1. What will you learn in this module?

The Accounts module in ERPNext is the backbone of your company’s financial system. During this training, the NEXTFUTURE team will walk you through all key accounting flows and show how they are translated into clear, step-by-step processes inside ERPNext.

The content is written as a practical teaching guide that can be reused as an internal training reference even after the course ends.

2. Financial document flow in ERPNext – From request to journal entry

Before diving into individual screens, we need a clear view of the big picture: how financial data moves through ERPNext from the first request until the final report. You can imagine the Accounts module as a flow passing through these stages:

• Requests (Purchase Requests / Sales Orders).
• Stock Movements (Goods Received / Delivered).
• Invoices (Purchase Invoices / Sales Invoices).
• Payments (Payment Entries).
• Reports & Reconciliation (General Ledger, Statements, Bank Reconciliation, etc.).

A similar logic applies on the Sales side: Quotation / Sales Order → Delivery Note → Sales Invoice → Payment Entry. At each step, ERPNext automatically creates accounting entries and updates balances across accounts and stock.

3. Preparing the accounting environment before entering transactions

One of the most common mistakes in ERP implementations is starting with invoices and payments before the accounting foundation is properly set up. In this part, we outline what should be prepared before you start daily transactions.

3.1 Chart of Accounts

The Chart of Accounts (CoA) is the tree of main and sub-accounts that all journal entries are posted to. ERPNext ships with pre-defined CoAs that can be customized for your country and industry. NEXTFUTURE’s role is to:

• Review your company’s current account structure.
• Propose a simplified and logical structure if needed, with reporting in mind.
• Map each ERPNext document type to the correct accounts (Sales, Inventory, COGS, Expenses, etc.).

3.2 Party master data (Customers, Suppliers, Employees)

Before you start using sales and purchase invoices, you need to prepare the core master data:

• Create Customers and link each one to the right receivable account (local / foreign customers, etc.).
• Create Suppliers and link them to the appropriate payable accounts.
• Define your Bank Accounts and Cash Boxes as ledger accounts and link them to Payment Entry.
• Create key employees if you will track staff advances or employee receivables.

3.3 General accounting settings

In the initial setup session, we will review the key settings in Accounts Settings and Company, such as:

• Base company currency (e.g. JOD) and default currencies for invoices.
• Fiscal year settings and number of periods (yearly, quarterly, etc.).
• Default accounts for taxes, discounts, interest, FX differences, etc.
• Enabling Multi Currency if you trade in more than one currency.

4. Purchase cycle: From Purchase Request to Payment Entry

In this unit, you will learn how stock or service requirements are converted into complete financial documents, and how ERPNext automatically generates the related accounting entries at each step.

4.1 Steps in the Purchase cycle

1. Create a Material Request or a Purchase Order depending on your policy.
2. Physically receive the goods and record them in a Purchase Receipt (optional step).
3. Receive the supplier invoice and post it as a Purchase Invoice.
4. Pay the invoice using a Payment Entry (cash, cheque, or bank transfer).

4.2 Purchase Invoice

The Purchase Invoice is the key document that ties together the supplier, inventory, and expenses. Once submitted, ERPNext updates supplier balances, inventory, and relevant expense or asset accounts automatically.

4.2.1 Creating a new Purchase Invoice – Step-by-step

1. Go to Accounting > Accounts Payable > Purchase Invoice.
2. Click New to create a new invoice.
3. Select the Supplier and check that address and tax details are pulled correctly.
4. Set the Invoice Date and Due Date if applicable.
5. In the Items table, add materials or services:
   • Select the item from the Item master.
   • Enter quantity and rate per unit.
   • Select the warehouse where the goods will be received.
6. Add taxes and charges in the Taxes and Charges table based on your tax setup.
7. Review the totals carefully.
8. Click Save then Submit to post the invoice and create the journal entry.

4.3 Linking Purchase Receipt to Purchase Invoice

In companies that receive goods before receiving the invoice, the flow is: Purchase Receipt first, then create the Purchase Invoice from that receipt.

• Helps ensure the billed quantities match what was actually received.
• Reduces pricing and quantity errors.
• Allows you to record liabilities even before receiving the physical invoice.

4.4 Payment Entry for Purchase Invoices

After a Purchase Invoice is submitted, your company has a payable to the supplier. When paying, you create a Payment Entry (Pay) and link it to the invoice. ERPNext will then update the supplier balance and mark the invoice as paid.

5. Sales cycle: From Sales Order to Payment Entry

The Sales side is the heart of your revenue. ERPNext manages the Sales cycle using documents such as Sales Order, Delivery Note, Sales Invoice, and Payment Entry.

5.1 Steps in the Sales cycle

1. Create a Quotation (optional) or directly a Sales Order.
2. Convert the Sales Order to a Delivery Note to confirm goods have been delivered.
3. Create a Sales Invoice from the order or delivery note.
4. Record collections via Payment Entry (Receive).

5.2 Sales Invoice

Unlike Purchase Invoices, Sales Invoices represent receivables from customers and revenue for your company. When submitted, ERPNext updates customer balances, revenue accounts, and inventory.

5.2.1 Creating a Sales Invoice – Step-by-step

1. Go to Accounting > Accounts Receivable > Sales Invoice.
2. Click New and choose the Customer.
3. Set the Invoice Date and Due Date.
4. In the Items table:
   • Select items and quantities.
   • Set selling rate and Price List if applicable.
   • Select the warehouse from which stock will be delivered (if this invoice moves stock).
5. Add taxes and discounts according to your sales policy.
6. Review the grand total, then Save and Submit.

5.3 Payment Entry – Receive

When a customer pays part or all of an invoice, you create a Payment Entry (Receive) and link it to the invoice. Payment can be in cash, cheque, bank transfer, or via an online payment gateway.

During training we will highlight the difference between:

• A Payment Entry directly linked to specific invoices (straight settlement).
• An Advance payment posted before the invoice and later allocated to it.
• A general receipt to an account without invoice linkage and its impact on reports.

6. Journal Entries and accounting adjustments in ERPNext

Although most entries are created automatically from invoices and payment documents, you will always need manual Journal Entries for special adjustments such as provisions, interest, FX differences, and closing entries.

6.1 When do we use Journal Entry?

• To enter opening balances at the start of using ERPNext.
• To book provisions (doubtful debts, bonuses, etc.).
• To correct previous entries in a proper accounting way.
• To book accrued expenses or accrued income not yet invoiced.
• To post depreciation for fixed assets (if not using the automated Assets module).

6.2 Main components of Journal Entry

• Posting Date – the date when the entry affects the books.
• Reference Number / Date – external reference such as cheque or supporting document.
• Accounts table – the debit and credit lines.
• User Remark – a clear explanation for reporting and audit trail.

6.3 Example – Provision for doubtful debts

Assume the company decides to create a provision equal to 5% of a customer’s balance:

• Debit: Provision Expense (P&L).
• Credit: Provision for Doubtful Debts (liability or contra receivable account).

6.4 FX differences and revaluation

For multi-currency companies, special entries are required to handle FX differences on settlement and at period-end revaluation. In training we will discuss:

• Difference between realized Exchange Gain/Loss and Exchange Rate Revaluation.
• How these differences appear in the Income Statement.
• Best practices to reduce manual entries by leveraging ERPNext FX settings.

7. Cash management – Receipts and payments (Payment Entry)

The Payment Entry document is the bridge between invoices and your cash/bank accounts. It is the main tool to settle receivables and payables in ERPNext.

7.1 Types of Payment Entry

• Receive – money coming in from customers or other parties.
• Pay – money going out to suppliers or other parties.
• Internal Transfer – transfers between internal accounts (e.g. bank to cash, bank to bank).

7.2 Main fields in Payment Entry

• Party Type and Party (Customer, Supplier, Employee, etc.).
• Paid From (for Pay) or Paid To (for Receive).
• Currency, amount, and exchange rate if the account currency differs from the invoice currency.
• The References table where you link specific invoices to this payment.

7.3 Training scenarios with Payment Entry

7.4 Internal transfers and cash box management

Companies often transfer funds between internal accounts (bank to bank, bank to cash, etc.). Instead of manual Journal Entries, use Payment Entry – Internal Transfer:

• Paid From = source account.
• Paid To = destination account.
• No invoices are linked, but the movement appears in both ledgers and in cash/bank reports.

8. Core reports and account reconciliation

The real value of the Accounts module is not just recording transactions, but turning them into clear reports and insights. In this module we focus on a small set of core reports:

8.1 General Ledger

The General Ledger report shows all entries posted to a selected account or group of accounts within a given period, with powerful filters.

Using this report, an accountant can:

• Track every movement on a given account (sales, specific bank account, individual customer, etc.).
• Verify that account balances match what appears in the final financial statements.
• Filter by date, reference type, account, and party to narrow results.

8.2 Ordering entries inside the General Ledger

The report allows you to choose how entries are ordered in time (ascending or descending). When using Ascending Order, entries appear from oldest to newest, which is useful when reviewing the history of an account step-by-step.

8.3 Receivables and Payables reports

• Accounts Receivable: lists open customer invoices with ageing buckets (0–30, 60, 90 days, etc.).
• Accounts Payable: lists suppliers’ outstanding invoices in a similar way.
• These reports underpin collection planning and payment scheduling.

8.4 Bank reconciliation

To properly close accounting periods, you should:

• Import or manually enter bank statements.
• Match bank movements with internal ERPNext Payment Entries.
• Handle differences (bank fees, interest, unrecorded transactions) using adjustment entries.

9. Training sessions plan for the Accounts module

To turn this content from theory into practical skill, the training is divided into progressive sessions. The model below represents the typical plan used by NEXTFUTURE:

Session 1 – Basic setup and Chart of Accounts

• Review the company’s existing Chart of Accounts.
• Set up company, fiscal year, currencies, and taxes.
• Create sample customers, suppliers, and bank accounts.
• Create a first simple Journal Entry to confirm postings are correct.

Session 2 – Full Purchase cycle

• Create items and link them to inventory and accounts.
• Execute Purchase Order → Purchase Receipt → Purchase Invoice → Payment Entry.
• Review each step’s impact in the General Ledger.

Session 3 – Full Sales cycle

• Create a new customer and define price/discount policies.
• Execute Sales Order → Delivery Note → Sales Invoice → Payment Entry.
• Handle a return (Credit Note) and review its impact on inventory and receivables.

Session 4 – Adjustments and reports

• Post provisions, depreciation, and FX differences using Journal Entry.
• Review the main reports and perform account reconciliations.
• Build a simple “monthly closing checklist” for your accounting team.

10. How NEXTFUTURE supports you after the training

NEXTFUTURE’s role does not end with the last training session. Our goal is for your team to confidently run ERPNext on their own. We typically commit to:

• Documenting all scenarios practiced during training in a shareable digital guide.
• Scheduling a Q&A follow-up session about one month after go-live.
• Recommending KPIs for the finance team (closing speed, % of unsettled invoices, etc.).
• Providing further consulting whenever you need advanced reports or automation.