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I also find this frustrating. When entering YE Adjusting journals, we need to be able to code directly to the subledgers (in QBO you can do this, there is a subledger acct field on the JE line so it can tag to the correct supplier/customer, and you can't post the JE without populating that field).

It also allows you to flag the JE with a checkbox indicating it is an Adjusting entry and it appears in the "Adjusted Trial Balance" report, where you can see ALL of the adjusting JE's and verify.

I am not aware of any other general ledger software that does not let users make journal entries to cash. I have never encountered this limitation in my 30 year career in accounting. Standing out like this is not a good thing for xero , they need to eliminate this limitation.

Enable manual journal entries to post directly to the bank accounts and accounts payable.
AP: You cannot create a supplier credit like recommended if you are only recording opening balances & have no other information.
Bank Accounts: YE entries are sometimes posted to a bank account to record transactions that were unavailable at the time to rec the bank for the new fiscal year.

Wow this is crazy. I was really impressed with Xero and wanted to start my own practice sometime and focus on Xero however.... Not sure now. Seems like this system has quite a few limitations including Hubdoc. It's horrible compared to Dext.

I should have read this before signing up the subscriptions. Luckily its not too expensive and will work on QBO until XERO fix this non-sense.

Working in both Xero and QBO I'd love to see this fixed.

Xero's preferred payroll provider in the US uses bills for a workaround. The way JE come into the bank feed in QBO is much more seamless than how Gusto comes into Xero.

Xero bills must be split manually, and 2 transactions matched to the bill.

In QBO, all transactions are matched and it just needs to be approved. While this doesn't sound like a big deal, it would make things more efficient if Xero could do the same thing.

The workaround would be for Gusto or other payroll providers to only match one transaction to the bill, but this isn't how it has been working.

Or if Xero was smart enough to auto match 2 bank transactions to a single bill.

I agree that this would be very helpful not only with bank accounts but also with accounts recieveable and payable.

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.

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.

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.

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 3k

4 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!

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.

100% I have cash flowing in and out of cash accounts (loans, and transaction accounts) relating to many different people. Not keen to use wash accounts (such as suspense) but a lot easier than using "create transaction from xero bank)

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.

Agreed, it is incredible that journal entries cannot be made against bank accounts, especially when you cannot use "Spend Money" transactions between bank accounts. You can apparently do JE's in quickbooks as well as several other accounting packages I've used. This is a classic case of neutering functionality to protect the dumb.

In my use case, my mortgage payments show up from my bank account as a single payment that is the sum of principal and interest I owe for that month. If I have the loan set up as a bank account as well, my only option appears to be to process the payment as 2 transactions: a transfer to move principal from my checking account to the loan, and a spend money to move the interest from my checking account to Interest Expense. Processing this as two transactions will throw off my bank reconciliation. If journal entries were allowed on bank accounts, then I'd be able to do the transaction in a single JE.

If I set up the loan as a non-current liability, then I can process the payment as a single spend money with 2 line items, but then the loan doesn't show up on the dashboard and I can't import statements to it.

It would also be great if we could set up non-bank accounts that can be reconciled. For example, non-Bank accounts such as Petty Cash and money being held in trust for groups in a not-for-profit organisation would be a great addition.

It really is vital to be able to journal to a "bank account" - having a cash account set as a bank so transfers can be made i.e cash banked etc but there are various factors that need journalling too. We should be allowed to journal to all accounts.

to the comment below - we pick up any errant entries in the bank reconciliation when we do it end of month.... thats what that is for.

this is so stupid that you can no longer j/e to a bank account. yeah, so its "fraught with danger." Thats why I went to school - so I could avoid the danger and know how to fix it. You guys have taken something we've been doing for 5+ years and limited it and screwed us up. How is Gusto supposed to journal entry to the bank for payroll anymore? Now we have to clear the journal entries in a clearing account as an extra step? This is really dumb - I'm sorry. Back to QuickBooks for me and my clients.

Being able to journal direct to a bank account can be fraught with danger and could well throw the Reconciliation out at later date.