How Accounting Works
How invoices, bills, credit notes and payments post to the ledger by themselves, and how the chart of accounts, bank reconciliation, VAT returns and periods fit together.
What Accounting does
The Accounting module is a double-entry bookkeeping system. You raise invoices, enter bills and record payments. Plenix posts each one to the ledger for you, so your profit and loss, balance sheet and VAT figures are built from the same records your team works with every day.
Key concepts
Chart of Accounts: your account structure (income, expenses, assets, liabilities). Plenix starts you with a standard set of accounts, and you can add your own.
Journal Entry: the basic accounting record. Each one has debit and credit lines that add up to the same amount.
Payment: money received from a customer or paid to a supplier. See Payments.
Tax Rate: set once and applied to invoice and bill lines. VAT on sales and VAT on purchases are tracked separately for the VAT return.
What gets posted automatically
| Event | What is posted |
|---|---|
| Invoice sent | Accounts receivable up; sales income and VAT recorded |
| Customer payment received | Bank up; accounts receivable down |
| Credit note issued | Sales income and VAT reduced; accounts receivable down |
| Bill approved | Expense (or stock) and VAT recorded; accounts payable up |
| Bill paid | Accounts payable down; bank down |
| Payroll run, approved expenses and mileage (HCM) | Staff costs and the amounts owed for them |
A few rules apply to all of them:
- Drafts are not posted. An invoice reaches the ledger when it is sent, and a bill when it is approved.
- Changes are posted as corrections. If you change an invoice or a bill after it has posted, an adjusting entry is added for the difference. Posted entries are never edited or deleted.
- Cancelling or voiding reverses the posting, so the document no longer affects your figures.
- Every source is covered. Invoices raised by recurring schedules, projects, tickets, quotes, managed print and the customer portal are posted in the same way as ones you raise by hand.
The accounts used for these postings are listed under Posting Accounts in Accounting Settings.
If a posting is waiting
A document that shows Not in the ledger has been saved, but its posting is waiting. The usual reason is that today falls in a closed accounting period. Plenix retries every ten minutes and posts it once the period is reopened.
Bank reconciliation
- Import your bank statement as a CSV file.
- Match each transaction to the invoice or bill it paid. Matching records the payment for you.
- Reconcile anything else, such as bank fees, against the account it belongs to.
VAT returns
A VAT return reads its figures from the ledger: every sent invoice, issued credit note and approved bill dated in the period. See File a VAT Return.
Multi-entity accounting
If you have more than one legal entity, see Multiple Entities, Intercompany and Consolidation.
How accounting connects to the rest of the platform
Billing: invoices, credit notes and payments all post to the ledger.
HCM (Payroll): each payroll run posts salary costs, PAYE and National Insurance.
Purchasing: receiving goods against a purchase order drafts a bill for you to check and approve.
Customer portal: customers see what they have paid, what was credited and the balance due on each invoice.
Reports: the ledger feeds the profit and loss, balance sheet, aged debtors and profitability reports.
Where to go next
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