I’m part of a new startup company and we are assessing ERPNext as a possible solution for our needs - so far so good! It seems to have all the features we could possibly need!
I’m currently experimenting with the demo system a little and am trying to create an opening account balance via the Journal Entry method. I’ve selected Entry Type as Opening Entry, and entered my credit into the correct account - but its asking for a Party Type.
My current Party Types are limited to Suppliers and Customers - how would I go about creating a type for a capital investment - in this instance from my shareholders?
Welcome to ERPNext! We do hope you will find ERPNext appropriate for your use and will choose to adopt ERPNext.
Unless you have set up the Account as a Supplier or Customer, you can leave those fields blank. Those are only applicable, as you have already figured out for Customers and Suppliers.
Please change the “account type” for the account you are selecting for Capital Investment. To do that, go to chart of accounts, click on Edit button for the account. And then set the “Account Type” as blank instead of “Payable”. After that, system will not ask for Party, while doing the opening entry.
Hi @JayRam and @nabinhait thanks for the quick responses!
I changed my Account Type from Bank to blank as you suggested, and realised from the prompt my bank account isn’t what’s causing the problem, rather a default account listed as Creditors.
Row 10: Party Type and Party is required for Receivable / Payable account Creditors - IP
The name Creditors would seem to imply I should actually put my opening investment into this account, is that its purpose…?
Oh no! The Creditors is an Accounts Payable account and that always needs a party. Please pick another account under the equity heading in the Chart of Accounts.
Home>Accounts>Chart of Accounts and drill down on Equity and you can add an appropriate account. Pick that account and you should be good.
No, the Creditors account is used to record the transactions against your supplier. To put opening investment, use/create any other account.
I’m unable to use any account that you’ve mentioned.
When I go to Accounts > New Journal Entry and choose Entry Type as Opening Entry it instantly displays every account listed on the system - from Accumulated Depreciation right through to VAT.
Even if I specify 0 and 0 respectively for Credit and Debit in the Creditors row it still prompts for Party Type. Is this a bug, or am I going about adding an Opening Balance incorrectly?
To follow on from the above, choosing one of my Suppliers as Party Type allows me to put in a 0/0 Debit/Credit entry, but I’m then also prompted for a Party Type in Debitors.
Also, as I import from overseas, my foreign currency accounts are prompting for exchange rates to be entered, even though those accounts are currently empty. Presumably I can simply add the exchange rate for the date in question but not enter any figures to overcome this?
Okay, let’s go step by step on this one. You are saying that you want to record your investment into this company as equity? Right?.
Is it one of the following:
You are putting in Money in form of check or cash or wire. Which hits your bank or cash account. So your first step would be to create a bank account or a cash account or use or modify an existing one. To do this go to Home>Accounts>Chart of Accounts, expand on Assets>Current Assets and see you’d like to create a new cash/bank account or use or modify an existing one. For modifying, click on the account and hit Edit. In the ensuing screen modify the values as appropriate.
Now go to base tree on Chart of Accounts and Expand Equity. Now you can use an appropriate account, say Capital Stock.
Now go back to the journal entry, pick the Equity account on the credit side and debit the Bank/Cssh account. Enter the amount. Save submit!
You have already spent money on the business and you are just recording it. Go to the Assets branch on the CoA and Temporary Accounts branch. Now use the Temporary Opening account or create a suitable one and use that in lieu of the Cash/Bank account in the preceding paragraph.
While ERPNext is easy to use, it has to work with the accounting standards for each country. Suggest you Google for an appropriate Accounting Entries site for your country and follow along the suggestions that site or page makes for various things.
Sometime into the future when you are ready to confront your accountant, you can ask her/him to help you with the balance amount in the temporary account.
Hope this helps.
Thanks for going into this level of detail. This just helped me out.