Journal Entries and Adjustments

What Are Journal Entries?

In accounting, a journal entry is a record of a financial transaction. In TimelyChurch, most everyday entries you create (through the Transactions page, the Check Register, a bill payment, or a donation) are recorded for you automatically. Behind the scenes, every one of them keeps your books in balance.

For adjustments that fall outside standard income, expense, or transfer workflows, TimelyChurch provides a dedicated Journal Entry tool.

Note: Manual Journal Entries are a Full Accounting feature. If your view is set to Simple Checkbook, the Journal Entries tool is hidden, and you record adjustments as regular Money In / Money Out transactions instead (see "Adjustments in Simple Mode" below). You can switch your view with the Accounting Mode button on the Finance Dashboard.

When to Use a Journal Entry

Manual journal entries handle accounting adjustments such as:

• Correcting errors: fixing an amount posted to an incorrect ledger account.
• Recording depreciation: writing down the value of equipment or property over time.
• Year-end adjustments: accruals, prepaid expense allocations, or closing entries.
• Reclassifications: moving an amount from one account to another after the fact.
• Recording non-cash transactions: logging in-kind gifts, donated goods, or write-offs.
• Opening-balance corrections: fine-tuning starting balances that were entered during onboarding (though the Opening Balances wizard is generally preferred).

Tip: Before reaching for a manual journal entry, check whether a split transaction solves the problem. If you are trying to allocate a single deposit or check across multiple categories or funds, splits are usually cleaner than a manual journal entry.

Where to Find Journal Entries

In Full Accounting mode, you can access the tool in two ways:

• From Transactions: open Finances > Accounting > Transactions, click the New Transaction button (it opens a menu), and select New Journal Entry.
• From the Setup menu: in the accounting tab bar, open the Setup ▾ dropdown and select Journal Entries. This opens the Journal Entries index, where you can review historical entries or click New Journal Entry.

Note on Simple mode: In Simple mode the Setup ▾ dropdown is labeled More ▾ and does not include Journal Entries, and the Transactions tab is labeled Money In / Out. If you open a Journal Entry link while in Simple mode, TimelyChurch sends you back to the transactions page with a reminder that Journal Entries are a Full Accounting feature.

Creating a Journal Entry

A journal entry requires balanced double-entry lines: total debits must equal total credits before the entry can post.

To Record a Journal Entry

1. Navigate to Finances > Accounting > Transactions and select New Transaction > New Journal Entry (or open Setup ▾ > Journal Entries > New Journal Entry).
2. Complete the header information:
   • Date: the effective transaction date.
   • Reference: an optional reference code (such as JE-001).
   • Description: a summary explaining the purpose of the adjustment.
3. Complete the Splits table:
   • Account: select the account affected by this line (required).
   • Fund: assign a specific fund, or keep "— general —".
   • Memo: optional per-line explanation.
   • Debit or Credit: enter the amount into either the Debit column or the Credit column.
4. Click Add line to add more rows (minimum of two lines required). Use the remove button to discard a line.
5. Review the totals at the bottom. The Difference (Dr − Cr) must reach zero. The badge displays Balanced in green when debits equal credits, or Unbalanced in red when unequal. The Post Journal Entry button remains disabled until balanced.
6. Click Post Journal Entry.

Tip: Posted journal entries are read-only ("Read-only view of this posted journal entry."): you cannot edit them after the fact. If you need to change one, delete it (see below) and post a corrected entry, or post a second, offsetting entry. This keeps a clean audit trail.

Reviewing and Deleting a Journal Entry

The Journal Entries list (Setup ▾ > Journal Entries) displays all posted entries with their date, reference, and description. Click an entry to inspect its read-only view, showing each line's account, fund, memo, debit, credit, totals, and the user who posted it.

To remove an entry, open its detail view, click Delete inside the Delete this journal entry container, and confirm. The system removes the entry from your books and recalculates account balances. The deletion, with the entry's details, is recorded in the Audit Log. Deleted journal entries appear under Deleted Transactions, where they can be restored if removed accidentally.

Note: To protect your closed books, TimelyChurch will not let you post or delete a journal entry dated inside a completed reconciliation period for one of its accounts, or inside a closed fiscal year. A closed fiscal year cannot be reopened, so post any correction in the current year instead.

Adjustments in Simple Mode

When using Simple mode, adjust balances using standard transactions rather than journal entries:

1. Navigate to Finances > Accounting > Money In / Out.
2. Click New Transaction and choose the matching type:
   • New Income: increases an account balance (such as earned interest or correcting an understated deposit).
   • New Expense: decreases an account balance (such as bank fees or correcting an overstated deposit).
   • New Transfer: moves funds between accounts.
3. Enter the account, amount, date, category, and an informative description. Use prefixes like "ADJUSTMENT:" or "CORRECTION:" for clear identification.
4. Use the Notes field to detail why the adjustment was made.
5. Save the transaction.

Reversing a Transaction

If a transaction was recorded incorrectly and has already been reconciled, do not delete it; record an offsetting reversal instead.

• In Full Accounting mode: post a journal entry reversing the original lines (swapping debits and credits for the same accounts and amounts), using a description like "REVERSAL:" with the original transaction reference.
• In Simple mode: create a new transaction using the opposite transaction type with matching account, category, payee, and amount:
  • Create an expense to reverse an income entry.
  • Create an income transaction to reverse an expense entry.

In both cases, record the reason for the reversal in the notes.

Tip: The bill voiding feature does this automatically. When you void a paid bill whose payment transaction has been reconciled, TimelyChurch creates a reversal entry with "VOID:" in the description.

Recording Fund Transfers

To move money between physical bank accounts, use the New Transfer option, which updates both accounts simultaneously.

To transfer money between internal funds, choose the method that fits your accounting mode:

• In Full Accounting mode: post a journal entry allocating the source fund on one line and the destination fund on the other.
• In Simple mode: record a pair of transactions: an expense assigned to the source fund's category and an income transaction assigned to the destination fund's category, using the same date, bank account, and amount, with matching descriptions (for example, "Fund transfer from Building Fund to General Fund".

Opening Balance Adjustments

To set or adjust starting balances, use the Opening Balances wizard instead of journal entries. Access it using the Set Starting Balances or Set Conversion Balances button on the Finance Dashboard, or the Opening Balances button on the Chart of Accounts page in Full Accounting.

The wizard (labeled Opening Balances in Full mode and Starting Balances in Simple mode) establishes a cutover date and records each account's opening balance. You can re-run the wizard whenever adjustments are needed. Saving recalculates balances and updates reports without deleting historical entries.

For adjustments beyond the scope of the wizard, post an offsetting journal entry (Full mode) or an adjusting transaction (Simple mode) dated to the account's opening date. See Opening and Starting Balances.

Best Practices for Journal Entries

Always document the reason. Use the Description and per-line Memo fields to explain why the entry was made. Include the name of the person who authorized it and any relevant reference numbers.

Use clear descriptions. Start adjustment descriptions with "ADJUSTMENT:", "CORRECTION:", "REVERSAL:", or "RECLASSIFICATION:" so they are immediately identifiable when reviewing your entries later.

Keep adjustments minimal. If you find yourself making frequent adjustments, review your processes to see if the root cause can be addressed (for example, training staff on proper categorization).

Review adjustments during reconciliation. When reconciling your bank account, pay attention to adjustment entries. They should be clearly documented and justified.

Use the correct date. Adjustments should generally be dated to the period they apply to, not the date you are making the entry (unless that period has already been reconciled or the fiscal year is closed).

Related Articles

• Recording Transactions
• Split Transactions
• Audit Log
• Opening and Starting Balances

Last updated: 2026-10-21 (8.205.306).