Accounting

Accounting is a full featured accounting module in Dealersip to manage financial accounts of a dealership. It is a double entry accounting system. It is not a traditional voucher entry system. Vouchers are managed behind the scene. It is a form based voucher entry system where every form is individualized for a specific type of data. Before we deep dive into detail, please note following details and terminology to understand how accounting system works in Dealersip:

1. Tax codes define tax rates and their tax handling behavior. Every tax code is linked to an account. A tax code can be applicable to either sale or purchase at a time. if you have same tax rate for both of your purchases and sales, then you need two tax codes linking to a different account. 
2. Tax Code can be linked to separate tax accounts or to same tax account. Suppose you create HST 5% for purchase and HST 5% for sale, then you can link both accounts to same account e.g. HST 5%. In this case HST 5% will have entries for both taxes that you pay on purchase and taxes that you collect on sales. If you link both Hst 5% for Sale and for purchase to different accounts, then double entry system will keep entries for both accounts separate.
3. In chart of accounts, when an account is created, then it asks for tax nature. A tax nature can be Not Taxable, Taxable Payable or Taxable Receivable. Taxable Payable means that some type of purchase is recorded under this account and tax is paid to the supplier. If tax nature is Taxable Receivable, then it means tax is collected on some type of sale from the customer. if tax nature is taxable then it asks for tax code. For example If you are collecting tax on sales, then tax nature will be "Tax Collected" and linked account for tax entry may be like  "Tax Receivable 13%"
4. Dealersip keeps parties e.g. customers or suppliers etc. separate from standard voucher entry. All entries are clubbed to accounts receivable and accounts payable based on nature of the party. This avoids unnecessary clutter in financial statements. 
5. In Dealersip, a Party is a legal entity whose nature is a person by law. Parties are individuals or persons with whom a dealership conducts business. For example if  Prime Cars buys vehicles from Demo Cars, then Demo Cars becomes part of Accounts Payable for Prime Cars, and Prime cars are part of Accounts Receivables for Demo Cars.

How opening balances of parties are handled?

Because parties are not direct entities in double entry system used by Dealersip, so their opening balance is handled via voucher entry system. This ensures following things: 

1. It implements full double entry system that accepts every entry via voucher entries. 
2. Parties become part of annexures, this avoids cluttered financial statements.
3. Changing status to active or inactive does not affect opening balance entry. If there is opening balance then it will reflect in statements regardless of the party status.

When a party is created, then system automatically creates a voucher entry to add a opening balance voucher. 

Approximate release date of accounting module: 10th of June 2026