Accounting Journal Entries
Fishbowl can export transactions to various accounting systems such as QuickBooks, QuickBooks Online, or Xero. Information from Fishbowl orders is then stored in the accounting system as well in the form of invoices, bills, credit memos, etc. Adjustments are also recorded in the associated accounts such as Cost of Goods Sold, Sales Retail, Inventory Asset, or Accounts Receivable. This page provides several examples of Fishbowl transactions and how they affect the accounts in the accounting system. If you have mapped Fishbowl to different accounts than the default settings, your journal entries may vary slightly from the the examples given below.
Contents
Accounting basics
Accounting transactions are recorded in two columns: Debits on the left and Credits on the right. This is sometimes visualized as a large letter T.
It is important to note that debit/credit is not necessarily the same as positive/negative. Depending on the account type, a debit can increase or decrease the account balance, as can a credit.
With double-entry accounting, the total debits will always equal the total credits. A debit to any account must be offset by one or more credits to another account. The matching totals at the bottom of these charts reflect the sum of debits and credits for the transaction, which is not the same as the order total.
Click the following links for a glossary of accounting terms or a free Accounting course.
Inventory adjustments
Cycle count up
The quantity is manually increased by 1 for an inventory item with a cost of $60.
Cycle count down
The quantity is manually decreased by 1 for an inventory item with a cost of $60.
Scrap inventory
The quantity is manually decreased by 1 by scrapping an inventory item with a cost of $60.
Add initial inventory
During initial setup, existing inventory is manually added (instead of purchased).
Sales orders
Inventory item sold
An inventory item with a cost of $60 is sold for $100.
Customer payment
A customer payment is received for an order.
Received credit return item
A customer returns an item and it is received back into inventory.
Customer payment refunded
A customer payment is refunded.
Inventory item sold and payment
An inventory item with a cost of $60 is sold for $100 and the customer immediately pays the amount due.
Non-inventory item sold
A non-inventory item with a cost of $60 is sold for $100.
Service item sold
A service item with a cost of $60 is sold for $100.
Miscellaneous item sold
A miscellaneous item with a cost of $60 is sold for $100.
Discounted item sold
A $100 inventory item is discounted and sold for $90.
Drop ship item sold
An inventory item is purchased from a vendor for $60, sold for $100, and then drop-shipped directly to the customer.
Purchase orders
Inventory item purchased
An inventory item is purchased for $60 and received into inventory.
Inventory item returned to vendor
A $60 inventory item is shipped back to the vendor.
Non-inventory item purchased
A non-inventory item is purchased for $60 and received.
Miscellaneous item purchased
A miscellaneous item is purchased for $60 and fulfilled.
Work orders
Work order without labor
If raw goods and finished goods are both assigned to the same asset account, a work order that simply converts a raw good into a finished good (no labor or other costs added) will not change the total value in the asset account, so the adjustment may not be visible in the accounting system. If raw goods and finished goods are assigned to separate accounts, then the adjustment between accounts will be visible.
Work order with labor
A work order creates a finished good by consuming a $50 raw good and a $10 labor item.
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Work order with overhead
Overhead is typically used to account for fixed costs or indirect expenses that need to be factored into the cost of a manufactured part. For example, the cost of renting a warehouse or paying administrative staff may be split across manufactured parts.
Other
Purchase order shipping items
Purchase Order shipping items can be handled in a few different ways. The shipping charge can be paid to the vendor, or the charge can be accrued and paid to the carrier. Additionally, the expense of shipping can be landed to inventory items.
Pay shipping to vendor
The shipping charge will be paid to the vendor if the shipping item was placed on the original Purchase Order, or if the shipping item was added during reconcile with the Add item to Vendor bill box checked. Accounts Payable will be increased by the shipping amount because the shipping charge will be paid to the vendor.
Accrue shipping
If the Add item to Vendor bill box is unchecked during reconcile, the shipping charge will be placed in Shipping Accrual so that it can later be paid directly to the carrier. This option is sometimes used when the customer has an account with the carrier, making it advantageous to pay the carrier directly. The next section describes the process of paying the carrier after the shipping charge has been accrued.
Pay shipping to carrier
Once the shipping charge is in the Shipping Accrual account as described above, the carrier needs to be paid. Create a new bill for the carrier in the accounting system, enter the amount to be paid, and select Shipping Accrual on the Expenses tab. When the bill is paid, the funds from the Bank Account will be used to decrease Shipping Accrual.
Land shipping
Regardless of whether the shipping charge is paid to the vendor or to the carrier, the shipping expense can optionally be included in the cost of inventory by landing the cost during Reconcile. The expense will be moved from Shipping Expense to Inventory Asset.
Handling prepayments
NOTE: Fishbowl has a module option to Send payment when order is fulfilled, that may fit the needs of some companies.
Payments in Fishbowl are typically received when a sales order is being fulfilled. However, some companies may require their customers to pay in full for the order days or weeks before it is fulfilled. If a payment is taken in Fishbowl and then exported to the accounting system before anything on the order is fulfilled, there will be a credit to Accounts Receivable, but no offsetting debit until the order is fulfilled and the invoice is exported. This will cause the Accounts Receivable balance to appear temporarily understated until the order is fulfilled. For the occasional prepayment, this is unlikely to be an issue, but for companies that consistently take prepayment, the following process may be helpful as it will prevent Accounts Receivable from being affected by prepayments. Instead, prepayment amounts will be recorded in a liability account as unearned revenue until the order has been fulfilled.
Creating a prepayment item
The following steps only need to be performed once.
- In the accounting system, open the Chart of Accounts, create a new account, set the type to Other Current Liability, and name it Advance Customer Payments or something similar.
- In Fishbowl, open the
Accounting Integration module, click the checkbox to import Accounts, and then click the Import button to the left of the checkboxes.
- In Fishbowl, open the
Part module, click the 
New button, enter Prepayment or something similar in the Number field and select Service as the Type. Create a corresponding product and then click Next.
- On the Default Accounts step of the wizard, map both the Expense and COGS accounts to the same Service account. Map the Income Account to the newly created Advance Customer Payments account.
Taking a prepayment
Once the Prepayment item has been created in Fishbowl, the following process can be used to take prepayment for an order.
- Make note of the original order total and then create a new sales order with the Prepayment item. Set the price of the Prepayment item to the total of the original order as a positive number and then receive the payment using the Quick Fulfill button.
- Once the payment has been received, add the Prepayment item to the original order and set the price to the payment amount as a negative number, making the sales order total zero. The order notes or memos could be used to record the order number associated with the payment. Click the Save button once all changes have been made.
When the payment is sent to the accounting system, it will be exported to the Advance Customer Payments account, instead of the Accounts Receivable account.
When the order is fulfilled it will export to the accounting system as a paid invoice and the Advance Customer Payments liability will be zeroed out.
NOTE: This process can be modified to meet the needs of each company. For example, both Prepayment items could be added to the original order, eliminating the need for an additional sales order. In this case, two prepayment products could also be grouped in a kit with different names or amounts. The sales order in Fishbowl would reflect the actual order total instead of zero. The process would be similar to that listed above. First, issue the order, receive the prepayment with the Payment button, right-click the positive Prepayment amount, choose Fulfill, and then click the Save button. The journal entries would be identical to those displayed above except for two additional offsetting entries that would appear in the Accounts Receivable account.
NOTE: Fishbowl has a module option to Send payment when order is fulfilled, that may fit the needs of some companies.