Accounting in Core

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Overview

To provide your company with day-to-day accounting capabilities, Core comes with various features that make it easier to keep track of accounts receivable (A/R), accounts payable (A/P), client and vendor transactions, and data integration with supported accounting programs.

The accounting tasks are typically performed by billing managers or accountants in a company but might be delegated to the admin staff as well. Before using the accounting features, we recommend specifying the default A/P (such as Bank or credit card account) and A/R accounts, which then get automatically added to your Chart of Accounts. In Core, you can set up A/R and A/P accounts in the Global Settings, Clients, Projects and Vendors screens. Time and expenses inherit these accounts from the Projects screen. You also need to decide which accounting method to use in your company: accrual or cash-based.

In an accrual-based system,

Invoices = Income

Vendor Bills = Expense

In a cash-based system,

Payments/Deposits = Income

Pay Bills or Expenses = Expense

If you are just getting started in Core and have historical balances from a manual system or another accounting system, you need to enter the opening balances to use these accounting features. To specify details and accounts for different items, you can use the manual invoice option or manually enter the opening balances in the relevant A/P and A/R modules. To enter project-specific balances, use the opening balances option in the Projects screen.

From the accounting perspective, all transactions debit and credit certain accounts. Check out this table to see how transactions affect your account balances.

Transaction Credit Debit
Creating invoices increases the Income/Sales Tax account increases the A/R account
Recording payments decreases A/R account increases Undeposited Funds/Bank/Asset account
Making deposits increases Income account decreases Undeposited Funds account increases Bank account
Transferring funds decreases Bank account increases Bank account
Writing off bad debts decreases A/R account increases Expense account
Entering vendor bills increases A/P account increases expense account
Paying vendor bills decreases Bank account decreases A/P account
Entering vendor credits decreases Expense account decreases A/P account
Entering credit card charges increases A/P account increases Expense account
Paying credit card bills decreases Bank account decreases Credit Card account decreases A/P account

Note: You can get a visual overview of this feature in Core from the General Accounting flowchart.

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