documentation/index.rst
2015-03-18 15:10:04 +01:00

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:classes: stripe
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Accounting Memento For Entrepreneurs
====================================
.. h:div:: intro-list
.. rst-class:: intro-p-l
The **Profit and Loss** (P&L) report shows the performance of the company
over a specific period (usually the current year).
* .. rst-class:: intro-gross-profit
The **Gross Profit** equals the revenues from sales minus the cost of
goods sold.
* .. rst-class:: intro-opex
**Operating Expenses** (OPEX) include administration, sales and R&D
salaries as well as rent and utilities, miscellaneous costs, insurances,
… anything beyond the costs of products sold.
.. rst-class:: intro-balance
The **Balance Sheet** is a snapshot of the company's finances at a specific
date (as opposed to the Profit and Loss which is an analysis over a period)
* .. rst-class:: intro-assets
**Assets** represent the company's wealth, things it owns. Fixed assets
includes building and offices, current assets include bank accounts and
cash. A client owing money is an asset. An employee is not an asset.
* .. rst-class:: intro-liabilities
**Liabilities** are obligations from past events that the company will
have to pay in the future (utility bills, debts, unpaid suppliers).
* .. rst-class:: intro-equity
**Equity** is the amount of the funds contributed by the owners (founders
or shareholders) plus previously retained earnings (or losses).
.. rst-class:: intro-retained
Each year, net profits (or losses) are reported to retained earnings.
.. h:div:: force-right accounts-table
.. placeholder
What is owned (an asset) has been financed through debts to reimburse
(liabilities) or equity (profits, capital).
A difference is made between buying an assets (e.g. a building) and expenses
(e.g. fuel). Assets have an intrinsic value over time, versus expenses having
value in them being consumed for the company to "work".
.. rst-class:: force-right
.. highlights:: Assets = Liabilities + Equity
Chart of Accounts
=================
The **chart of accounts** lists all the accounts, whether they are balance
sheet accounts or P&L accounts. Every financial transaction (e.g. a payment, an
invoice) impacts accounts by moving value from one account (credit) to an other
account (debit).
.. h:div:: force-right
.. highlights:: Balance = Debit - Credit
.. h:div:: chart-of-accounts
.. placeholder
Journal Entries
===============
Every financial document of the company (e.g. an invoice, a bank statement, a
pay slip, a capital increase contract) is recorded as a journal entry,
impacting several accounts.
For a journal entry to be *balanced*, the sum of all its debits must be equal
to the sum of all its credits.
.. h:div:: force-right journal-entries
examples of accounting entries for various transactions. Example:
Example 1: Customer Invoice:
Explanation:
- You generate a revenue of $1,000
- You have a tax to pay of $90
- The customer owes $1,090
Configuration:
- Income: defined on the product, or the product category
- Account Receivable: defined on the customer
- Tax: defined on the tax set on the invoice line
The fiscal position used on the invoice may have a rule that
replaces the Income Account or the tax defined on the product by another
one.
Example 2: Customer Payment:
Explanation:
- Your customer owes $1,090 less
- Your receive $1,090 on your bank account
Configuration:
- Bank Account: defined on the related bank journal
- Account Receivable: defined on the customer
Reconciliation
==============
Reconciliation is the process of linking journal items of a specific account,
matching credits and debits.
Its primary purpose is to link payments to their related invoices in order to
mark invoices that are paid and clear the customer statement. This is done by
doing a reconciliation on the *Accounts Receivable* account.
An invoice is marked as paid when its Accounts Receivable journal items are
reconciled with the related payment journal items.
Reconciliation is performed automatically by the system when:
* the payment is registered directly on the invoice
* the links between the payments and the invoices are detected at the bank
matching process
.. rst-class:: force-right reconciliation-example
Customer Statement Example
--------------------------
.. rst-class:: table-condensed d-c-table
+-------------------------+-------------------------+-------------------------+
|Accounts Receivable |Debit |Credit |
+=========================+=========================+=========================+
|Invoice 1 |100 | |
+-------------------------+-------------------------+-------------------------+
|Payment 1.1 | |70 |
+-------------------------+-------------------------+-------------------------+
|Invoice 2 |65 | |
+-------------------------+-------------------------+-------------------------+
|Payment 1.2 | |30 |
+-------------------------+-------------------------+-------------------------+
|Payment 2 | |65 |
+-------------------------+-------------------------+-------------------------+
|Invoice 3 |50 | |
+-------------------------+-------------------------+-------------------------+
| | | |
+-------------------------+-------------------------+-------------------------+
|Total To Pay |50 | |
+-------------------------+-------------------------+-------------------------+