Financial management: a concept that many understand, but few utilize. As a matter of fact, lack of monetary control and unprofitable expenditures are what bring many small businesses down. If only there existed a method of tracking your company’s debits and credits, documenting the transactions, and recording reviews. But fret not, there exist credit journals that you can use for all your business accounting needs.
What Is a Credit Journal Entry?
The minute someone utters the word “credit,” the next word in their mind is “card.” However, there’s more to that rectangular piece of plastic than what most people know. When you swipe your card on any machine, what you’re doing is borrowing money from the bank to be paid at a much later time. However, it also means that you’re essentially decreasing the money you gain due to how credits and debits work.
What all this points to is the fact that credit is a factor that lowers the total amount of revenue you gain the higher it is. Accounting jargon aside, once you understand its definition, you can begin to apply this concept to your business. Whatever the context, however, credit is always an indicator of lost revenue. Hence, it’s best to keep track of them with an accounting journal entry specifically designed for your company or business.
Diaries are a childhood therapist for many children out there. Many youngsters from before, and even until now, find solace in writing down all the cathartic perceptions they had of their world—in fact, it isn’t even just children. Statista shows that despite the majority of diary writers within the age range of 8-18, multiple other writers also use the format.
However, this comparison wasn’t just made out of the blue because “diary” and “journal” are synonyms; it’s there for a reason. What a diary and a journal have in common is that they record valuable information that is reviewable, easy to access, and can be updated regularly without much hassle. Audit reports and financial disputes are just what comes to the top of the head when thinking about what recorded information can solve, but plenty more exist if you look hard enough.
6+ Credit Journal Entry Samples
Credits, debits, checks, and balances, it’s all a complicated cluster-bundle of concepts and jargon, isn’t it? While it is overwhelming for beginners to write, it doesn’t have to be impossible. These sample templates provided below will help you with your work.
1. Credit Journal Entry Sample
2. Credit Journal Entry Processing Flow Template
3. Basic Credit Journal Entry Sample
4. Standard Credit Journal Entry Template
5. Journal Entry Debit and Credit Convention Sample
6. Printable Credit Journal Entry Template
7. Credit Journal Entry in DOC
How To Create a Credit Journal Entry
What could be more enjoyable than spending the day sitting down on a desk and taking a look at how much money you just lost? As horrendously unentertaining as that sounds, keeping track of your expenditures is vital to successful entrepreneurship as it allows you to regulate future transactions and keeps you from overspending. With that said, here are a few tips and tricks you can apply to your credit journal entry.
1. Record The Transaction
An integral part of a credit journal entry (and money management in general) is to document all transactions made. Evidence like receipts, invoices, and purchase orders not only help justify the expenditure, but they also provide reliable information you need to input, such as price, quantity, and change. As such, it is paramount that you keep a record of all transactions.
2. Use an Accounting Worksheet
An accounting worksheet is a spreadsheet designed explicitly for financial administration. This document serves as a suitable layout for all the data you need to record. Whether you are using one that’s basic and generic, or find something more frivolous, or even make your spreadsheet, utilizing an accounting worksheet will ease a lot of the stress off you.
3. Include Essential Details
Credit journal entries are more than just digits and currency signs, as every transaction is unique. For instance, one deal may come with a contract agreement meant to settle a particular payment method, while another transaction could simply involve a receipt and a bit of small talk with the cashier. As such, when making your entry, include a short transcription of the endeavor along with the other needed facts like price, change, and quantity.
4. Double-Check Your Work
Precision isn’t a commodity when it comes to working cash; it’s a necessity. A small irregularity in the numbers or a tiny dent in the formula will lead to the questioning of credibility, investigation of fraud, and more work for your auditing team. So, to avoid this unfortunate scenario, take a few minutes to review and double-check your work.
Businesses rely on transparent records and credible transaction documentation. From creating a journal of expenditures, requiring proofs of purchase for every deal, or ensuring that the company’s credit score doesn’t get too high, it’s a difficult task to manage a business financially—yet it has to be done. After all, the business’s greatest threat is making bad purchases that don’t solve your fundamental problems.
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