¶ Accounting Module
¶ Overview
The Accounting module in Sherkety ERP is your complete financial management solution, from invoicing customers to reconciling bank statements. Whether you're a small business or a large enterprise, the accounting module provides the tools you need for accurate financial tracking and reporting.
Business Value:
- Automate invoice creation and reduce manual data entry by 80%
- Get real-time visibility into cash flow and outstanding receivables
- Generate financial reports instantly for decision-making
- Ensure tax compliance with automated tax calculations
- Reduce month-end closing time from days to hours
¶ Getting Started
¶ Prerequisites
Before using the Accounting module effectively, ensure you have:
- ✅ Configured company information (name, address, tax ID)
- ✅ Set up chart of accounts for your business type
- ✅ Configured taxes applicable to your region
- ✅ Set up fiscal year and periods
- ✅ Created bank accounts in the system
- ✅ Defined payment terms (Net 30, Net 60, etc.)
¶ Initial Configuration
¶ 1. Configure Accounting Settings
Navigate to Accounting → Configuration → Settings
Essential Settings:
¶ Invoicing Section
- ✅ Invoice Terms - Default terms and conditions
- ✅ Payment Terms - Net 30, Net 60, etc.
- ✅ Discounts - Early payment discounts
- ✅ Cash Rounding - For countries requiring rounded totals
¶ Taxes Section
- ✅ Sales Tax/VAT - Configure based on your country
- ✅ Tax Display - Show tax-included or tax-excluded prices
- ✅ Fiscal Positions - For different tax scenarios
¶ Bank & Cash Section
- ✅ Bank Accounts - Connect your bank feeds
- ✅ Payment Acquirers - Online payment methods
- ✅ Cash Discounts - Early payment incentives
¶ 2. Set Up Chart of Accounts
Path: Accounting → Configuration → Chart of Accounts
Your chart of accounts is the backbone of your accounting system.
Standard Account Types:
- Assets - What you own (cash, receivables, inventory, equipment)
- Liabilities - What you owe (payables, loans, credit cards)
- Equity - Owner's stake
- Revenue - Sales and income
- Expenses - Costs of running the business
Sherkety ERP Pre-Configured:
- Select your country during setup
- System installs appropriate chart of accounts
- Customizable to your needs
¶ 3. Configure Taxes
Path: Accounting → Configuration → Taxes**
Tax Setup:
- Click Create
- Enter tax name (e.g., "Sales Tax 5%", "VAT 15%")
- Set Tax Computation: Percentage of Price
- Enter Amount: 15% (for example)
- Define Tax Scope: Sales or Purchase
- Set accounts for tax collection/payment
- Save
Example Tax Configurations:
- Sales Tax (US): 5-10% depending on state
- VAT (Europe/Middle East): 15-25%
- GST (India/Australia): 5-18% multi-rate system
¶ Daily Operations
¶ Workflow 1: Create and Send Customer Invoice
Business Scenario: You delivered products worth $1,000 to a customer. Time to bill them.
¶ Step 1: Create Invoice
- Navigate to Accounting → Customers → Invoices
- Click Create
- Select Customer
- Invoice Date auto-fills to today
- Set Due Date (based on payment terms)
¶ Step 2: Add Invoice Lines
In Invoice Lines Tab:
- Click Add a line
- Select Product or enter description
- Quantity: 10
- Unit Price: $100
- Tax: Select appropriate sales tax
- Account auto-fills based on product
- Subtotal calculated: $1,000
- Tax calculated automatically
¶ Step 3: Review and Confirm
Before confirming:
- Review all line items
- Check customer details
- Verify payment terms
- Add any notes or terms & conditions
Click Confirm:
- Invoice number assigned (e.g., INV/2025/0042)
- Status changes to "Posted"
- Journal entry created automatically:
- Debit: Accounts Receivable $1,150
- Credit: Revenue $1,000
- Credit: Sales Tax Payable $150
¶ Step 4: Send to Customer
- Click Send & Print
- Email composer opens with PDF attached
- Customize email message
- Click Send
- Customer receives professional invoice PDF
Result: Invoice is now in "Posted" status, awaiting payment. Customer has received it via email.
¶ Workflow 2: Register Customer Payment
Business Scenario: Customer pays the $1,150 invoice via bank transfer.
¶ Method 1: Register Payment from Invoice
- Open the invoice
- Click Register Payment button
- Payment dialog appears:
- Amount: $1,150 (auto-filled)
- Payment Date: Today
- Journal: Bank (select bank account)
- Payment Method: Manual (or Bank Transfer)
- Click Create Payment
Result:
- Invoice marked as "Paid"
- Journal entry created:
- Debit: Bank Account $1,150
- Credit: Accounts Receivable $1,150
- Payment appears in bank journal
¶ Method 2: Register Payment Separately
Use Case: Batch payment processing
- Navigate to Accounting → Customers → Payments
- Click Create
- Payment Type: Receive Money
- Partner: Select customer
- Amount: $1,150
- Reconcile with: Select outstanding invoice(s)
- Create Payment
¶ Partial Payments
Scenario: Customer pays $500 now, $650 later.
First Payment:
- Register payment for $500
- Invoice shows "Partial" status
- Outstanding amount: $650
Second Payment:
- Register payment for $650
- Invoice automatically marked "Paid"
¶ Workflow 3: Record Vendor Bill
Business Scenario: You received office supplies worth $500 from a vendor with their invoice.
¶ Step 1: Create Vendor Bill
- Navigate to Accounting → Vendors → Bills
- Click Create
- Select Vendor
- Enter Vendor Reference (their invoice number)
- Bill Date: Date on their invoice
- Due Date: Based on payment terms
¶ Step 2: Enter Bill Details
- Add line items matching vendor invoice
- Product: Office Supplies
- Quantity and unit price
- Select appropriate expense account
- Add purchase tax if applicable
- Total: $500 + tax
¶ Step 3: Confirm Bill
- Click Confirm
- Bill number assigned
- Journal entry created:
- Debit: Office Supplies Expense $500
- Debit: Input VAT $75 (if applicable)
- Credit: Accounts Payable $575
Result: Bill recorded, shows as "Posted" and unpaid, appears in payables report.
¶ Workflow 4: Pay Vendor Bill
Business Scenario: Time to pay the $575 owed to the office supplies vendor.
¶ Payment Process
- Open the vendor bill
- Click Register Payment
- Amount: $575
- Payment Date: Today
- Journal: Bank
- Payment Method: Check or Bank Transfer
- Memo: Check number or reference
- Click Create Payment
Result:
- Bill marked as "Paid"
- Journal entry:
- Debit: Accounts Payable $575
- Credit: Bank Account $575
- Payment recorded in bank journal
¶ Workflow 5: Bank Reconciliation
Business Scenario: Month-end - reconcile your Sherkety ERP bank transactions with your actual bank statement.
¶ Preparation
Download bank statement:
- Most banks provide CSV, OFX, or QBO formats
- Sherkety ERP can import these automatically
¶ Reconciliation Process
- Navigate to Accounting → Accounting → Reconciliation
- Select Bank Journal
- Enter Ending Balance from bank statement
- Enter Statement Date
- Click Start Reconciliation
System shows:
- Left side: Bank statement lines (imported or manual)
- Right side: Sherkety ERP transactions
Match Transactions:
- For each bank line, find matching Sherkety transaction
- Click checkmark to match
- Auto-match button finds obvious matches
- For unmatched:
- Create: New transaction (bank fees, interest, etc.)
- Defer: Handle later
Complete Reconciliation:
- When Difference = 0, click Validate
- Reconciliation locked
- Period closed
Benefits:
- Catch errors or missing transactions
- Verify accuracy of accounting data
- Detect fraud or unauthorized transactions
¶ Advanced Features
¶ Multi-Currency Accounting
Business Scenario: You invoice a European customer in EUR while your base currency is USD.
¶ Setup
- Accounting → Configuration → Currencies
- Activate currencies you need (EUR, GBP, etc.)
- Configure exchange rates (manual or automatic update)
¶ Create Multi-Currency Invoice
- Create invoice as normal
- Currency: Select EUR
- Enter amounts in EUR
- System converts to USD using current rate
- Both currencies shown on invoice
Journal Entry Created:
- Receivable in USD (converted)
- Revenue in USD (converted)
- Exchange gain/loss account (if rate fluctuates)
When Payment Received:
- If exchange rate changed → Gain or Loss recorded
- Automatic calculation
¶ Credit Notes (Refunds)
Business Scenario: Customer returns products worth $200 from an invoice.
¶ Create Credit Note
- Open original invoice
- Click Credit Note button
- Options:
- Partial Refund - Specify amount/items
- Full Refund - Entire invoice
- Reason: Returns, Discount, Error, etc.
- Select lines to credit
- Click Create
Result:
- Credit note created (negative invoice)
- Journal entry reverses original:
- Debit: Revenue $200
- Credit: Accounts Receivable $200
- Can be applied to future invoices
¶ Batch Payments
Business Scenario: You need to pay 20 vendor bills at once.
¶ Process
- Accounting → Vendors → Bills
- Filter: Status = Posted (unpaid)
- Select multiple bills (checkboxes)
- Action → Register Payment
- Batch Payment dialog:
- Select bank account
- Payment date
- Payment method
- Click Create Payments
Result:
- All bills marked paid
- Single bank file generated (if using SEPA, ACH, etc.)
- Significant time savings
¶ Analytic Accounting (Cost Centers)
Business Scenario: Track expenses by department or project.
¶ Setup Analytic Accounts
- Accounting → Configuration → Analytic Accounts
- Create accounts: "Marketing", "R&D", "Operations"
¶ Use in Transactions
On invoice/bill lines:
- Add Analytic Account column
- Assign each line to department
- Post transaction
Reporting:
- Accounting → Reporting → Analytic Accounts
- View profit/loss by department
- Compare budget vs actual
- Allocate overhead
Use Cases:
- Department budgeting
- Project profitability
- Client-specific costs
- Grant tracking
¶ Integration Scenarios
¶ Accounting ↔ Sales Integration
Workflow: Sales order → Invoice → Payment → Revenue
How It Works:
- Create Sales Order in Sales module
- Deliver Products (Inventory module)
- Create Invoice from sales order
- Product prices auto-filled
- Taxes applied
- Customer info populated
- Invoice Confirmed in Accounting
- Journal entry creates revenue
- Payment Registered
- Receivable cleared
- Cash received in bank account
Automatic Integration:
- Sales module creates draft invoices
- Accounting posts and tracks payments
- Revenue recognized automatically
- No duplicate data entry
¶ Accounting ↔ Purchase Integration
Workflow: Purchase order → Receipt → Vendor bill → Payment
How It Works:
- Create Purchase Order in Purchase module
- Receive Products (Inventory module)
- Create Vendor Bill from purchase
- Products and prices auto-filled
- Vendor info populated
- Bill Confirmed in Accounting
- Expense recorded
- Payable created
- Payment Made
- Payable cleared
- Bank reduced
¶ Accounting ↔ Inventory Integration
Workflow: Inventory movements → Journal entries
Automated Accounting for Inventory:
When Product Received:
- Debit: Inventory Asset $1,000
- Credit: Goods Received Not Invoiced $1,000
When Product Delivered:
- Debit: Cost of Goods Sold $1,000
- Credit: Inventory Asset $1,000
Configuration Required:
- Products must have Product Category with accounts configured
- Accounting → Configuration → Product Categories
- Set: Stock Valuation Account, Expense Account, Income Account
¶ Reporting & Analysis
¶ Standard Reports
¶ Profit & Loss Statement
Path: Accounting → Reporting → Profit & Loss
Shows:
- Revenue (by product/category)
- Cost of Goods Sold
- Gross Profit
- Operating Expenses (by type)
- Net Profit
Filters:
- Date Range (This Month, Quarter, Year)
- Analytic Account (Department)
- Compare Periods
Use Cases:
- Monthly management meetings
- Year-end financial review
- Department performance
- Identify cost savings opportunities
¶ Balance Sheet
Path: Accounting → Reporting → Balance Sheet
Shows:
- Assets: Current (cash, receivables) + Fixed (equipment, property)
- Liabilities: Current (payables) + Long-term (loans)
- Equity: Owner's investment + retained earnings
Date: As of specific date (e.g., December 31, 2025)
Use Cases:
- Loan applications
- Investor presentations
- Company valuation
- Financial health assessment
¶ Aged Receivables
Path: Accounting → Reporting → Aged Receivables
Shows:
- Who owes you money
- How long they've owed it
- Aging buckets: Current, 30 days, 60 days, 90+ days
Actions:
- Send payment reminders
- Collection efforts
- Bad debt provisions
Example:
Customer A: $5,000 (Current), $2,000 (30 days), $1,000 (60 days)
Customer B: $3,000 (Current)
Total: $11,000
¶ Aged Payables
Path: Accounting → Reporting → Aged Payables
Shows:
- Who you owe money to
- Payment due dates
- Aging buckets
Use for:
- Cash flow planning
- Vendor relationship management
- Avoid late fees
¶ Tax Report
Path: Accounting → Reporting → Tax Report
Shows:
- Sales tax collected
- Purchase tax paid
- Net tax owed or refund
- By period (monthly, quarterly)
Use for:
- Tax return preparation
- VAT submissions
- Sales tax filings
¶ Best Practices
¶ ✅ Invoice Management
Send Invoices Promptly
- Invoice within 24 hours of delivery
- Faster invoicing = faster payment
- Set up automatic invoicing from sales orders
Clear Payment Terms
- Specify due date prominently
- Offer early payment discounts (e.g., 2% if paid in 10 days)
- Include payment instructions (bank details, online payment link)
Follow Up on Overdue Invoices
- Automated reminders at 7, 14, 30 days overdue
- Personal phone call for large amounts
- Escalation process for chronic late payers
¶ ✅ Cash Flow Management
Monitor Daily Cash Position
- Review bank balances every morning
- Accounting → Dashboard shows cash summary
- Set up low-balance alerts
Forecast Cash Flow
- Expected Inflows: Aged receivables (when you'll get paid)
- Expected Outflows: Aged payables (when bills due)
- Plan for shortfalls in advance
Accelerate Collections
- Offer payment plans for large invoices
- Accept credit cards (faster than checks)
- Incentivize early payment
¶ ✅ Month-End Close
Checklist for Fast Month-End:
- Reconcile Bank Accounts - Do this weekly, not monthly
- Review Unposted Entries - Confirm or delete drafts
- Accrue Expenses - Record expenses received but not yet billed
- Defer Revenue - For prepayments or subscriptions
- Depreciation - Run automated depreciation (if fixed assets module)
- Review Reports - P&L, Balance Sheet for errors
- Close Period - Lock period to prevent changes
Goal: Close within 5 business days of month-end.
¶ ✅ Compliance and Audit Trail
Never Delete Posted Transactions
- Always use reversing entries or credit notes
- Sherkety ERP maintains complete audit trail
- Every edit logged with user and timestamp
Segregation of Duties
- Different people create vs approve invoices/payments
- Configure approval workflows
- Prevents fraud
Regular Backups
- Daily automated backups
- Store off-site
- Test restore process quarterly
¶ Troubleshooting
¶ Issue: Cannot Post Invoice/Bill
Symptoms: Error when clicking "Confirm"
Possible Causes:
-
Missing account on product/category
- Solution: Accounting → Configuration → Product Categories
- Set Income Account and Expense Account
-
Tax configuration incomplete
- Solution: Edit tax, ensure accounts configured
-
Locked period
- Solution: Administrator must unlock period
¶ Issue: Bank Reconciliation Won't Balance
Symptoms: Difference ≠ 0 when trying to validate
Possible Causes:
-
Missing transactions in Sherkety
- Bank fees, interest, transfers
- Solution: Create these transactions
-
Missing transactions on bank statement
- Checks not yet cashed
- Solution: Record as outstanding checks
-
Data entry error
- Wrong amount entered
- Solution: Search for discrepancy
Tip: Start with small discrepancies first (under $100) - often rounding or fees.
¶ Issue: Wrong Exchange Rate on Invoice
Symptoms: Multi-currency invoice using incorrect rate
Possible Causes:
-
Exchange rate not updated
- Solution: Accounting → Configuration → Currencies
- Update rates manually or enable automatic update
-
Rate date mismatch
- System uses rate from invoice date
- Solution: Adjust invoice date or update rate for that date
¶ Frequently Asked Questions
Q: Can I edit an invoice after it's confirmed (posted)?
A: No - posted transactions are locked for audit compliance.
Workaround:
- For customer invoices: Create Credit Note, then create new correct invoice
- For vendor bills: Use Reverse Entry, then re-enter correctly
- Never delete posted transactions
Q: How do I handle down payments or deposits?
A:
- Create Down Payment Invoice for deposit amount (e.g., $1,000)
- Customer pays deposit
- Later, create Final Invoice for full amount ($10,000)
- Add line: "Less: Deposit" -$1,000
- Customer pays remaining $9,000
Alternative: Use down payment feature if enabled in settings.
Q: Can customers pay invoices online?
A: Yes, if you configure Payment Acquirers:
- Accounting → Configuration → Payment Acquirers
- Enable: Stripe, PayPal, Authorize.net, etc.
- Configure API keys
- Send invoice - includes "Pay Online" button
- Customer clicks, pays instantly
- Payment auto-registered in Sherkety ERP
Q: How do I handle invoice in foreign currency when payment differs due to exchange rate?
A:
- Invoice: €1,000 when rate was 1.10 = $1,100 receivable
- Payment: €1,000 when rate is 1.08 = $1,080 received
- Exchange Loss: $20 auto-recorded
- Invoice marked paid
- Loss appears in P&L under "Exchange Rate Differences"
Q: What's the difference between Journal Entries and Invoices?
A:
- Invoices/Bills: Customer/vendor transactions with payment tracking
- Journal Entries: Direct accounting entries (adjustments, accruals, corrections)
Use invoices for: Normal business transactions Use journal entries for: Accountant adjustments, depreciation, accruals
¶ Related Modules
- Sales - Create invoices from sales orders
- Purchase - Create vendor bills from purchase orders
- Inventory - Automated inventory accounting
- Expenses - Employee expense reimbursement (if installed)
- Point of Sale - Retail transaction accounting
¶ Keyboard Shortcuts
Alt + C- Create new recordAlt + E- Edit current recordAlt + S- SaveEsc- Discard changes/- Global search
¶ Video Tutorials
(Coming soon)
- Accounting Quick Start (8 min)
- Invoicing Best Practices (10 min)
- Bank Reconciliation Workflow (12 min)
- Month-End Close Process (15 min)
¶ Glossary
Accounts Receivable - Money owed to you by customers for invoices sent.
Accounts Payable - Money you owe to vendors for bills received.
Chart of Accounts - Complete list of all accounts used in your accounting (assets, liabilities, revenue, expenses).
Journal Entry - Record of a financial transaction with debits and credits.
Debit/Credit - Accounting double-entry system. Every transaction has equal debits and credits.
Reconciliation - Matching your accounting records with bank statements to ensure accuracy.
Fiscal Year - Your company's accounting year (may differ from calendar year).
Accrual Accounting - Record revenue when earned and expenses when incurred (vs cash accounting).
Analytic Account - Cost center or project for tracking expenses by department/project.
Credit Note - Negative invoice issued for returns, discounts, or corrections.
Payment Terms - When payment is due (Net 30 = due in 30 days).
Tax-Excluded vs Tax-Included - Whether displayed prices include tax or show tax separately.