How the books work
Understand the rules behind the accounts, from two firms and one warehouse to balanced vouchers, cancellations, settlements, cheques and GST.
SalesYatra keeps full double-entry books for the publisher's two firms, Domato Book Co. and Dominions. The billing desk keeps them, the CA reads them, and every invoice a dispatch raises posts to them by itself. This page explains the rules the books follow, for anyone who uses the accounts, whether or not they are an accountant.
Who does what in the books
| Role | What they can do |
|---|---|
| Accounts (Billing) | Raise and cancel documents, record money in and out, credit returns, close a period. Everything that writes to the books. |
| Accountant (read-only) | Read every book, document and report, and export them. Change nothing: the screens don't show them buttons that write. |
| Administrator | Everything the billing desk can do |
| Sales executives and managers | See what their own schools owe, under Dues. Never the books themselves. |
Two firms, one warehouse
Each firm keeps books of its own:
- its own chart of accounts,
- its own numbering for every kind of document,
- its own bank accounts, and the one marked to print on its invoices,
- its own GSTIN, name and address, as they print on its documents,
- its own period lock.
The two firms share one warehouse and one catalogue, and bill the same schools and trade parties. A party has a separate balance with each firm. See Setup for where each firm's details are kept.
Every title belongs to one firm
Each title in the catalogue belongs to Domato Book Co. or to Dominions, and that firm bills it. So a document with both firms' books on it becomes one document per firm:
- A dispatch is the exception. The warehouse chooses which firm invoices the consignment when it records the dispatch, and that firm bills every book in it, whichever firm the catalogue lists. See Dispatch.
- Freight goes on one of the two invoices only, the one with the larger value, because it was one lorry. Billing half to each firm would put a charge on two invoices nobody agreed to.
- A credit note is one firm's. A returned book is credited by the firm whose invoice billed it, so a return raises one credit note per firm that billed its books. See Returns.
A quotation is priced before anybody decides which firm's invoice it becomes, so quotations share one numbering for both firms.
Every document posts a voucher
Every document that moves money or value owns a voucher: a set of debits and credits in its firm's books. Every balance and every report is added up from those voucher lines, and nothing stores a running balance. A party's balance, the cash and bank books, the Daybook, the trial balance, the profit and loss, the balance sheet and the GST returns therefore always agree with each other.
| Document | What it does to the books |
|---|---|
| Sale invoice | The party owes the total. The books, net of discount, go to Sales. Freight goes to Freight Charged, so the profit and loss can tell books from carriage. Any tax goes to the output GST accounts, and the rounding to Round Off. |
| Payment-In | The money goes into the bank or the cash, or into Cheques in Hand for a cheque or demand draft. Any discount allowed at payment goes to Discount Allowed. The party is credited with both. |
| Cheque cleared | The money moves out of Cheques in Hand and into the bank it was paid into. |
| Cheque bounced | The party owes again everything the payment settled, discount included. Any bounce charges are added to what they owe. |
| Credit note | A sale run backwards, through Sales Returns, so the profit and loss shows both. The party owes that much less. |
| Expense | The expense account, against the bank or cash that paid it |
| Staff claim payout | Travel & Conveyance (Staff), against the bank or cash that paid it. Staff are Domato Book Co.'s, so this is normally Domato's books, though the desk chooses the firm. |
| Transfer | Money moved between two accounts: banking the day's cash, a withdrawal, or one firm paying the other back |
| Journal | An entry the accountant asks for. It must balance, like every voucher. |
| Opening balance | What each party, bank and account stood at when the books began |
In the Daybook these appear as Sale, Payment-In, Credit Note, Expense, Contra, Journal, Opening Balance, Staff Claim, Cheque Cleared, Cheque Bounced and Inter-firm.
Balanced to the paisa
A voucher whose debits and credits differ by even a paisa is refused. It is checked when it is written, and checked again as it is saved, so the books can't hold an unbalanced entry.
Issued documents are never edited
Once a document is issued, it is never edited or deleted. If it is wrong, the desk cancels it and gives a reason, which is required.
- The number stays taken. A cancelled invoice keeps its number, and the GST return reports it as cancelled. Its PDF reads Cancelled Invoice.
- Nothing is deleted. SalesYatra posts the mirror image of every voucher the document made. The original and its reversal both stay in the Daybook, which is how an auditor sees that a bill existed and was withdrawn.
- What it paid is released. A cancelled invoice's payments go back on the party's account. A cancelled Payment-In or credit note stops paying the bills it paid.
- Stock follows only real movements. Cancelling a counter sale's invoice puts its books back on the shelf. Cancelling the invoice of a dispatched order does not, because those books did leave. That order is billed again, not un-shipped.
Some cancellations send something back to a list. A Payment-In confirmed from a rep's visit collection puts that collection back on Collections to confirm, since the money may still be real. A credit note raised for a return puts that return back on Returns to credit.
An invoice that settled a sale-or-return challan can't be cancelled. It is corrected with a credit note instead.
The date a cancellation posts on
- The period is still open. The reversal posts on the original document's date, so the two cancel out inside the same month.
- The period has been closed. The reversal posts on today's date instead, because a filed return is not reopened by a correction.
Closing a period
After the GST return for a period is filed, the desk closes that firm's books up to the last day of the period: Setup → Period lock, pick the date, then Close books up to this date. Each firm is closed separately.
From then on, nothing can be posted on or before that date in that firm's books, so nothing can be back-dated into a return already sent. SalesYatra refuses such a document, naming the firm and the date its books are closed up to. The books can be closed only up to today. Reopen lifts the lock.
What pays what
A settlement joins something owed to what paid it. Owed means an invoice, or an opening balance a party owed from before. Paid means a Payment-In, a credit note, or an advance the party paid from before.
- A Payment-In pays the oldest bills first, unless the desk says which bills it pays. The desk can't pay a bill more than it still owes, even from a screen that has gone stale.
- What a payment doesn't use stays on account, as credit for the party.
- A new invoice takes up credit already on account, oldest first: an advance paid against a proforma, or a credit note waiting for the next bill.
- A credit note raised against an invoice pays that invoice before anything older.
- A bounced cheque pays nothing. The bills it paid are owed again.
Settlements are kept per firm. A school that owes both firms has two balances, and a payment is recorded in the firm whose bills it pays.
An invoice's status
The sale invoices list shows where each invoice stands:
| Status | What it means |
|---|---|
| UNPAID | Nothing has been paid against it, and it is not yet due |
| PART PAID | Some of it is paid, and it is not yet due |
| OVERDUE | Something is still owed, and its due date has passed |
| PAID | Nothing more is owed |
| CANCELLED | Withdrawn, with its number kept |
An invoice's due date is its date plus the payment terms, such as 30 days' credit. When a bill on a rep's school goes overdue, the rep is told once, by notification and email. Nothing is sent to the school.
Cheques and demand drafts
A cheque or demand draft is only money once a bank honours it, so it sits in Cheques in Hand until it clears. The party's balance still drops the day it is received, as it did in Vyapar, and comes back only if it bounces.
| Step | Button on Cheques | What happens |
|---|---|---|
| Received | The Payment-In is recorded. The cheque is IN HAND. | |
| Paid into a bank | Deposit | Records which bank it went into. Nothing moves in the books yet. |
| Honoured | Cleared | The money moves from Cheques in Hand into that bank. |
| Dishonoured | Bounced | The whole Payment-In is put back on the party, the discount it carried too. The bills it paid are owed again. |
A cheque can bounce while it is in hand or deposited, not once it has cleared. When it bounces, the bank's charge can be recovered from the party, but only when the cheque was deposited into this firm's own bank. If the party is a school, the rep who owns it is told that the money is owed again.
Money in the other firm's bank
A school sometimes pays both firms' bills with one cheque, or pays one firm's bill into the other firm's account. The Payment-In is still recorded in the firm whose bill it pays, with the other firm's bank as where the money landed. It then posts in both firms' books:
- The billed firm is owed that money by the other firm.
- The receiving firm has the money in its bank, and owes it on.
Each firm has an account for what the other owes it, named Due from and the other firm. A transfer between the two firms' banks settles it, and is how one firm pays the other back.
Numbering
Every document takes the next number in its firm's series at the moment it is issued. Two desks issuing at the same instant queue for the number, so no number is ever drawn twice.
Each series can carry on from Vyapar. In Setup → Numbering, the desk sets the next number to the one after the last Vyapar issued. If Vyapar's last sale invoice was 26-27/22049, the next number becomes 22050, and the next invoice is 26-27/22050. A series can also start again each April.
GST
- Books are exempt. Printed books carry HSN code 4901 at 0% GST. They are reported in GSTR-1's table 8, for nil-rated and exempt supplies, less the credit notes against them, and in GSTR-3B's nil and exempt outward supplies. The GST rate stays a field on each order, because other matter may be taxed.
- Which tax. When GST applies, a sale inside the seller's own state splits it into CGST and SGST, and a sale across a state line is IGST.
- Place of supply. A buyer with a GSTIN is in the state its GSTIN says. Without one, it is the state on the party's record, and failing that, the seller's own state.
- Tax Invoice or Invoice. A firm with a GSTIN prints Tax Invoice. A firm without one prints Invoice.
- Round off. An invoice's total is rounded to the nearest rupee, as Vyapar did, and the difference is posted to Round Off.
See GST returns for the returns themselves.
The seller is copied onto each document
When an invoice is issued, SalesYatra copies the seller's name, address, GSTIN, phone and state onto it, with the bank account marked to print on invoices. A credit note copies the seller's name, address and GSTIN the same way. A later change in Setup never alters a document already issued, so it prints the same in five years, whatever has changed since.
The buyer is copied too. An invoice from an order prints the billing name, address and GSTIN the administrator approved on the order, not whatever the register says later. See Bill to and ship to.
What the books don't keep
SalesYatra keeps sales, money in, expenses and staff claims. It doesn't keep purchases: supplier bills, payments to suppliers, what the business owes its creditors, or the value of the stock.
Checking the books
Because every figure is added up from the same balanced vouchers, the trial balance always balances and a party's statement always agrees with the ledgers. If a figure looks wrong, look for the document behind it in the Daybook, not for a total to correct.
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