differences are noted on a scrap pad; if the gap is large, the production manager is asked to explain missing gate passes or unrecorded expenses.
• Evening: The clerk totals each column in the ledger, carries forward the balances, and prepares a rough trial balance on a ruled sheet. If the two columns do not match, the day’s entries are re-checked line by line until the error is found.
• End of month: The clerk closes the ledgers, prepares a profit & loss statement and a balance sheet, and hands them to the owner. Any query—why is the yarn stock value different from last month?—means another half-day of digging through carbon copies and calculator tapes.

How a document moves through the module

Every document that changes money or stock is raised once, by the person who knows the facts, and then posted by the accounts team. The system writes the journal entry automatically, so nothing is typed twice.

• Goods Receipt Note (GRN):
  • Raised by the storekeeper when yarn or dyes arrive.
  • Posted by the accounts clerk after verifying the purchase order and the supplier’s invoice.
  • Effect in stock: the raw-material ledger increases by the quantity and value entered.
  • Effect in the ledger: the purchase account is debited, the supplier’s sub-ledger is credited, and the stock account is debited.
• Sales Invoice:
  • Raised by the sales clerk when a lorry leaves with finished towels.
  • Posted by the accounts clerk after the gate pass is matched.
  • Effect in stock: the finished-goods ledger decreases by the quantity and value invoiced.
  • Effect in the ledger: the customer’s sub-ledger is debited, the sales account is credited, and the stock account is credited.
• Payroll:
  • Raised by the HR clerk after the attendance register is closed.
  • Posted by the accounts clerk on pay-day.
  • Effect in the ledger: the wages account is debited, the provident-fund payable account is credited, and the bank account is credited for the net amount.
• Journal Voucher:
  • Raised by the accounts clerk for non-document transactions: depreciation, interest, or corrections.
  • Posted by the same clerk after the owner or production manager approves the narration.
  • Effect in the ledger: the specified accounts are debited and credited; no stock movement occurs.

The reports it produces and the decision each one supports

Report	Frequency	Who uses it	Decision it supports
Trial Balance	Daily	Accounts clerk	Verify that debits equal credits before closing the day.
Customer Ledger	Weekly	Sales manager	Decide which customers to chase for payment and which to stop supplying.
Vendor Ledger	Weekly	Purchase manager	Plan payments to avoid late fees and maintain credit terms.
Receivables Ageing	Monthly	Owner	Set credit limits and provision for doubtful debts.
Payables Ageing	Monthly	Owner	Negotiate extended terms with key suppliers.
Profit & Loss	Monthly	Owner, production manager	Compare actual margins against budget and adjust production mix.
Balance Sheet	Monthly	Owner, bank manager	Assess liquidity and decide whether to seek short-term finance.

What usually goes wrong when a plant runs without it

• Double entries, missing entries: The same invoice is posted twice, or a gate pass is never recorded. The trial balance balances, but the stock value is wrong and the owner cannot trust the profit figure.
• Sub-ledger drift: The customer ledger shows a balance of £5,00,000, but the general ledger control account shows £4,50,000. The difference sits in a suspense account that grows every month.
• Month-end panic: The clerk spends three days reconstructing the trial balance. By the time the P&L is ready, the owner has already made decisions based on last month’s numbers.
• Cash shortages: The cashbook says £2,00,000 is in the tin, but the physical count shows £1,20,000. The missing £80,000 is discovered only when the petty-cash vouchers are re-checked weeks later.
• Supplier disputes: A supplier claims an invoice is unpaid; the clerk cannot find the carbon copy. The owner either pays twice or damages the relationship.
• Tax surprises: Input tax credit is claimed on invoices that were never posted to the purchase account. The auditor disallows the credit, and the plant pays a penalty.
• No early warning: A customer who owes £10,00,000 has not paid for 120 days. The ageing report is two months out of date, so the debt is written off as bad.

What the software cannot fix

The module will not reconcile a bank statement if the clerk never enters the bank charges or interest. It will not correct a stock value if the storekeeper does not count the physical inventory. If the owner insists on back-dating invoices to meet a sales target, the software will post them, but the ledger will still be false. The discipline of raising documents on the day they occur remains the owner’s responsibility.

[{"question":"Can the module handle multiple factories?","answer":"Yes. Each factory is set up as a separate cost centre. The trial balance, P&L and balance sheet can be run for any single factory or for the group as a whole."},{"question":"Does it integrate with our bank\u2019s online portal?","answer":"The module exports bank-reconciliation files in standard formats (CSV, MT940). You upload these to your bank\u2019s portal; the system does not connect directly to the bank."},{"question":"How do we handle foreign-currency suppliers?","answer":"When you raise a purchase order or GRN, you enter the foreign-currency amount and the exchange rate. The system posts the base-currency equivalent to the ledger and keeps a separate record of the foreign-currency liability."},{"question":"What happens if the power fails while we are posting?","answer":"The system saves every document before it posts the journal entry. If the power fails, the document remains in the queue and can be re-posted when power returns. No partial entries are written."}]