Add and post, or edit a manual journal

Add and post a journal to the general ledger, or edit a draft journal. If you have multiple journals, you can post them all at the same time.

Only users who have the Standard + All Reports or Adviser user role can add manual journals.

Add a manual journal

  1. In the Reports menu, select All Reports.
  2. Under Accounting, select Journal Report.
  3. Click Manual Journals.
  4. Click New Journal.

Enter the journal details

Image of main manual journal screen.

Narration

Enter a title to help you search for the journal. It'll show in the manual journal list and the Journal Report.

Default narration to journal line description

Select this to copy the journal's title into each line item description.

Date

The date that the journal transaction is posted to the general ledger (effective date).

Regardless of this date, journals are tagged with the next ID in the journal sequence when posted. Draft journals don't have an ID.

Auto Reversing Date

You can add a future reverse date to new or draft journals. The posted journal will automatically be reversed on the selected date.

You can't create reversing journals from already posted or repeating journals.

Editing the original manual journal doesn't edit the reversal. You'll need to void the reversal and create a new auto-reversing journal.

Show journal on cash basis reports

Select this to display the journals on cash-based reports (like tax returns or the Cash Summary Report).

For example, your cash basis VAT Return includes journals with a VAT component in the VAT reporting period if you select this.

Tax

Select the journal tax setting in the Amounts are field:

  • No Tax to not apply tax to each item amount.
  • Tax Exclusive to add the tax to each item amount. Make a VAT adjustment to amend the journal tax amount if needed.
  • Tax Inclusive to include the tax with each item amount. The journal shows as tax exclusive when it's saved or posted.

The tax treatment you choose and the tax rates applied affect the amounts reported in your tax return.

How does the VAT Return work?

Enter the journal line items

Description

A description for the line item. It's automatically entered if you've selected to use the default narration for the description.

Account

Select the account to assign the journal line item to. All accounts from your chart of accounts are available except Accounts Receivable, Accounts Payable, Unpaid Expense Claims and your bank accounts.

When you enter the account for the second and any subsequent item lines, Xero automatically enters the credit or debit journal balance.

You can post directly to the VAT account. Amounts coded directly to this account are included in your VAT Reconciliation but not your VAT Return.

You can add an account to your chart of accounts if a suitable one doesn't exist.

Tax Rate

The tax to apply to the line item amounts. It defaults to the tax rate assigned to the account you choose for each line item. The tax amount shown in the total depends on your selection in the 'Amounts are' field.

If you want to change the tax amount applied to a line item, you'll need to modify the account in your chart of accounts.

Tracking

If you've set up tracking and want to track individual items, select a tracking category option for each line item. The item is then included in any reports that are filtered by the tracking options you've chosen.

manual journal with tracking

You can click Add new tracking option to add another tracking option. It's added to the category and can be used for other transactions and reports.

New option dialog

If you only use tracking on one side of your journal (debit or credit), Xero creates a balance entry using the Tracking Transfers system account. This means all accounts with manual journals balance on your Balance Sheet. The actual system account balance will always be 0.00.

Debit and credit amounts

When you post your journal, Xero automatically adds the tax amount to the VAT account. Xero prompts you if the debit and credit totals don’t match.

You can use the inbuilt calculator to work out your debit and credit amounts.

File attachments

Attach files to your journal from the file library or upload a new one.

Add, move or delete item lines

Click Add a new line to add an item to your journal. Click the delete icon journal - button delete item.png beside the line item to delete it.

Use the Tab key on your keyboard to move between the lines. You can drag and drop the item lines to reorder them.

Use the grab handle to the left of the line to begin to move it.

Once you have started moving the journal line, the line will appear to float.

Save or post a journal

Save a draft journal, or save and add another straight away. Once saved, it shows on the Draft tab and can be copied, reversed, or deleted.

Post the journal or post it and add another straight away. You can post multiple journals at the same time. Once posted to the general ledger, journals show on the Posted tab. They can then be made to repeat, reversed, voided, copied, or edited.

If you post a journal and add another, the date of the posted journal is used for the new one.

Add a note

Enter a note for the journal. If you are editing a draft journal, you can see its history and any notes created for it.