Post manual journal entries to bank/cash accounts
Remove the limitation on posting manual journal entries to bank/cash accounts. I end up spending way too much time on manual workarounds (payroll entries for example, you have to use a "bill" to replace the functionality of a journal entry). It ends up taking way more time working around the limitation than its worth. As a new user of Xero, I'm incredulous. I've worked with multiple accounting software platforms over the years, and never been exposed to such a massive limitation like this. It's almost a dealbreaker, and for some clients it certainly is. I've been looking for a viable alternative to Intuit for a while. I generally like Xero - customer service is significantly better than Intuit, and the pricing is better too. Unfortunately, if this limitation is not removed in the near future, I fear that I will have to go back to using QBO. Xero please fix so that I don't have to do that.
Hi Scott, appreciate your feedback of what you find both good and limiting when using Xero.
When you mention the need to create manual journals to bank or cash accounts are there some common situations you find yourself needing this?
For the payroll transaction I wonder if bank rules could help identify and create the transaction in Xero for you, rather than having to enter this as a bill?
Bank rules and the use of spend and receive money through reconciliation may also be able to help for other scenarios too?
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Evelyn Pederson commented
I want to add to what Scott noted. As a user of QBs (and a Controller) for many years and just now using Xero, I don't agree with not having this functionality. It is a critical function to be able to record journal entries to cash. From my example, we factor our invoices so there are various dates from when the invoice is prepared to when the invoice is factored and payment is received. I need to record journal entries upon the specific dates of flow through of the factored invoices, which require entries to cash.
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Jonathan Fox commented
I AGREE! What kind of **** is this, I hate this function. There should be a way for accountants to turn on the ability to make journal entries to a bank or cash account easily.
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Mili Cortina commented
I can`t believe that Xero hasn't thought this through better. As a CPA, I have clients that deal exclusively with cash (floats, petty cash). To be able to use Hubdoc with these accounts, they must be set as a "bank". Not being able to post to these accounts is a tremendous hassle and ineffective way of working. Accountanting firms should not have the same limitations as the general public.
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Scott Holsinger commented
Hi Kelly,
Yes, there are many situations when creating manual journal entries to cash are extremely useful. The easiest example that i can give is with recording payroll, for example:
Client uses ADP to process payroll. Total cash for payroll run is $12k, with 10k for wages (1k each for 10 employees) and 2k for payroll taxes. ADP will draft the bank account twice - 9k for the net pay to employees and 3k for tax withholdings/payroll tax.
If I could post a manual journal entry, this is all that I would need to easily record and reconcile the payroll run:
Account Debit Credit
Wages 10k
Payroll Taxes 2k
Cash 9k
Cash 3k4 lines of journal entry. 2 separate cash entries that will perfectly align with the ACH bank entries. Total time spend on this is probably 2 minutes total.
Without the ability to manual journal entry to cash account, then a "workaround" becomes necessary (bills and spend money in Xero I believe) which requires entering bills/spending money for each net paycheck (10), plus additional ones for withholdings/payroll tax (at least 3 and could be many more). Then once all those bill/pay transactions are entered (26 at least), there are many lines of cash spent that don't have a one-to-one match with the 2 ADP bank drafts of 9k and 3k. Then that adds a challenge of matching the sum of several withdrawal transactions to the sum of only 2 bank withdrawal transactions. The total time doing it this way is at least 10 times, if not more, the time involved if manual journal entries were allowed to post to cash account. And this is only with 10 employees, imagine how long it would take if there were 100? Bank rules don't help since payroll dollar can vary from one period to the next period as things change and headcount rises and falls, pay increases, etc.
This is why I can't use Xero for many of my clients. I would love to use Xero for many of my clients so please remove this limitation at the accountant user level. I do think the limitation is warranted at a basic non-accountant user level as a safeguard, but please take off the training wheels for the accountants. We (or at least I) need to move fast!
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Flora Keiller commented
Bank rules only work for accounts that have statements either through bank feeds or manual imports.
The problem is with accounts that don't have statements imported, like petty cash or till floats. Bank rules are useless and you can't post manual journals so everything needs to be done via individual spend/receive money transactions
This is so laborious and there needs to be an option to allow manual journals to be posted to bank accounts. I understand that some users may need protected from accidentally causing imbalances in the accounts but a vast number of Xero users are accountants and bookkeepers who know what they're doing and need to be able to make these entries.
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Freya Pieroz commented
I know the reason for this - it's to stop accountants from altering the balance of the bank account such that it no longer matches the bank statement, and is thus not a true and fair representation of the financial position of the business.
Having been yelled at by accountants because the bank statement didn't match the balance sheet, when the only reason it didn't match was their own journal, I support making it difficult to make adjustments that cause accounts to be unreconcilable.