How to Automatically Create Accounting Entries for Approved Invoices and Access Them in the Journal

What are Automatic Accounting Entries?

When you create business documents in the system such as a sales invoice or purchase invoice in Qoyod and then approve them, the system automatically creates an accounting entry linked to that invoice.

In short, this means:

• You create the invoice
• You approve it
• The system automatically records the accounting impact

Therefore, you don’t need to create the accounting entry manually as long as the document was created correctly within the system.

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When is the Accounting Entry Created?

The accounting entry is created only after the invoice is approved.

If the Invoice is in “Draft” or “Pending Approval” Status

The system:

• Does not create an accounting entry
• Does not consider the invoice accounting approved
• Does not reflect its final impact on the accounts

If the Invoice is Approved

The system:

• Automatically creates the accounting entry
• Links the entry to the invoice
• Shows the invoice impact in reports and accounts

Important Summary

• Draft or Pending Approval = No accounting entry
• Approved = Automatic accounting entry is created

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How Does the System Know Which Accounts to Use for the Automatic Accounting Entry Generated from Invoices?

The system doesn’t choose accounts randomly; it relies on the accounting settings linked to the product.

Meaning:
When you define a product in the system, it is linked to accounting accounts such as:

• The revenue account defined for the product
• The expense account defined for the product
• The inventory account defined for the location

When this product is used in an invoice, the system automatically pulls these accounts to create the entry.

What Does This Mean for the User?

If the accounts defined on the product are correct, the entry will appear correctly.
But if the accounts linked to the product are incorrect, that will be reflected in the accounting entry resulting from the invoice.

Therefore, It’s Always Important To:

Verify the product settings before issuing invoices, especially if the product is:

• An inventory item
• A service
• A fixed asset
• Or has special accounting treatment

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First: Accounting Entries for Sales Invoices

When a sales invoice is issued and approved, the resulting accounting entry differs based on the type of product in the invoice.

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Case One: Sales Invoice for a Non-Inventory Product

A non-inventory product means:

• A service
• Or a product whose quantity is not tracked in warehouses

What Does the System Do Here?

The system creates an accounting entry that includes:

• Debit: Accounts Receivable : shows the customer name in the “Details” field for the total invoice amount
• Credit: VAT Account for the tax amount: the name of the tax used is shown in the details field.
• Credit: Revenue Account Defined for the Product for the product or service value before tax

Simplified Meaning of This Entry

The system understands that:

• The customer owes an amount
• The business has earned revenue
• There is tax due on this invoice

Simplified Example

If the invoice value is:

• Service value: 1000
• Tax: 150
• Total: 1150

The accounting impact would be as follows:

• Accounts Receivable: 1150
• Revenue: 1000
• VAT: 150

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Case Two: Sales Invoice for an Inventory Product

An inventory product means:
A product whose quantity is tracked in the warehouse, such as goods and stored materials.

What is the Automatic Accounting Entry Reflected for a Sales Invoice of a Stored Product?

In this case, the system doesn’t just record the sale; it also records the impact of the quantity leaving inventory.

Therefore, the system creates an automatic accounting entry that includes:

• Debit: Accounts Receivable for the total invoice amount showing the customer name in the details
• Debit: The Expense Account Defined for the Product, such as Cost of Goods Sold for the product cost “average product cost”.
• Credit: Inventory Account for the inventory account defined for the location for the same product cost
• Credit: VAT Account for the tax amount showing the name of the tax used in the details field
• Credit: Revenue Account Defined for the Product for the sales value before tax

Why Does This Entry Have More Details?

Because selling an inventory product has two impacts:

1) Sales Impact

• Revenue is earned
• Tax is recorded
• The customer becomes a debtor

2) Inventory Impact

• A quantity leaves the warehouse
• Inventory decreases
• The cost of this inventory is charged to the appropriate expense defined in the product data, such as cost of goods sold

Simplified Meaning

When selling an inventory product, the system records two things at once:

• That you sold the product
• That this product left inventory and has a cost

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Second: Accounting Entries for Purchase Invoices

When a purchase invoice is issued and approved, the automatic accounting entry differs based on the type of item purchased.

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Case One: Purchase Invoice for a Non-Inventory Product or Service

Such as:

• Maintenance expense
• Consulting service
• Subscription
• Or any item that doesn’t enter inventory

The Entry the System Creates

• Debit: Expense or Cost Account linked to the product for the purchase value before tax
• Debit: VAT Account for the tax amount with the tax type shown in the details field.
• Credit: Accounts Payable for the total invoice amount showing the supplier name in the “Details” field.

Simplified Meaning

The system understands that:

• The business incurred an expense
• There is tax paid on purchases
• There is an amount due to the supplier

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Case Two: Purchase Invoice for an Inventory Product

Such as purchasing goods or materials that enter the warehouse.

The Entry the System Creates

• Debit: Inventory Account for the purchase value before tax
• Debit: Purchase VAT Account for the tax amount
• Credit: Accounts Payable showing the supplier name for the total invoice amount

Simplified Meaning

The system considers that:

• A new quantity entered inventory
• Inventory value increased
• There is purchase tax
• The supplier has an amount due

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Case Three: Purchase Invoice for a Fixed Asset

Such as:

• Equipment
• Machinery
• Furniture
• An asset used for a long period in the business

The Entry the System Creates

• Debit: Fixed Asset Account for the asset value before tax
• Debit: VAT Account for the tax amount
• Credit: Accounts Payable showing the supplier name for the total invoice amount

Simplified Meaning

The system here doesn’t consider the amount a direct expense or inventory, but rather a fixed asset that is recorded as part of the business’s assets.

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How Can I View the Accounting Entry Associated with a Specific Invoice?

If you want to know the automatic accounting entry that the system created for a sales or purchase invoice, you can access it through the Journal Entry Register.

Steps

Step 1

Go to Reports

Step 2

Select Journal Entry Register

Step 3

From the filter options, select the appropriate data, such as:

• The Time Period when the invoice was created
• Document Type
  Such as:
  • Sales invoice
  • Purchase invoice

Step 4

After selecting the document type, a Document Number field will appear

Step 5

Enter the Invoice Number or its reference number

Step 6

Click Search

Result

The accounting entry associated with this invoice will appear directly

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Can I Edit the Automatic Accounting Entry Resulting from an Invoice?

No, you cannot edit the automatic accounting entries resulting from invoices directly.

Why?

Because this entry is linked to the document itself, and the system is designed this way so that data remains interconnected and accurate.

This means:

• The invoice is the basis
• The entry results from it automatically
• Therefore, editing the entry separately is not available

What Should I Do If There’s an Error?

If there’s an error in the invoice itself, the entry is not edited directly; instead, the invoice is handled or a reverse document is issued depending on the situation.

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How Can I Cancel the Impact of an Invoice After Approval?

If an invoice was approved and the accounting entry appeared, and then you needed to cancel its impact, the handling method differs based on the invoice type.

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Canceling the Impact of a Sales Invoice

If the problem is with a sales invoice and it was approved, you can create:

A Credit Memo

The system automatically creates a reverse entry that cancels or reduces the impact of the original invoice based on the credit memo amount.

What Does This Mean?

Instead of editing the original entry, a correct accounting document is created that reflects the transaction in a systematic way.

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Canceling the Impact of a Purchase Invoice

If the problem is with a purchase invoice, you can use one of two options depending on the situation:

Option One: Create a Debit Memo

If you want to reverse the impact of the purchase invoice or part of it

Option Two: Delete the Invoice

In this case:

• The invoice is deleted
• And the entry linked to it is automatically deleted and the reference number of the entry is not used again

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Does a Draft or Pending Approval Invoice Affect Inventory?

No, an invoice in draft status does not affect inventory in a final way, nor does it create an accounting entry.

What Does This Mean?

If you create a draft sales invoice for an inventory product:

• The quantity will not be deducted from inventory in a final way
• It will not be automatically reserved

And if you create a draft purchase invoice:

• The quantity will not actually be added to inventory
• Its final accounting impact will not appear

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What Should I Do If I Want to Reserve a Quantity for an Invoice That’s Still a Draft?

This is a very important point because some users expect that simply creating a draft invoice means reserving the quantity, and this is not correct.

Available as an Alternative Solution

If you need to temporarily reserve a quantity from inventory, you can do it this way:

Step 1

Create a warehouse location or subsidiary warehouse named something like:
Reserved Inventory

Step 2

Use the Transfer Inventory feature

Step 3

Transfer the quantity you want to reserve from its original location to:
Reserved Inventory

Result

This way the quantity becomes reserved or isolated from the available quantity for sale or use, until a final decision is made regarding the invoice.

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Important Points to Pay Attention To

1) The Automatic Accounting Entry Does Not Appear for a Draft Invoice

If the customer is looking for the entry and can’t find it, you should first verify:
Is the invoice still draft or has it been approved?

2) The Accuracy of the Automatic Accounting Entry Reflected from Invoices Depends on Product Settings

If the entry appears with unexpected accounts, the cause is usually the accounts defined on the product itself.

3) The Entry is Not Edited Directly

If correction of the impact is required, it is done through:

• Editing the document before approval
• Or issuing a credit memo / debit memo

4) Draft Does Not Mean Inventory Reservation

Creating a draft invoice is not sufficient to reserve the quantity, and an alternative solution must be used if the goal is temporary reservation

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Examples of Questions a Customer Might Ask

Why Didn’t the Automatic Accounting Entry Appear for the Invoice?

The reason is usually that the invoice is still in draft status and hasn’t been approved yet.

Does the System Create the Accounting Entry Automatically When I Create and Approve the Invoice?

Yes, as soon as the invoice is approved, the system creates the accounting entry automatically.

Can I Edit the Automatic Accounting Entry Resulting from Invoices Directly?

No, the entry resulting from the invoice cannot be edited directly because it is linked to the document itself.

Where Can I Find the Accounting Entry for the Invoice?

Through:
Reports > Journal Entry Register
Then select the document type and invoice number.

Why Did the Automatic Accounting Entry Resulting from the Invoice Appear with an Incorrect Account?

Usually because the accounts defined in the product settings are what the system uses when creating the entry.

Does a Draft Invoice Reserve Inventory?

No, a draft invoice does not automatically reserve the quantity.

What’s the Solution If I Want to Reserve the Quantity Before Approving the Invoice?

You can create a warehouse location named Reserved Inventory and temporarily transfer the quantity to it using Transfer Inventory.

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