Transcript for:
Key Concepts in Advanced Accounting

good afternoon everyone uh depend this side uh today will'll be covering the advanced accounting topics so let me share my screen and we can start then so today we are taking Advanced accounting topics so we are going to cover all these topics like billing and transaction in multicurrency accounting dimensions and budgeting Deford revenue and expenses bank reconciliation uh closing of books we already cover last time we will cover the periodic and Perpetual inventory and GST set like India compliance app uh this is localization for India like Indian GST right so how your tax will get calculated automatically uh all these things we'll see uh in GST setup so let's start with the billing and transaction in multicurrency I hope I am Audible and my screen is visible to everyone if not please let me know uh yeah so we'll start with the uh first topic multicurrency okay so what is multicurrency transactions so so basically in multicurrency transaction the same transaction is getting get booked in two currencies okay one is your base currency that is your company currency or the currency in which you are maintaining your books of account or your doing your accountings okay so booking a same transaction in two currency okay uh is a multi-currency transaction there will be only two uh like you will book always transaction in two currency like one in base currency and one will be in foreign currency okay why to book in two currencies basically see nowadays every every or every organization has customers and suppliers out of out of their own countries as well right so for example I have a business in India I might be purchasing or I might be selling my goods to uh any foreign country customers right like I can sell to us customer I can sell to Europe customer Singapore customer right so when I sell when I sell Goods to them they are going to pay me in dollars they are not going to pay me in are like Indian rupees right because they they are not going to have a account or they are not going to have money in Indian rupees right they are going to they are going to pay in their own currency okay so in that case what I have to do I have to give them the sales invoice in the dollar okay they will if I if I give a sales invoice in my Indian rupees okay they will not understand even even they will not be able to pay me right so I I need to give them a invoice in dollars and then they will pay p in the dollar but at the same time since I'm doing a business in India I'm maintaining my books of account in Indian currency okay I submitting my accounts to government or any other body or authority that is maintained in Indian rupees right I I am filing my taxes compliances everything in Indian rupees okay so at that time I also have to book the same transaction in my books of account in my Indian rupees okay So to avoid like to avoid duplication right uh like if I I can go and create invoice in dollar say in Excel and I can share it with the customer but I need to maintain like how much dollar invoice I've created how much dollar I have received from the customer how much is the outstanding right everything I have to maintain uh in the two different uh uh software or in the two different uh uh places right so instead of that Erp gives you the uh option or feature where you can book transaction in in two currency and both the whatever values you require in whichever report getting stored in that report okay so that is called as a multicurrency transaction so till now you you must have seen in the your selling module training that you have you're creating invoice and then you're seeing the invoice in your whatever Indian rupees or dollar whatever is your base currency right so so now we'll see how we can see the same invoice in two currency okay that is multi-currency transaction so to do a multi currency transaction we need some basic Masters okay there are two masters which we need in Erp next uh okay so if you if you have only in case of multi like multi currency transaction or you have a foreign customer and supplier and you want to maintain foreign customer and supplier uh in their own currency okay in that case only multi currency uh will be applicable otherwise if you're booking even for foreign customers if you're booking uh invoices in your local currency then all this setup or all multicurrency transaction will not be applicable so let's start first we need a bank account and second we need a data's account okay so we'll go to chart of account okay uh let's use frappe Tech as a company okay in frappe Tech I have assets under assets I'll be having my bank account and I'll be having my uh receivables account right so here you will see last time when we seeing the how to create account at the time I created this data USD account so let me create one more account uh datas Europe okay data EUR the account type will be be receivables and the currency will be Euro okay data here deliberately naming it as a data's e so that I'll come to know okay this is my data's Euro account okay so likewise if you if you have a customer from multiple different countries and if you're doing building in multiple currency then you need to create multiple daters account datas Euro datas USD uh datas Australian dollar or whatever data pound right so whichever country or in whichever currency you are dealing you need to maintain data account separately okay so this is the mandatory account without this you will not be able to do your multi currency transaction okay bank account is optional if you are having bank account like if you are having a separate bank account like I have a bank account in Indian currenc Indian rupees also and I have a separate bank account for dollar separate bank account for Euro then I'll be creating bank account otherwise if you're not having separate bank account then you can do transaction in the your local bank account or Local Company currency bank account that I'll show you how to do that okay while doing a transaction for now I'm just adding One bank account um say I have a City Bank USD account okay again I'm deliberately naming it as a USD because I should come to know that this is my USD account right and the currency will be USD City bank account type and currency this is important if you're not going to select currency here by default it will take company currency okay what is your company currency right when you create a company at that time you set your company currency this is your company currency Indian rupees okay this is also called as a base currency company currency okay so if I if I'm talking base currency company currency this is similar okay and in this currency you are maintaining your books of account accounting all your day-to-day business transaction all your local purchases sales all your accounting General entry everything is happening in the INR only Okay so so two Master we created now we'll create a customer okay so let's go to customer Master Okay so this is a custom form I'll just added it in full form to show you other settings okay so the first thing whatever name you want to put I'm deliberately putting name Us customer one for better understanding okay it can be Apple Inc it can be Google in whatever right whatever is your actual customers you will name it then okay now the first setting is setting up billing currency okay again this is not mandatory but it's better you set this so that user who is doing the data entry who is creating the sales invoice need not have to select currency while doing a transactions okay so billing currency you can set here USD after that the important setting is in accounting tab you have to define the accounts default accounts right so for fra Tech okay this is my company Frapp Tech I'll just edit so what is your default account that here you need to select data USD this is very important setting okay if you're not setting this account okay and if you're trying to create multi currency transaction system will give you the message that you have not set your account uh uh default account in USD okay so this is very important in case of Europe Euro customer any European customer you will set the datas e are okay now many times customer says okay I have a customer who who is based out of various countries so for example apple is my customer so Apple Apple Inc and apple Euro two are the you you need to create two customer Master one is Apple a which which is based out of us us right and apple Europe which will be based out of any European country so you need to create two customer Masters okay and likewise if apple has a multiple uh entities like in USA in Singapore in Europe in India then you will have a four Masters four Apple customer Master Okay so this is the second important setting which which you have to do in customer Master I'll just save this okay we created the customer R this is shown in the first uh uh session in the basic accounting okay how you can import you can you can report that video first session report video okay so yeah so next step is we created the customer now we'll create the transaction and we'll see the difference and I'll again explain you the reports GL report and account receivable report okay so let's create one sales invoice okay I'm not creating sales order and delivery note but in sales order delivery note if you if you want to create sales order and delivery note for multi any foreign customer that is possible it is the same way how you create creating uh normal sales order and delivery node okay and the other things I'll show here so here what what will happen first you have to select the company if you are having multiple companies okay PR Tech I company I selected then you have to select the customer use customer one okay any workflow is it is disabled customer worklow or something is enabled Why by default it went in disabled it should have been enabled I need okay so see this this check box should not have been checked automatically maybe uh in customized form something have been changed so so in ERX all the Masters you can disable so for example if you have any Master which is of no use but you have done any transaction in that you cannot delete it right so in all the Masters you have this disabled functionality where you can disable that master so it will not come in drop downs uh in during the transactions okay so now I just enabled it so now we'll see this Us customer by default uh uh generally Masters are not said disabled automatically okay so by default whenever you create and save it gets enabled maybe workflow is applied or something uh okay so when you select a customer okay uh what happens here currency gets selected automatically this is what setting I was showing in when we created a customer if you're are not setting in customer Master right again here INR will come and then user have to C and select the USD and then the exchange rate will come okay so this is the first setting which you have to do in customer Master now here you will see the exchange rate comes automatically right now what is exchange rate so everyone is aware right when you when you when you exchange dollar with any your any with your local currency say in case of India if I exchange my uh any US dollar in India so I have a different value right if I give $1 one USD dollar to bank bank will give me 80 rupees right 80 80 Indian rupees right so that is the exchange and this exchange rates are uh getting set automatically based on exchanges and whatever fluctuation happens in the currency market right so the the now we what you're seeing the rate has came automatically right this is coming from exchanger rate.com so this is the site uh from which this rate is coming okay uh by default Erp next sites are uh uh integrated with exchangerate.com so whenever you create site on frappe Cloud It Is by default integrated with exchangerate.com via apis if you want to integrate with any other website or any other uh uh uh whatever portal is you have for exchange R you you can do that okay so those apis are available so now the current market rate is 80 rupees but I don't want market rate I I set every time daily rate or fortn nightly rate or monthly rate right so in the Erp next you have a currency exchange doc type okay the new currency exchange this is the doc type okay where you can select the date for which so for example if I if I set today okay or if I set at the 1 of March like every month see if if I'm maintaining monthly rate then I'll set the month okay if I'm setting it say weekly so then every first 8 15 22 29 I'll be creating new exchange rate and when you create a new exchange rate system takes the last one okay so till the time even if I move to April month if I'm not creating any exchange rate system will take this first March rate okay so now from USD to INR say USD to INR is 70 okay deliberately taking rounding of and we'll see if 70 is coming or there not okay so USD to INR is my exchange rate is 70 similarly for other currencies also you need to create like Euro to INR a Singapore dollar to INR or whatever whatever currencies you have right and this currency exchange rate you can maintain separate like for buying like for purchase side you can have a separate for selling side you can have a separate so that depends on the customers or their processes right many times they have a separate currency exchange rate for both the processes for buying they have a separate currency account and selling so that you can set from here so this is your currency exchange rate okay this you can maintain daily weekly fortn nightly monthly Whatever frequency you have you just have to come and create a new exchange based on your frequency okay once you create the latest currency exchange rate system will start picking that okay so now let's refresh this again try to create sales invoice okay so now let's see which currency exchange rate comes here okay now 70 K Okay the third option is changing it at manually okay many customers say I don't want Integrations I don't want to create currency exchange yet because we take current every hourly rate or every 30 minutes or whatever right this this rate fluctuates every uh very frequently right so they take very current rate like okay and they put this rate manually okay so that is also possible user can Define their own rates here okay so in Erp next you have three options one is you can integrate with whatever uh portal you want or it is by default integrated with exchang rate.com second you can create your currency exchange rate based on frequency you want and third is user defined whatever while the at the time of doing the transaction def my own exchange rate okay that is also possible the priority system will give the currency exchange rate doc type then the C exchange.com and third is of course like manually you can always overwrite okay now this is our 70 Rupees is the per dollar rate now you see if you have selected the currency here USD here you will see something different right you will see here USD now your rate and amount is in USD okay so let's take one product uh okay say 10 quantity uh at the rate of 100 okay 100 per dollar 100 per quantity so 10 * 100 $1,000 Okay so so this invoice will be of $1,000 so here you will see the dollar value and here you will see the INR value okay so this is multic currency where you are booking invoice in dollar but at the same time your INR amount also will get booked okay and you will see invoice in both the currency and the other reports again I'll show it okay now here in most of the cases taxes are not applied Okay so so you will not apply any tax here okay if tax is like export is with payment of tax then you can apply the tax here okay but generally taxes are not applied on the export transactions so it is a without tax I'm just saving $1,000 7 7,000 70,000 in okay now we'll save and submit and we'll see the GL and other accounting impacts okay so my invoice got saved you can take print which will come in US dollar which you can share with the customer okay 10 numers in dollar so now your customer will understand okay I have I have purchased this item for $1,000 and I have to pay $1,000 to uh to my supplier okay now the second thing which you can see here also you will see the dollar value INR value let's see the accounting okay accounting will happen in your base currency in your local company currency right in in so your 70 70,000 got uh debited and sales got Creed so your sales account is in your sales account is your INR account okay data account is in USD okay so this is 70,000 got booked credit now we also have a currency here so if I select currency I'll be able to see in USD this General ler entry uh USD as well okay now here sometimes what happens U when you are when you are seeing your uh say this General entry if I say after two days or after one week okay and my exchange rate has changed so this value will get change okay so uh that is not correct for profit and loss account because for profit and loss account your values remain static but that feature is currently not available in Erp next but for your balance sheet items these datas that will not change okay so but currency picture you have here we are trying to add two more columns here like you are seeing data uh debit USD and credit USD so we we are trying to we are working on that feature basically already worked but but we we stuck at the general entry level so what we are trying to do we are trying to add here two more column so two columns will show value debit and Credit in glal currency and two values will show in respective currency like whatever USD or Euro okay so you will see both the values at the same time uh but since in general entry we can select multiple currency we we are stuck like for that doctor we need to fix then we'll be able to release that feature but for now uh that that is not available able okay so this is your GL report which you can see in both the currencies okay now Al let's see the accountable report okay so first I'll select the company then party type customer party okay once you select the party then you will be able to see the uh receivable report okay so now we have created one invoice here it is showing the customer name sales invoice number okay and outstanding amount which is shown in 70,000 which should show okay so new check checkbox is added I think this check box is newly added okay because earlier when you select the party automatically this report was getting filtered on your party currency but now you have a check box in party currency that you need to check okay so now you can see the sales invoice is invoice amount was $1,000 okay outstanding amount is $1000 okay why now why my outstanding report my accountable report is shown in US dollar because when you are going to send this report to your customer right he he will understand only in dollar right like if you're are sending this report in INR he will not understand that how much he has to pay exactly in dollar right he will not going to pay in INR he's going to pay in dollar only so that's why outstandings are for outstanding reports are maintained in the party currency okay again when you are going to follow up like if you're going to give a call to the customer you are going to say okay your 1,000 is pending you not going to say your 70,000 is spending 70,000 INR is spending right so that's why your accountable report is in party currency is in US dollar okay now we'll take the payment and again we'll come and see our outstanding report okay uh any see values are not getting revalued it is just it shows the revalued for revaluation we have a transaction so just wait for our last transaction this exchange rate revaluation where we will come to know how to reevaluate uh this transactions okay so yeah so we saw the general leer report and account receivable report we'll again go to we'll again go and see the account receivable report let's first do the payment entry now say you have received the payment from the customer so what you will do you will go to payment entry add payment entry you will select the type receive you will select the company okay party type customer and party Us customer okay now when you select a party Us customer party balance is shown in dollars okay and party account is also coming in dollars now account paid to okay now I I like there are two cases generally in payment like few customers are having separate bank account in different currencies like they have a separate account in US dollar and separate account in in in that case what you will select you will select here City Bank USD okay and then you have to say like how much US dollar you have received okay and then the exchange rate and everything will come we will do this transaction but say if you are not having a separate account okay in USDA in that case whatever bank account you have like just assume this is a uh cash account you have okay so what you'll do you'll receive the money in cash okay here you will Define the dollars amount you have received here you have to Define the received amount like say 5 500 * 70 is 35,000 right so whatever whatever you have defined that you need to Define manually system will not calculate whatever exchange rate you have put whatever dollar amount you have put system will not multiply and receive amount uh put this amount because there are different charges and other things are also involved so this amount you have to Define manually okay and based on that your transaction will happen okay so here the base currency amount and your foreign currency amount both you have to Define manually when you are not having a separate bank account okay but you can continue your transaction and you can complete your transaction okay and so let's again take our City Bank USD account see $500 I have received at the rate of 70 say I not received at the rate of 70 the rate has become 75 okay now rate has become 75 so I'll be receiving 37,500 75 * by 500 so 375 37,500 I'm going to receive in INR okay so 2,500 exess I'm going to receive in INR not in dollar dollar customer is going to pay me only $500 okay but since the exchange rate has changed I'm gaining 2,500 I'm receiving excess money of 2,500 right so let's F the outstanding invoices okay so you have faed your sales invoice okay here the invoice amount was of, ,000 you're allocating like you're adjusting $500 okay now earlier what was there in the version 14 you have to click on one button like get exchange gain loss and then then system was calculating the gain loss in gain loss table but now that entry has been made automatically so on submission of this payment entry one General entry will get created and that will book 2,500 gain okay so we'll see that so now I'm just saving and submitting this okay this payment entry okay now this General entry got created automatically General entry number of 20 okay so this entry got created automatically we'll we'll come to this entry again I'll just open that payment okay so this is the payment entry we created where we took find $ at the rate of 75 okay so we received in INR 37,500 and we adjusted the invoice and System created the one General entry for gain loss booking automatically right let's see the uh ler of this entry what happened datas got credited with 37,500 your bank got debited with 37,500 okay this is the entry of payment entry whereas you will see that General entry which got booked automatically okay so here what happened your data is got debited with 2,500 okay so that means you have received it uh 37,500 and your gain loss account is got credited with 2,500 this is your income account because this is a gain right so this got credited if if we have received say uh the exchange rate was of 65 then we we would have lost 2,500 right so then in that case your party got party account was got uh credited and your exchange gain loss was debited okay so so this this entry gets Auto booked okay now in version 15 earlier it was manual like you just have to click on one button and then system was calculating the exchange gain loss and then you just have to create save and submit okay so this this is the accounting impact of both the transaction okay now here few cases are there like if you're not receiving uh say If you're receiving amount on account right so you're not aware of against which invoice customer is paid you just have uh taken this amount on account basis all right so you can take that and while doing a payment reconciliation where you are knocking of sales invoice with payment entry at that time when you do a knocking of in the payment requ canellation system will create this General entry automatically okay that is the one case with generally question comes so that you can try when you like you can what you can do instead of adjusting the sales invoice here just go just create one payment entry and go into the payment reconciliation and knock knock off both the sales invoice and payment entry and see the general entry gets created or not okay uh yeah so this is the way you can do a payment entry let's see the account receivable report okay let me select the party okay now the same party is there okay so now invoice amount was 1,000 paid amount like customer paid $500 so now outstanding is $500 okay now say you will ask customer only $500 you're not going to say customer okay you are supposed to pay 70,000 you have paid 37,500 so now pay me remaining amount that is not that's why you you receive receivable report in US dollar okay and that whatever excess amount like uh 2,500 you have received that was your exchange gain loss okay that was your exchange gain okay so now customer is still going to pay you $500 okay yeah yeah so now we'll see the exchange rate revaluation that is the last transaction and then we'll take a question and answer for multicurrency so now what is exchange rate revaluation so let's go to chart of accounts first okay now here this Bank City Bank which is in my US USD account okay which is showing that I have $500 okay at the value of 37,500 all right similarly you will see the data account as well data USD which is of $500 and 35,000 you have to still like uh because you have created when you created the invoice at the time the rate was 70 so data amount is 35,000 this is the actual value this is just a uh uh multiplication by the transaction value okay so now what happens when you close your books of account say you if you're closing your books of account monthly or quarterly right at the quarter end the rate gets changed okay say now USD rate has become say 65 or say 80 right that means if I go and exchange this $500 in the bank at the month end when the rate has become 80 I'm going to receive 40,000 not 35,000 bank will give me 40,000 right so 5,000 gain I can get right if I go and exchange but at the quarter end always you what you do you show your assets current value okay so data is my asset account similarly bank is my asset account I'll show that even this is $500 which is in bank still I have not exchange but I have to show the current value not I will show 37,500 right I have to show the current value so now say today rate has become uh 80 so this value should come 40,000 to do this exchange rate revaluation we have a doc type called exchange rate revaluation where you can do the revaluation of all your foreign currency account okay so let's add exchange rate revaluation uh maybe I need to add on 20th let me create one I'll just duplicate say today rate has become 80 on 19th of March now exchange rate do type is there you select the date okay now here you have to select the company and here you will click the gate entries okay so all your account all your account which are in your foreign currency the account currency is a foreign currency that will automatically fetched okay and that will get added in this table okay now here what system is showing City Bank USD account new exchange rate is 80 okay the current balance in your local currency okay what will be your new balance okay so now 37,500 will become 40,000 and 35,000 will become 40,000 so what is the gain so 2,500 and 5,000 the total 7,500 gain you are booking okay this is not actually you are going and exchanging or you are receiving money from customer okay but at the quarter end or at the month end to show your current value of your assets you will do this exchange rate Revolution and next month you will either reverse this entry or like whatever process you are following you can do that okay or you can continue and then again in the next month you will uh you will do that uh uh next month entry okay so this entries recurring entry every month quarter or year end generally uh like listed companies and other are doing quarter end uh and uh like other unlisted companies I think does at at the end of the year only okay so I'll just save and submit this entry and we'll see the impact okay so we have to set this unrealized uh accounting company master so here unrealized exchange gain loss account is there where I'll just set one account okay only after setting this currency exchange gin account in company in default okay you will see this uh option create General entry okay so after saving or submitting exchange rate revaluation you need to create a general entry okay your general entry will get created automatically you will see the link here you can open that entry and you can see the uh accounting M so what system will do system will uh debit and credit the credit the gain account and all debit credit will happen and you will be able to see you just have to submit this transaction okay so now this my accounting got book like exchange rate revaluation happened okay and we can see the ler as well okay your City bank account now new balance is 40,000 okay the current balance got credited similarly for daters account and your exchange gain loss account got credited because 7,500 is your income is your gain okay so now see this chart of account okay data's USD now it is showing 40,000 the dollar value is still 500 there is no change okay only INR value okay because the account is maintained in dollar only but since you have to show the corresponding irr value here you can see the 40,000 as your IR value okay similarly bank will also show $40,000 doll is 500 only in my bank account okay now either you will continue this entry or next month you will revise this entry so it depends on the customer to customer okay so yeah that is ex revaluation uh this is how you can do the multicurrency transactions so any questions related to multicurrency you can unmute and ask uh or we yeah table means this currency exchanger doc type is there now where where you see all your exchange rates currency exchange do type is there yeah you will see all the and this is history this is going to be uh there in system it is not going to be deleted or removed so all history you can see this is a doc type you can pull it pull the report as well whatever you want daily exchange you just have to create daily exchange dat that is what I explained uh see you have every day you have to come and create you have to select the date and then you have to create the current section it okay so that it will maintain daily so what I explained is in Erp next there are three ways one is system can be integrated with whatever uh apis you want or already integrated with exchang rate.com so if you're are not creating this currency exchange rate system will fetch the value from exchange rate.com okay if you want to maintain daily exchange rate you just have to come and create this Bas daily basis just duplicate and just change the date and just change the rate and save it so your daily exchange rate will be maintain in the uh Erp next okay any other queries yeah so let's move to next topic after each and every topic we'll be taking uh questions Okay so next topic is accounting Dimension and budget okay so what is accounting Dimension uh it is basically a uh option to create uh say say one you have a cost centers okay that is also one kind of accounting Dimension also we have a project but many times you want like you don't want to uh create multiple accounts in chart of account okay but you want Mis for every Dimensions say every Branch every plant every unit okay so those are your accounting dimension for which you want to see your profitability expenses incomes all these things so in Erp next you can open three kind of accounting Dimensions two are by default one is a custom so I'll explain that that so accounting dimensions are used in Erp next to keep your chart of account neat and clean okay so many times we have seen right uh in other accounting software also you what what you generally do say in expense I have a uh some expenses say I have a administrative expenses or I have a telephone expenses or whatever right so if I have a say four branches and I want to see administrative expenses for each branch so generally what people do they create four account like administrative with the branch name Branch one branch two Branch three branch four so they will add four account in administrator and while booking the transaction they will select the respective account but here in Erp next what you can do you can open your accounting Dimension okay either you can open customize or you can use cost center okay and instead of creating four accounts you can create four cost centers okay and while doing a transaction you can select the against which branch you have done the expenses okay and then when you see reports like GL report uh profit and loss report or a balance sheet report you can filter the uh reports based on your accounting Dimension okay that I'll create I'll show it how to do that okay that is a part I'm just explaining now what is the use of accounting Dimension okay so let's create uh accounting Dimension first we'll use the cost C and then we'll also try to create custom accounting Dimension like Branch or plant or whatever we want so in Erp next by default for you're logged in with some other IDE I think s system manager no no uh I just given a permission just not refresh so that as well so I already have a system manager this okay okay so now uh here we can see the cost center in preview here you need to select company now cost center is company wise okay so here we are not seeing any new cost center right we have not created any cost center so let's create one cost center this is one accounting Dimension so let's create one marketing expenses okay you can also create child group uh okay you can if you if you want to create group and then child sub child or whatever you can use this functionality and you can create I'll just added marketing expenses okay under Frapp Tech directly okay this is one type of accounting Dimension another we have a project where you have a project uh against project you are purchasing against project you are doing expenses and income so you can create project okay and while doing a transaction you can select the project the third option is creating custom accounting Dimension okay so I'll show it and there is no limit of creating custom accounting Dimension you can create any number of Uh custom accounting Dimension how to create that is I'm showing so we have a accounting Diamond doc type okay you can go here add accounting Dimension and here you can select the doc type types okay so say Branch this doc type is already created in ERX this branch is used in HR module right so you can select this Branch okay and use this as a accounting Dimension now you can refer this doc type and open one new accounting Dimension as well so what I'm trying to say here uh go to Doc type list open this doc type and create similar one more doc type whatever name you want say I want uh say I want plant plant unit uh them as my accounting Dimension right so just go here add doc type name whatever you want say plant I want okay module you can select accounts okay now you can for this and try to create similar uh uh way okay now in settings we'll just set uh I'll just add then data field is so label will be plant okay so I'm similarly creating like Branch you can refer that so branch is my okay so branch is my data field okay I can create that okay and I can uh create that field in settings you can refer whatever settings are there you can do the same settings uh just for naming rule we need a setting just just copy field Branch okay so here I'll what I'll put by name I'll put the plant okay same because I want to create same as a uh name okay so the the S simple settings are there just I created what doc type okay I can this one doc type I created and I can create the BR plant list right uh this is a basic setting of plant one plant two plant three right likewise you will create your list plan two okay similar like we have a branch list right here so you can create Delhi Mumbai Pune as your branch right so similarly what I did I just created plant doc type and I added my plant list now now what I'll do I'll go in accounting Dimension okay I'll add the accounting Dimension here I have to select that do type plant okay you'll select the doc type you can add you can select the companies for which it is applicable okay uh whatever default Dimension you want to set you can set uh if you're setting this now just make sure while doing a transaction you you ask user to select to change that otherwise don't select here default Dimension okay just keep it because if you're using user permission and other things you will face issues okay mandatory for balance sheet item and mandatory for profit loss item if you check this box what system will do while doing any entries like purchase sales General entry payment entry wherever accounting impact goes system will ask user to select the accounting Dimension without selecting the accounting Dimension system will not allow to submit that transaction okay balance sheet mandatory for balance sheet items means say if I'm doing a payment entry uh or general entry say okay where I'm selecting my expense account as a debit and credit my cash account okay cash is my balance sheet account right so if I if I make this mandatory I need to Define for transaction where where all my balance sheet accounts are there okay so one more example if I if I say debit the customer and credit my cash account or uh bank account in that case also it will ask the accounting Dimension because both the account are balance sheet account if I uncheck this system will not ask the accounting Dimension okay so I'm not right now making it as a mandatory because you when your other sessions will happen it will ask every time to select this so I'm just not marking it as a mandatory I'm clicking on Save now on creation of save system takes some time to create this accounting dimension in all the doc types okay so if you are having multi-e data or one year or two year data just wait for some time this process to complete okay if you're breaking this process in between then you in the all the doctors the field will will not get added and you will get the error message and you will not see those fields okay so just make sure you are adding uh you're giving enough time system to create this Fields okay and this accounting Dimension you can start you can Implement any time it's not like at the year end or at in the mid you can Implement any time you want okay now let's see what happened after adding this accounting di I'm just going on sales invoice screen just adding the sales invoice okay okay now just see the accounting Dimension section here you will see branch and plant because two accounting Dimension I have created right one more accounting Dimension was created last during last session today we created the plant now here in drop down you will see plant one plant two okay so there is no limit of creating accounting dimension in Erp as many as you want based on your Mis requirement you can create okay by default in all the doc types you will see cost center and project two accounting Dimensions okay these two are customized branch and plant okay so that's why when you create accounting Dimension it takes some time because it goes and addit adds the this field in all the doc types okay now let's see the transactions and other things so uh we created the accounting Dimension we saw how to create create uh one default uh accounting Dimension custom accounting Dimension now we'll create budget and then we'll do the transaction because we'll cover both the topics together okay so let's use the budget so what is budget so budgets are basically at the start of the Year okay every organization plans their budgets right how much expenses they will do for uh each of their activities say for marketing activity or any admin exppress or anything right so they create budget in the system and they want to ensure or they want to control this budget should not be get exceeded so for example I have a one lakh rupees of budget for my marketing expenses I just want to ensure that my users should not use the more than one lakh rupees for marketing activities right how I can control that I can create budget and I can set the budget and when the any accounting transaction will happen right the expenses will get booked at that time if the one lakh is Pro system will not allow them to submit that transaction right so similarly in Erp next you can create budget you can also control that budget and you can based on configuration you can set like do if you want to stop user to uh create any transaction above the budget okay so all these settings are there so we'll see how to use budget in Erp next so budget do is there in Erp next okay doc type name is budget where you can go and add the budget now budget is ADD budget you can add against all three cost centers uh all three accounting Dimensions okay you can add budget against cost center against project against your custom accounting Dimension as well okay so that's why you are seeing here cost center project branch and plan okay by default cost center and project is there but if you have open a custom accounting Dimension against that also you can set the budget so I want to set my administrative expenses budget Branch wise or any expenses plant wi that I can do okay so so let's set the budget for cost center okay here again company you have to select okay cost center you have to select say I'm marketing expenses I'm selecting your marketing expenses oh and budget I'm setting for cost center okay physical year is very important if you are not selecting proper physical year then your budget will not get triggered okay your budget will not get uh your transaction you will not see the trigger of that if you're crossing the budget okay so many times we have seen users are tagging here wrong Financial year and they are doing transaction in the current Financial year and then they are saying okay system is not triggering the budget or not giving us any validation message that I'm exceeding the budget right so that's why your physical year selection is very important for each year you will create a separate budget okay now we also have a option of money distribution okay so this budget is for whole financial year 2023 to 2024 April to March for 12 months we have this budget but I want to distribute it monthly and I want to also control it monthly right so then what you can do you can create a distribution as you want I'll just click on create new monthly distribution where I'll just name it as a monthly equal okay this is monthly equal whatever name I want to give since I'm setting every month equally I'm giving name monthly equal okay for each month it is for all 12 months it should be 100% so that's why it is 8.33 8.33 so it will become 100 I can also in J mon I have a season what I can do I can do 20% allocation for J month P month I have 10 March month say I I don't have any season I don't want to do any marketing you can set zero as well okay so likewise based on your month season or your quarter season you can set that budget so that budget will be applied based on your uh uh Seasons yeah I'm Distributing monthly equal every month equal because so monthly equal we selected now control this two check box we'll see later first see the applicable on booking of actual expenses okay just I'm enabling this but for I'll explain this later applicable on booking of actual experences here since it is a material request your budget will trigger will not trigger based on accounting impacts okay because M on material request and on purchase order there is no accounting impact right so that's why I said I'll explain this later once I explain the actual budget and how it is getting triggered and then we'll again come here and we'll see okay so applicable on booking of actual expenses okay now what you want this is your applying budget here what action you want what system to do system to stop user to complete that transaction or you want system just to give warning message and allow user to submit the transaction or system just want ignore let the user uh complete the transaction you will just track those budgets in your report so in case of ignore there will be no validation message no stopping okay in warning you will get a validation message to user the pop-up message will come that you are exceeding your budget but still system will allow to submit the transaction and in case of stop system will not allow to submit the transaction if budget is exceeding okay similarly you have actions for your monthly budg budgets okay so now here we have done the monthly distribution say okay now say for this year I have set the 12,000 as a budget okay and on the first month I'm doing the 2,000 Rupees as my expenses system will not allow because for each month the distribution is monthly right 1,000 for each month and if I do a 2,000 Rupees system will not allow okay see on the first month I have not done any expenses on the second month I have done the 2,000 Rupees expenses system will allow because this is accumulated okay so last month whatever is left it will get get accumulated it will get added to next month and system will allow so this monthly budget is on accumulated basis okay again here same similar you have warning stop and validation the this section ask you to set account against which account this is going to be booked so again here I'm selecting marketing expenses this is my chart of account account okay in chart of account you have a account that account is coming here here I'll be having my marketing expenses this account for this account I'm setting the budget okay this is marketing expens this is my cost center this is another Master this is my account okay now here let's set the budget for 1ak 20,000 for whole year okay this 1 lak 120,000 is for 2023 to 24 whole year okay let's save and submit this is submittable Doc type so whenever you want to do edit modification you have to cancel and amend okay system will not allow you to uh uh do any changes you have to first cancel and then submit so this is a submittable document okay now we created the budget let's see how it gets triggered so now we created the budget uh we created the budget we'll tag the uh cost centers and other thing in item Master I'll show that as well and then we'll create the transactions okay so now let's go to one of the item master or instead that let's create one item master okay now the item name is say advertisement expenses fine the item group I set Services okay I'll not put this as a maintenance stock because this is my service item okay so this is not non inventory item okay this is not stock item or inventory item so that's why this is unchecked okay and whatever like unit of measurement and other things you want to set you can set the important thing is in accounting tab I'll just click on Save and then again add it okay in the accounting tab okay so this is this should have been not labeled as a Deford accounting okay I I'll get this fixed but yeah so just in the Deford accounting section uh in the accounting tab in the Deford accounting section we can set the defaults right so we can set the all the defaults related to our companies so what I'll do I'll add my company fra Tech okay yeah you need to so these are the your default settings for item Master right where you can see the default cost centers default expense account okay default provisional account all these default settings you will you will be able to set here okay so lot of time you'll see uh different validation message or customer ask you to okay I want to set my default expense account on after selecting item I don't want to select the account while doing a data entry in that case you can suggest this default expense account so our default uh for this advertisement item our cost center is marketing expenses and our uh account default account in which the expense will get booked is my marketing expenses so I'm just showing you your you need to set here or while doing a transaction it's better to set here so that while doing a transaction if user is missing to select the uh cost center and expense account your budget will not get triggered okay so if you're maintaining separate items for each of the expenses then it's better to set the cost center and expense account in item Master if you have using common item like just a marketing expense is the item name and then whatever advertisement and other expenses you are doing every time you are selecting different item uh different accounts then while doing a transaction you need to select this cost center and account I'll show that as well okay so I set the cost center I set the default expense account okay I'll just close this and I'll save it okay so this is simple setting in item Master where you can tag the cost center and expense account in item master so that every time user need not have to select now let's create transactions okay so let's book some expenses through purchase invoice same will work for General entry as well but I'm right now using purchase invoice uh I'll just change the date uh because this is a month this is the end of the year right 19th March so I'll just book this expenses say in the say on the December okay prer te supplier any supplier you can take here let's take the advertisement expenses okay now let's put here uh one L okay because from April to December there will be 9 months so 90,000 is a monthly accumulated total so that's that's why I'm taking one lakh okay so that we'll see that that validation message as well here on edit you will see the expense account got selected automatically from item Master okay if you're not setting it in item Master then user need to select here right account okay and similarly in accounting Dimension this cost center will get selected automatically if user is not like if you're not setting in item Master then user need to select this uh uh correctly and also you can make this field mandatory if you if you are not setting an item Master then on the custom form you can make this field mandatory okay let's also set this plant okay so plant either you can set here okay all accounting D Dimensions you can set in the detail table like in the child table of item Masters or you can set here as well okay if you're setting at parent level okay whatever you are selecting at parent level that will be applied for all the debit and credits okay all the debit credits of GL entry okay so plant one and Mumbai Branch I'm selecting right now to custom accounting Dimension cost center marketing expenses already set here in the item Master okay so we'll see the difference of child and parent okay that's why just selecting marketing expenses at item level now just saving and submitting this transaction okay e so in our last session right we did this period closing voucher so I'll just this was for India this waser Tech yeah I'll just close cancel this entry this is our entry which is is in drop mode Let's try to S submit okay now entry got submitted you got a message that accumulated monthly budget for accounting marketing uh uh marketing expense account cost center is 90,000 right from April to December the every month 10 10,000 so 90,000 but I did the 1 L expenses right so it exceeded by 10,000 but since I have set in budget that I just want warning message I don't want user to stop that transaction right so it given me a warning message and system allowed me to submit the transaction okay now let's see the GL as well okay creditor got credited because I booked expenses and my expenses account got debited this is the correct entry and here in accounting Dimension right here in Branch you will see Mumbai Mumbai plant one plant one since marketing we selected at child level only I can see against expense account only okay not seeing here it is blank okay so and what are the benefits like you can filter this GL report based on your accounting Dimensions I just want to see the Mumbai expenses only Mumbai entries will come okay so this accounting Dimension filter is available in all the financial RS so that's why what I was trying to explain okay we'll do one more transaction uh from General entry so I'm booking expenses through General entry okay what will happen here I'll select the date uh my marketing expense account account will come here so now I am doing 30,000 okay I draw uh say cash okay now here what I'm doing just booking my expense through General entry here in the accounting Dimension I need to select the correct accounting Dimensions okay so cost center I need to select marketing okay cost center has to select marketing and the account is already marketing expenses okay now let's see this system is allows us to save and submit this transaction or because this is crossing our budget right okay so system is not not allowing me to submit the general entry what it is saying that you are exceeding by 10,000 like my budget is 1ak 120,000 I'm booking uh 30,000 we have already booked uh one expense for one lakh for the same marketing expenses right so now here what I'll do I'll edit this I'll also set here some plant okay Plant say plant two and branch Delhi okay and I'll just reducing the expenses so that system allows us to uh complete the transaction 10,000 okay uh yeah just saving and submitting okay just let's see the GL report okay just removing this filter of General voucher now whole GL report I can see right I can see all the transaction between this period okay all transaction related to this period will come now I just want to see expenses of my Mumbai Branch okay only this transaction came just now we booked right 1 lakh rupes only this will come not other transaction so you can filter data based on your requirement okay here multi selection is also applied okay all your accounting Dimensions will come here I want to see plantwise you can see the plantwise okay all all these filters are available in all the reports okay so now like we we created budget we saw how uh on booking of expenses right your budget gets trigger uh one more thing which I wanted to show you here like sometimes you want budget to be triggered for inventory items right so this is our budget right these two applicable on material request and applicable on purchase order now when you have Perpetual accounting system on purchase of inventory items right where you have a maintain checkbox tick in item Master right for that item when you do a purchase at the time expenses are not getting B right when you consume that entry or when you sell that entry uh item at that at that time your uh expenses gets booked right for these items maintain stock items right for these items which is your inventory item but I want also make to sure that this inventory item should also not get procured uh above the budget right I have a budget for All the items for my manufacturing okay maybe I have a consumables for that also I maintaining inventory but I just want to control expenses uh to purchase those consumables right or any stationary items or whatever so in that case what you have to do if you want to budget to trigger for your inventory items during material request and purchase order only okay what you have to do you have to make sure that you are setting default accounts which you have tagged in budget in the item master so this is a company I selected okay what I'll do I'll just set that marketing expense and marketing no accounting impact nothing is going to get going in this uh account okay whatever you will select at the time of transaction but since I want uh budget to be triggered I just have to set the default expense account this either you can set in item master or while doing a transaction user need to select okay but it's easy to set in item Master that's why I'm uh uh saving here okay now let's see our budget is getting triggered on purchase order or not we'll purchase this MacBook M3 okay now purchase order is a doc type where there is no accounting impact right there is whatever you do there will be no accounting Empire you can select any supplier okay now here I'm selecting the MacBook M3 okay say required quantity is 100 and rate is 5,000 okay so this order is of 5 lakhs this is anyway crossing our budget right but let's see this is getting triggered or not how it will get triggered because in item we have set the accounting Dimension cost center and our expense account right okay so I'll just save and try to submit this purchase order system will not allow me to submit the purchase order even if there is no accounting impact but system is checking the budget in the cost center okay in the budget and then giving me that you're not allowed so many times customer want I just want to control my expenses at the time of order generation or at the time when the request gets generated from the Departments right so you can use this functionality to control budgets at the time of request only okay so this is how you can use this uh uh budget for H yeah this two check boxes applicable on material request applicable on purchase okay for that I I shown the setting that you you need to set the default account uh for uh in the item Master for inventory items okay let's quickly see the report uh of uh profit and loss just see okay profit and loss adjustment account we selecting the company e so I think you need to check in this here sorry need to check in I yeah I'm just setting uh maybe it might be because of system defs Bally year put is there Yeah so basically what I was trying to show here is like every reports you can use this uh filters account Dimension and all so if I want to see profit and loss Branch wise you can see so there are lot of use cases right where company has a legal one legal entity and multiple branches so many times we suggest them a solution of like creating separate companies for each branch you can also try using accounting Dimension instead of creating separate companies for each branch you can create a branches and then um uh create all these branches and while doing a transaction ask user to select the branch okay you can also set user permission for branches and all these things you can do so that in the one company only all the uh all the transactions will happen and then consolidation and other things is not required okay so so we have implemented multiple cases where we have used the accounting Dimension customer was using uh customer was using 10 or 10 or 15 branches or units and they are doing in one company only so we have two three cases where we have implemented but of course uh you need to test all the cases like you have many times you have cases like where the payment is received on the ho how it the adjustment will happen so all these use cases need to be uh taken care and then of course you can use the accounting dimensions for filtering Branch choice and this filters is available in all the GL report like profit and loss balance sheet GL report everywhere in all the financial reports okay uh let's see the budget variance report okay company I'm selecting Frapp Tech okay so our marketing expenses cost center for which we have set the budget it was monthly distributed so for each each month it was 10,000 right it will divide by 8.33 so 9998 will come directly we have done here we can see the monthly or yearly whatever view we want okay so every month 10,000 was the budget and what is the actual expense so this was the budget and this was the actual if you have not used any budget it will show it in green if you have overused the budget it will show in red okay so likewise till December we have not used budget in the December directly we did the 90,000 uh 1 lakh rupees transaction so budget got extended with the 90,000 right and still we have a 3 months budget 9,000 9,000 so that we can do a transaction okay so this is your budget variance report which comes based on your frequency required monthly quarterly half yearly okay and you can you can do all the filters and you can also see the cumulative budget okay so here it was not adding last month budget if I have not consumed right so if I want to see the cumulative system will also show you the cumulative values okay so this is like first month I have not used budget it will become 20s then second month third month likewise I have my budget right so I was having 90,000 till uh no December and I I did the one lakh so 10,000 is my used okay so this is your budget VAR report yeah so any questions on in accounting Dimension or budget module uh let's take the uh if if there is no questions we can uh we'll take the five minutes break and then we'll start with the defer Revenue expense and we have to like finish this uh four topics basically so yeah so just 5 minutes break quickly uh it's 4:3 so we'll start at 410 okay uh so it is becoming 41 will start e e e e e e e e e e e yeah so next topic is defer revenue and expenses so what is Deford accounting so the definition is basically you are deferring your booking of incomes and expenses over a period of time that is the uh basic definition of Deford accounting but uh I'll explain more see uh when you are like generally what happens when you are in Service Company right when you're are doing a Services of various uh um say you are giving service of IT service or any other services right you generally do a contract for whole year or for multiple years and you get advances from customers uh uh in the when you get a order right when your contract happen when you get order at the time generally you get a monthly uh half yearly or yearly advances right but you also have a Clauses or you also have a conditions that if customer don't like your service you will refund the money okay and that is also the customer puts those conditions right if they don't want to continue they will they will take that money back from you right so if you have such business when you are receiving advances from customer and you have a liability to either give a service or money back to customer in such a case if you are booking those uh advances as your income then it is a wrong reporting of to your investors to your whoever shareholders investors and other community is there right to government and everybody because you have received advance but you have to give service and service which you have committed or with which customer should be satisfied and you cannot show it as a income on the first month only or on the day of order you have received because that delivery will happen over a period of time like say for next 6 months or one year right so that's why in accounting uh there is a concept called Deford accounting where you just book you book invoices but you not hitting directly your income accounts you are hitting your liability accounts okay so that you are not showing it as your income in profit and loss you are showing it as your liability in L balance sheet so that process is called as a Deford Accounting in Erp next we can do this Deford accounting automatically by basic configurations okay this is mandatory for listed companies uh like in India also it is mandatory for all the listed companies to follow this Deford accounting all IT company especially right they they get huge contracts uh huge orders but they cannot show them as their income because the if they show it as income their revenues will go up and their shares value will go up right and when they lose that contract by then it is a wrong representation to investors and uh sh shareholders right so in Erp we can do this accounting Deford accounting uh automatically as well so I'll show the complete configuration and how to do it okay so first thing you have to do you have to go in account setting where we have a Deford accounting setting section okay this section is for Deford accounting okay here you have a multiple uh settings like this setting booked effort entry is based on days or month okay so what me what does that means if you're setting based on days okay so your contract will be divided based on month's days okay so say if I have done a contract of 1 L 20,000 for whole year then for April month the value will be different for five month the value will be different and March month the April value will be different so 1ak 120,000 will be divided by 365 multip by days right so in five month I have 29 days in April month I have 30 days in March month I have 31 days but if I keep it as a based on months then it will simply divide equally for all the months so 10,000 each each month irrespective of days in the month okay now the other settings are there automatically process defer accounting entry do you want system to automatically process or you want to process every month there are some entries which you need to post in certain frequency that we'll come to know when we'll do uh NE other transactions right after understanding this setting booked effort entries via General entries so you want to book this Auto entries via General entry or you just want a GL impact so if you are set if you're checking this book there will be separate General entry will be created okay submit General entry you want system to directly submit those General entries or you want system to create General entries in draft mode and then you will check those General entries and you will submit it right so for if you if you want system to submit then you will check this check box okay after doing this setting this is a basic setting which you have to do in account settings to enable your Deford Accounting in your company okay first step now we'll create accounts in chart of account okay so you need to create certain accounts in chart of account right because now when you're booking a sales invoice you are not showing it is in your income right you are not hitting your sales account instead of that you are hitting your liability account so that liability account you need to create in your chart of account so let's go to chart of account select the company okay now we'll see the sales side okay so sales s side is your liability okay similarly you can do the for expense side so for example if you're are giving yearly contracts to your uh uh your air condition maintainer right who is maintaining your air condition you are giving yearly advances in that case you will create accoun in asset because that expense is still you are going to receive that service and if you're going to terminate your contract you're going to receive cash from the your vendor right so that account will be in asset so your expense side accounts get created in asset your saleside account gets created at in liability so in current liability uh I'll just create one group this is the Deford Revenue uh account type I'll just selecting and I'm just creating a group under group we'll create the separate account so that we'll see here so def revenue is in my group under that I'll add the defer so if you're facing any slowness in chart of account now there is a new setting in account setting you can use that here you can uncheck this show balances in so what happens when you open a chart of account system takes time to calculate all the balances of account right and if you also don't want to show your balances to any user you can use this setting this was not this is just brought in version uh I think I think version 14 only uh we have brought this feature okay so if you check this system will not show these balances and also your chart of account will become faster because system will not calculate all these balances so let's quickly go to liability current liability here here ADD child okay so here account type will be uh account type I think no no need to set the account type because this is our income account so just I'm not setting any account type okay so Deford income company okay currency system will take automatically I'll just created the account okay so this is my Deford income account yeah so we created the account in chart of account okay so what we did we created one default income account in the liability okay similarly for expense you will create a a Deford expense account in asset okay now we'll create item Master here we'll need a separate item master so we'll create one item Master we already must be having this let's create okay so say item name whatever you want to give you can give a Consulting service or annual maintenance service or whatever right you can give the name see Consulting Services is your item Master which will be a non- inventory item maintenance stock will be unchecked okay in the accounting section here you need to basically first in the sales tab you just unable this I'll just save it and then okay this check box is there enable Deford Revenue you just need to enable this okay and number of months so say this service I'm giving for January for 12 months so I'll just set the 12 months Okay add in accounting section here I'll just set this here I'll set my default revenue account which I created right just now so this is my defa income account which is my I created in liability so this setting in uh here in the Deford section you need to set your account and in the sales site you need to enable this enable Deford Revenue similar for expense item you need to enable uh Deford in the purchasing side okay so this I enabled now I'll just save okay now let's start booking the uh expenses uh sales invo sorry okay so what we did we created the chart item in accoun in chart of account Master we created the separate item Master where we have to do some settings okay now we'll see and create the sales invoice okay I'll just change the date because we have to see the multiple interest so let's see let's take the say on 1st of April okay 1st of April 2023 and the start of the year I got this it's not necessary every entry has to be happen on start of the Year anytime it can happen today tomorrow anytime whenever you got order you will book that entry but just to see multiple entes I'm just selecting start of the month or if you want I'll take the uh 1 May okay so so I just stay otherwise it will give us the message uh any company you can select customer okay company selected data selected okay now here let's take our uh Consulting service okay so this contract you got for 12 LS okay and in the item edit table here you will see your accounting data details so this sales account is there which is my income account okay and here you will see the in the default Revenue section enable default Revenue uh this should have been got automatically selected do we have yeah so see this is another item this this might be we just have created this item I think so yeah so in the details section this information will get filled automatically okay on the selection of item so there was already one Consulting service was item I selected the wrong item so when you select this the income account will flow from item master and your service start dat and end it will flow based on setting in the item Master because this item we are generally selling it for 12 months so this is my 12 months uh service period okay so which will start from 1st May to 1st May 2024 okay this system patches automatically okay this is your normal sales account against which income should have been booked right so let's see now what is the general entry happen what is the general entry okay with tax without text whatever you want to do transaction you can do okay now our sales invoice got booked see the general leer impact here your data got booked with 14 60,000 like including your defer uh your service amount plus taxes so your you have debuted the customer okay against which whatever cash payment you will receive you will do the payment entry you will knock it off okay these are the tax account against which you need to pay tax to government so your output tax account got credited which is your liability and Deford income account this is your liability account right which got credited with 12 lakhs so here system has not credited sales right which is your income account here s system has credited Deford income account if I create any other invoice like any invoice for another item here sales will come but instead of that here what system has done defered income this is my liability account right so system has it like system has increased my liability still my revenue is not booked okay now what will happen every month start of the month or end of the month Whatever frequency you are following what company do they process their Deford accounting okay this and entry either can be done manually or can be done automatically okay which I shown in the account setting so if you if you're setting this automatically every month system will run one General uh uh one batch and it will create all the general entries okay in the midnight it happens so now since we have created entry now either we can see tomorrow one entry we'll see the tomorrow but now since we have to see now I'll process it manually okay so you have to click on process Deford accounting okay here you have to again select the company preper Tech type income or expense okay account okay posting date you can select to days no issue service start time okay so now I'm selecting here say for May month okay 1st May to 31st may only one month I'm right now booking okay so we have got the order on 1st of May we have booked that sales invoice on the 1st of May now we want to book our income for 1st May to 31st May for this month it can be a quarter it can be a half year but it it generally we have seen it is generally a Max to quarter okay so generally companies book for one quarter like uh April to June okay likewise for four quarters they book their all their incomes okay the system is G giving me the validation message that manual entry cannot be create disable automatic entry uh in the setting so I'll just disable this okay here in connection you'll you're not seeing any general entries right now okay but I'll after processing this you'll see one General entry here okay so now we we process this uh for this month right so let's see this just refresh in connection you'll see now one General entry let's see that General entry okay so what system did system credited the sales account okay and debited the defer income account which was credited when I booked the sales okay so now defer in account settled with 1 lakh one 1 L 1,362 and sales account was what credited with 1 lak 1,362 here my income got booked for this month okay now my liability will show some 11 lakh something will show as my liability still liability then again for June month it will book uh one entry okay one uh General entry and likewise system books for every month or quarter Whatever frequency you want to set you can set that okay so this is how your uh Deford accounting happens okay we created item Master we saw the sales entry and we saw the general ENT any questions in Deford revenue and expense okay so one one question we generally get like say this service has got terminated on 31st of May what should I do so what you can do you can go to sales invoice which you have created okay the sales invoice which you have create created you need to go to that sales invoice and here we are a fi where you can uh give the service stop date okay so on 31st of May the service got terminated so you will you will the first June date and you will you can save and update this transaction so what will happen for from June month system will not create that General entry automatically okay and the other reversal process like how you will refund the money or you will create the uh credit note and all these things is a normal process you need to create separate credit note and then you will give uh pay the to the customer that is your normal buy selling process okay just to stop Auto General entries just to stop auto booking of dver Revenue you will just come here and just click on service stop date and save the system will not book uh defer Revenue okay yeah let's move to the next topic periodic and Perpetual inventory okay so difference between periodic and Perpetual inventor so in Erp next phasically by default when you set any company or when you create any site and create a company It Is by default Perpetual inventory system okay what does it means so Perpetual inventory In Perpetual inventory system your stock module is integrated with your accounting module okay so wherever any stock movement happens the respecting accounting impact entry respecting GL impact will get booked okay whereas in periodic what happens your stock module and accounting moduel is not integrated so if you do any movement of stock there will be no accounting impact okay and whatever accounting impact you want for the movement of uh stocks or whatever buying selling you have done you have to do those entries manually while using a general entry okay so by default all the companies are uh when you create a company it it gets automatically set as a Perpetual accounting system okay so if you open any new company yeah so in company Master uh in stock tab you have enable Perpetual inventor so by default this gets checked whenever you open new company this checks will be available and by default your company will be a Perpetual so where your stock module and account module will be integrated but if you want your company to be not integrated right so what you can do you can create company save and come here in the stock module and uncheck that checkbox and save okay when you do this setting your stock module and accounting module for this company is not integrated so whatever transaction you do like whatever stock transfer purchase receipt delivery node there will be no accounting impact okay so we'll quickly see the difference between both the uh uh both the methods so we saw how to create company like how to enable disable Perpetual accounting system okay we'll see how to like how to tag the expense master and other Masters in item Masters I'll just quick quickly explain what I'm trying to say here so saying periodic company in expense what you will do you will create exp purchase accounts right so when you do a purchase you just want to directly hit the purchase so for example I have purchased say 10 laptops okay so in Perl what happens it shows stock in and account debit to stock received but not build like your stock got added and your liability stock receipt but not build your liability account which gets credited but in case of periodic what will happen whatever expense account you have tagged in the item master or in the transaction that expense account will get debited and the party will get credited directly your experence account will get debited so when you purchase a laptop say you have purchased 10 laptops uh of 1 lakh rupees okay your 1 lakh rupees will get debited against that purchase account and L rupes will get credited against party okay so this electronic purchase account is already created similarly if you want multiple accounts like uh stationary purchase service purchase different different account you can open so it is similar like your uh if you're using tally uh in the tally the similar accounting happens right tally is not a u uh Perpetual accounting or tally is not integrated accounting Tally's accounting module and stock module mod is not integrated okay so it's like it becomes like a accounting software okay so uh if you want we can add one more purchase account say Okay consumable purchase account expense type I can say expense I'll just create so there one more account I added likewise you can add different account as you want okay now uh we created the one like we saw the like you can create the account okay similarly in item Master if you want to tag like on purchase of any item okay I just want it should go in any item right uh like I'll just add one more item just otherwise okay so I'm adding one consumable item where I have a maintenance stock this is my inventory item okay not non-inventory item not a service item this is my stock item inventory item with the name of okay so I'm just creating that uh in the accounting section again here you can set the default account so let's set the default account for fa periodic uh here okay I'll just set the default expense account okay so what we created just now consumables consumable purchase account that I set in expense account okay so we created item Master we saw how to tag the expense account in item Master which we have already seen in the uh budget module okay budget uh section now let's quickly create purchase receipt okay so okay so now I'm not creating purchase order because in any case like wherever you like whether you use a periodic or Perpetual there will be no accounting impact on purchase order okay but I'm showing you purchase receipt because there is accounting impact uh when you have a Perpetual system uh on the purchase receipt right so I'll just select any company I selected the I should select the pr periodic I'll just select again okay so I selected the Frapp a periodic now okay and let's purchase that consumable item okay so say you are purchasing 100 quantity at the rate of 100 10,000 okay here I'll just edit and we'll see the expense account consumer purchase account which is coming from item Master either you can select here or in the item Master depends on your processes okay so just saving and submitting this transaction so here there will be no accounting in okay because just stock movement has happened like from supplier to your Warehouse supplier has just sent you the uh material which you have taken in your stores okay so it it is legally just a stock movement okay but since you are following periodic method there will be no uh accounting impact because your stock module and accounting module is not integrated still you have not received the purchase invoice and you are not booking your purchase invoice okay so that's why there was no accounting impact but if you go and see other purchase receipt you will come to know the uh difference so this is a purchase receipt which you have done in frappe in company if I if I see accounting ler what happens your stock in hand account gets debited and your stock receipt but not built account gets credited okay so this is your liability account and this is your stock in hand account is your asset account so on movement of stock from your supplier to your there is a stock inut because here you're receiving stock you're sto in it in your store and since your stock model is integrated with your accounting moduel you also need to punch the same okay but here you will not see any accounting okay now the second thing when you create a purchase invoice of this against this purchase receipt check the accounting entry your creditor got credited and your expense account consumable purchase got debited okay your expense account got debited your party account got credited okay this happens in periodic but if you see In Perpetual here also you will see the difference uh I'll just go in connection and open the purchase invoice okay creater got created here also credor got created both are same because you'll credit the because they have supplied you material but here your stock received but not build account got debited which is the liability account which you have credited when you have done the purchase receipt grn okay so your this account got nullified stock receipt but not build account got nullified okay because in the purchase receipt it got credited now here it got debited so it become zero now the your final entry is stocking hand account got debited and creditor account got credited okay so your stock account which is in asset okay the asset account got debited and your liability account got Creed but here what happened there was no accounting at purchase receipt side but here your supplier got credited but your expense account got debited directly you booked your expense okay but still you have not consume right you have not consumed this material like you have not used this consumable for production or you have not sold to any customer right it is still in your warehouse but even though you are showing it as your expenses which is not correct so then at the month end or at the quarter end what you will do you will credit this account and you will debit your stock so what at the month end see if I'm not doing any consume I'm not like whole month I'm not done any business or anything at the month end what I'll have to do when I close my books I have to do stock account debit 10,000 and consumer purchase account credit 10,000 that entry I need to pass manually then only my books will show the right because that stock is lying in my warehouse that is my asset that is not my expenses okay so this is the difference and similar cycle happens at the time of sales okay this I shown you purchase it purchase invoice you will also see similar cycle when you do a delivery note and sales invoice on the delivery note there will be no accounting impact at the time of sales invoice you will not see the cost of goods sold okay because see if I have purchased this item at 100 rupees right so 100 is my cost of goods sold if I'm going to sell this item say at 200 rupees okay so my cost of goods sold will be 100 and 100 will be profit okay so on the sales invoice on the creation of deliver note there will be no accounting impact on the creation of sales invoice you will not see the difference like how much was the cost of goods sold and how much was the uh your income okay that difference you will not come to know okay so that's why uh generally people who migrate to any Erp they want to follow Perpetual inventory system where where they want their stock module to be integrated with accounting module so that all these manual entry they need not have to do and they get the right picture of their business uh any point of time like real time basis they get the what is their profitability how much is the stock how much is the expenses how much is the income right so only in case of Perpetual inventory system they get the right picture in the periodic they have to do lot of manual entries they have to check this stock they have to check the uh and then they have to do all these accounting impact adjustment entries via General entri and then they get the correct picture of their business okay so that is the difference between periodic and Perpetual we have not seen any customer using like at least I have not seen any customer using periodic okay but in Erp next you have both the functionality periodic and Perpetual if anyone ask like I just want system to be run same like as a tally then you have this function t or any other accounting software since I know tally I'm taking the name of T but other accounting system which is not integrated the stock module you can take the reference of uh uh those as well okay but any customer who is moving to Erp would like would like to go to Perpetual inventory system only because this gives you the runtime basis your profitability and everything okay any questions in uh periodic and perpetual let's move to next topic bank reconciliation so what is bank reconciliation and why it is done so uh bank reconciliation is basically reconciling your books of account transaction with your bank statement transactions okay why that happens see you receive a check from customer right so what you do when you receive a check you go and in your Bookshop account like in any Erp or any system what you do you do a receipt entry like in in Erp next what you will do you will do a payment entry where you will select the party you will say the C you will select the customer and you will say that you have received that much amount from the customer right and you have booked that invoice and after booking that after submitting that transaction you customer balance will get increased like your account receiver will come down and it will show that you have received the money from the customer okay now after on the same day or next day you you will go to bank and you'll submit that check in the bank and then bank will take one day two days three days based on uh okay uh it depends on the country and bank so it it might take one 2 3 days to uh credit in your account right but because of various reason that check is not get cleared okay so either that check gets bounced or uh that check gets misplaced or okay something will happen and you will not receive money in your bank account okay now since you have you have shown that you have received the money from the customer in your books of account your bank balance will show that you have received x amount from customer and this is your bank balance but when you see when you go and actually check your bank statement okay that amount will not reflect in your bank account okay so when you do a Reconciliation like this entry which I booked in my books of account has been got credited or not in my bank account then you'll come to know okay this check is got bounced or got lost okay so that means whatever I show in my books of account is not a correct picture I have not received actually money from the customer okay so that part that cross checking is called as a reconcilation basically you reconciling your books bank balance with your bank statement balance okay and at that time you'll come to know various reason why this got check B bounced and all these things and at that time you come to one at uh at one balance where you have book balance and backs Bal matches okay so that is called as a bank reconciliation and this is very important process in all the companies whether it is small company or big company listed company all the companies has to do a bank reconciliation without which they will not be able to show clear picture right and always your books of account should match with your bank's account okay you cannot show uh access balance in your books of account and which you have not uh have actually in your bank account okay that is a wrong representation of your accounts to authorities or who are the stakeholders like investor supplier customer shareholders everyone right so that is a wrong representation so that's why bank reconciliation is very important and uh it is generally done monthly basis but like if you have multiple like lot of transaction people used to do continuously like every day or every alternate day okay it depends on customers uh uh number of transaction and other things but this is very important process so in Erp next you can also do a bank reconciliation because this is a mandatory and like must have process in any accounting software uh but in Erp there was a process available earlier also that was a process of manual okay now we have also brought in semi-automatic and one of our partner also have contributed fully automatic okay so I'll explain the uh manual one and semi-automatic fully you have to try try because uh okay fully that you can try I'll explain how to try and then you can try it your own okay few settings need to be corrected or need to be done in uh your companies to use the semi-automatic okay okay why I'm saying corrected because you are already using Erp X you are already booking your payment entries and other things but to do a semi-automatic there is some configurations which is required which I'm going to explain right now okay so let's see which all master settings are required to do a semi-automatic and what is the difference between manual and semi semi-automatic or what is it difference of configurations okay so we'll first create a account in chart of account okay [Music] so so in asset current Assets in bank account you will open One account all right so for that multi currency we have open one City Bank USD account right but for my day-to-day transactions I'll be having one account so I'll be creating icc1 123 why I'm giving name like this so this is my bank name and this is my account number okay so we have seen customers are having multiple account in same bank same branches also okay so that's why you need to create separate account for each bank account in chart of account okay so it is not like in ICI Bank Bank fun Branch I have two accounts but I'll be creating One account in chart of account that is not correct so always your bank account and chart of account is one to one mapping you need to have same uh like chart of separate chart of account for each bank account okay so that's why I'm naming it here and that's why I'm like essing multiple times like how you need to do a configuration since I'm uh also showing the correct configuration right so if you have done on any wrong configuration or facing any issues you need to do all these Corrections so IC 123 will be a One bank account okay uh account type I selected the bank will be creating okay similarly say I have IC overdraft account I'll be creating that separate IC 456 will be a separate account okay this is account created in chart of account okay in manual case this is enough just to create account and selecting in transactions like General entry payment entry will work your manual bank reconcilation will also work but for semi-automatic you need to create bank account that is another master in Erp next another doc type Okay so ICC 1 2 three bank account I'm deliberately naming it as a separately okay because this is a bank account Master this is a separate Master okay here you have a checkbox is company account yes you have to select the company which it belongs to then when you select when you click here company account right all your chart of account will flow here just now we created icsa 123 so I'll select icsa 123 so this is one to one mapping one to one mapping of your chart of account account with your bank account okay and this will be always one to one you cannot create multiple or single bank account for multiple chart of account okay then there is a third Master which is called Bank Master Okay this is another Master since we have already created I'll just selecting IC I'll explain that as well okay so this this is a separate Master Bank Master okay another do type Bank okay why this is separate Master because say I have four account in ICC one OverDrive account one fixed deposit account two saving bank accounts two current accounts right but for all the icci bank accounts my template whatever template You are downloading from IC C Bank portal will be similar right it will have the similar columns date deposit withdrawal description reference name bank account that's why bank is a separate master and which you can tag in multiple bank account Masters because the template will be a same so we have given option of configuring template in Bank Master okay so now we saw to create uh account in chart of account we saw to create bank account master and tagging both one to one we saw how to create bank account now here in the bank account you can you need to configure your template so here these are the default fields of Erp next okay this these are the fields of Bank transaction do type where you have to select date and you have to type the corresponding name of your template so this is say this is my bank account uh template which is getting downloaded from Bank portal okay here the label of the column or the title of the column is date which I'll copy and I'll paste here okay so I'll map the date column with the date okay okay say here it was posting date so I have to type here posting date if bank is giving that column with the name posting date then you also need to give the column name as a posting date okay so that is how you will map all the columns date deposits withdrawal description reference number bank account this six columns I have in my bank template which I have mapped in Erp next okay so this is your bank master so we created Bank Master we also configured our import template okay now we'll see we'll create few General entries basically General entries and payment entries and then we'll do a Reconciliation okay so let's go to journal entry I am showing both General entry and payment entry because many customers are using general entry for for payment and receipt entry okay so because ERX allows you to do that as well so you can select here entry type Bank entry okay here you will select the company transaction date you can select it in March or whatever okay and here just select uh any experence account say I'll select administr experence what is it transaction value 500 so 500 is the withdrawal so I'll just debit 500 I'll remove I'll select the year IC I 123 okay I'll credit this find okay so in bank statement I have a one withdrawal entry for that similarly I'm doing one entry in Erp next okay because you want to do a bank reconcillation so here in reference number I'll put the reference ref number and uh reference date or whatever date I want to put okay now here I have selected the ICC 1 2 3 this is my chart of account account okay if I click here on edit you will see here ICC 123 account but you will also see one field here bank account right which is blank here you need to select IC I 2 3 okay this is your bank account which you just now created this one okay ICICI 123 bank account okay so this you need to uh you need to select okay I already have a two account so that's why there is two coming because maybe in last session I selected yeah so we have two accounts so that's why it is coming there are two accounts are coming so here you need to select this same account right IC 123 bank account okay on selection of this account you will see this account is populating automatically okay but B after selecting this bank account is not coming okay this is you can say a limitation of Erp next we like we for this of this should come maybe this will come in future but for now just make sure you're selecting this account properly and in the custom form you can make this field mandatory if you want to use semi-automatic bank reconation so if you are already using Erp next form say version 134 just make sure you do all this uh create all this master and your users start selecting that this otherwise you will not be able to do the sem atic Bank reconation okay so this was the important thing I wanted to show now let's save and submit okay so we created one General entry there will be one more payment entry so let's create that also of, rupees so this is expense account uh this is this was a payment entry I'll just quickly create one see here you keep Bank entry or general entry it doesn't like it will not impact anything okay so it's not necessary you need to select bank I just one it is received right so so we have received 1,000 so I'll just make that say we have received from customer so this is a receipt entry where you you're debiting your bank account and crediting your customer I'll just put the reference number uh reference date of to days okay here in edit I have to select the bank accounts okay so these two entries we have done I'll just quickly set submit and all other entries will be doing in the same date okay so let's do one uh two payment entes quickly and then we'll do the reconciliation okay if customer is using payment entry for receiving and making payment that's why I'm showing payment entry as well so I'm showing both General entry and payment entry this is a thir transac is a withdrawal transaction that means you making a payment so payment type pay okay party can be a supplier okay again here you have a company bank account okay on selection of company bank account your account will get selected automatically but on selection of account company bank account will not get selected automatically and this is also not mandatory field so if you want user to select this field make this field mandatory from custom form okay so on selection of this this will get Auto selected okay uh uh paid amount is 12200 and reference number is okay so this is the payment entry simple if you want to adjust against invoice you'll fetch the invoice or order whatever okay that process we have seen so I'm just saving this on account payment entry okay let's quickly create one customer payment entry receive on selection of this it will flow uh it was 1,400 1,400 okay okay so four entries we have done in books of account uh those four entries are there in my bank statement as well two entries we will keep only in bank statement we are not going to have those entries in our books of account okay this might be interest this might be a charges Bank charges which we come to know when we upload a when we get a bank statement right so similar case we will run uh in uh when we do a bank reconcilation okay so now created we created the general entry we created the payment entry now we'll upload this bank statement and we'll do the reconcil okay so we have a bank reconciliation tool okay before that this is a bank reconciliation tool before that if you want to see a bank reconciliation statement that you can see just to see the report like generally uh customer ask like I want to see the report like what which all my transactions are open right so you can show them this uh report okay where all your entries will flow okay and it will give give you the like uh check outstanding checks and deposit okay so all these columns are there okay so they can see this reports and like just want if they want to see the report first before doing a reconcilation okay so how much is there check spending to clear and all these things so that they will be they can use this bank reconcilation statement okay now we have a bank reconcillation tool for semi-automatic uh bank reconcillation right where you can upload the bank statement okay so on the bank uh reconciliation tool you need to First select the company okay now why bank account is important because on bank reconciliation tool we have we do not have chart of account account filter right we only have a bank account filter and that's why if you want to use semi- automatic bank reconciliation you need to use bank account and need to tag in transaction okay so we have selected the bank account here we can click here upload bank statement okay when you click on upload bank statement uh you just select the company bank account click on Save okay now this is the screen from where you can upload your statement so I just I'm using Google sheet so I'm just uh put the Google sheet link click on Save and my all my columns showing here I'll just click on start import so what will happen when I click on start import system will create Bank transaction that is a doc type right so for this doc type there is no transaction right so once I click on start import what system will do system will create six Bank transaction okay these are the this is the doc doc types Bank transaction this is a doc type where this will system will create all my bank statement transactions okay and in this table basically our reconciliation reference comes in when we do a Reconciliation so this is a bank transaction doc type simple I uploaded my bank statement which got completed and showing it as a successful okay uh what I can do I can go to bank reconciliation tool now okay I can select my company and bank account okay and I can click on get unreconciled entries to get all the reconciled entries now these are the six entries which I uploaded through bank statement which are showing here you for reconciliation all right the first entry is for find it I can click on action to do a Reconciliation now when you click on action right we have multiple filters here the first action is match against voucher okay so you have to select the match against voucher now you need to select this payment entry General entry this you need to select fine this is some let see okay fine uh so what happens when we click here on action okay I'm not sure some error is coming but yeah I will check that so what happens when you click on action here you get one box where all your payment and general entry shows which is matching to this entry with this reference number date and amount okay you can check uncheck this payment entry General entry okay if you're not finding it in payment entry you can select the general entry right so what will happen the system will fet that transaction here you need to click on that check box and click on sub MIT the system will submit that transaction and it will mark it as a reconcile okay uh let's try this one yeah some error is there uh let's try this [Music] one now here what happens this transaction was not there in our books right we have not created any transaction any payment entry or general entry for fifth number so in here here we have a option of directly creating voucher from here right you need not have to go in the another Tab and create General entry and payment entry and then come back and do the reconcilation from here itself what you can do you can create voucher you can decide what you want to create payment entry or general entry okay this is the transaction of say this is a withdrawal of 1,800 this must be a bank charges right because we are not aware what have happened so I'm assuming this is my bank charges so what I'll do I'll create here General entry okay here what I can do Bank charges okay so there is no account of Bank charges I'll just quickly create in chart of account in chart of account I'm creating indirect expense account say One Bank charges okay this is your ex uh this is your expense account okay I'll just create and similarly I'm creating one more account so that we don't have to come again here indirect income Bank interest okay so I just created Bank interest account uh which is my income account under my indirect income okay so now here what you you can do you can select the bank charges okay and click on submit so system will do the reconciliation and we also add the one General entry so this General entry got created automatically which shows the bank charges account debited and your bank account got credited okay uh with the reference number and all the information okay and in Connection in con connection you can see the that bank transaction which we have uploaded which got reconciled okay and in reconcilation here you can see uh that reference against which transaction this this entry has got reconed okay so I'll also show for Bank interest this is a deposit right so we must have received the bank interest so what I can do I can create voucher General entry here what I'll select okay I'll click on submit again one entry got Rec side and one entry got created if I go to bank transaction now I'll see who transaction which got reconciled okay and similarly I can see the general entries this is our general entry which you can open which got created automatically so this is how you can do the bank reconcilation I'm not sure what is the error uh I need to show it to product team developer basically uh but we we also have a auto reconciliation which you can try okay right now maybe because of this that will also not work but I'll show this error to productive and I'll try to get this fixed and uh I'll show it in uh our Q&A session okay but that this is how you can do a semi automatic and automatic bank reconciliation okay uh for manual one which is the old method Bank clearance doc type is already there if you if you don't want to do the semi-automatic and all these things you still want to continue with the old method and okay you can always do that you just have to select the account okay here Bank clearance works on the chart of account itself so no need to create bank account and all these things you just have to click here you have to get payment all your payment entries will come here all your reference number you just have to come here and update the clearance date that's it if you upload update this clearance date you can just click on update clearance date this two transaction will get reconciled okay this is the completely manual here you have to select the date manually okay here of course you can use this download upload but like putting all this date in the upload template and you can just upload but this is the old method and uh and this method is also continued in your next okay so if I go to bank transaction list okay so it is not updating your this Bank transaction okay because in Old method you need not have to do a bank Recon this it it will just update your uh transactions H to okay it will update in I think in payment uh here also you will see the updates in the transaction okay so yeah this this is the bank reconciliation any questions in bank reconciliation then we have one more topic we'll quickly finish that any questions in bank reconciliation okay so let's quickly finish the uh India compliance this is the last topic of our Advan accounting so uh India compliance app is a new separate app in version 14 uh okay this is related to Indian GST like localization related to Indian GST okay if you're operating if your company is in based in India okay when you create a company in India and if you want uh this India compli like GST to be work automatically e Bill e invoicing all these things then you need to install the India compliance app okay when you when you create a site you install right Erp next framework and Erp next account Erp next app along with that you also need to install the India compliance app okay prep framework Earp next is installed along with that you also need to install India comp so now the this topic is for India specific but anyone wants to like outside India and wants to see they can also understand but this is specific to India localization okay similarly if you have a company say in KSA for KSA localization also available on Marketplace and other other apps right so all these localized app you need to install based on your company location or your site location right so if I have a K I will not install the India complex I I will install that KSA app okay the two apps are by default apps Erp next and fra framework which is you seeing right now we are using for India you need to install India compliance okay on installation of India compliance app you will see yeah okay when you install a India compliance app successfully you will see this GST India time otherwise you will not see if you have not installed you will not see this GST India okay so GST India is the doc type is the screen where you have to do all the settings related to GST earlier there were different doc types like GST settings and invoicing settings two doc types in version 13 but in version 14 you will you have to install the IND compliance app and you will have only one doc type where you have to do all these settings so this is the doc type GST setting which you also can search from here GST settings okay uh this is the doc type where you have to do all the configurations all the settings so view text breakup so I'll explain this settings so basically all these settings are there uh if you want to to validate HSN code if you want to make the HSN code mandatory in the item master and at the transaction label you can check this if you are checking this system will ask you to mandatorily put the HSN code while doing a transactions okay if you want to enable uh e invoicing okay you need to click on enable API feature okay if you want to test re invoicing uh with the government sandbox with the GST portal send box you just need to check this box okay this will work on frappe Cloud okay if you're are if you are selfhosted then you just need to do a configuration in your config file but if your site is hosted on Frapp Cloud you just need to check this F and your sendbox mode will activated okay uh the other settings are there like enable e invoicing this will enable only if you are checking this okay otherwise your unable invoicing will not work okay so all these settings you need to do uh based on your requirements I'm not going on on each of the setting because it is already explained here okay uh so now we have enabled the sandbox mode right but if you are using uh on the live site right if you're not if you're using on the live site here you need to put the credentials like your company GST number and all these things and then whatever uh settings you need to do on GST portal so basically on GST portal you need to select your GSP okay and after selecting that GSP you create one username password that username password you need to put here so detail documentation is available and that is also link also given here okay so that username password you need to put here and then it will work like a live like directly integrated with your GST pH this this you will do only in case of live okay otherwise for sandbox mode for testing already sandbox mode is activated and in that case no need to put any credentials okay this is the second tab where you need to do settings of accounts configuration of account so say if you are moving from version 13 to version 14 okay and if you're coming to this GST settings screen doc type you will not be able to save because you must have created multiple accounts for input output or for reverse charge right but now in version 14 you only need to have three types of account one will be for input like all input cgst sgst output cgst sgst igst and one for reers charge okay no need to create separate account for reverse charge input reverse charge output okay only three type of account would be there and separate account for input cgst 5% input cgst 12% like percentage wise also you not required only one account for all your input one for all your output whether it is 5% 12% 18% 28% that configuration is taken care at the item level okay and when you want to so in now in chart of account also so if you are already having all these account you just need to transfer the balance from one account to another account and you can disable those account so again here in the if you see in the tax account right you will see only one output tax cgst you will not see output tax 5% output tax cgst 12% right no need to have multiple account only three account for output CGS sgst and igst and similarly three account for inputs okay so this is the first step which you need to do basically just to use it India compliance app otherwise this will not allow you to save so all your additional account you need to remove from here okay so this is your GST setting now we'll quickly see how our GST can be calculated automatically okay uh so the quickly when you when you create any Erp site on frappe Cloud right by default when you your chart of account is getting set this account gets created automatically and all the settings related to GST gets created automatically okay but if you are moving from version 13 to 14 and your database don't have all these account you need to do this settings right and you when you creating new site also you need to correct few settings based on your business processes so first first thing is you have to come in the chart of account you have to you have to create the account if you're not having the correct account if you are having the correct account you have to make sure you are editing this account and making this rate zero when this is required when you have a multiple rate items say you have a 5% item 12% item 18% item make sure in the account Master the rate is made zero okay so you have to make this rate zero all the three accounts uh first like uh okay so output tax C GST output tax sgst you have to make this rate zero and igst account will also be a zero okay this is the first step when you want to do automation around GST Okay so we edited the account we created edited the account in chart of account okay the next step is going to the sales tax category tax category sorry not sales tax category only tax category okay so earlier in version 13 people have created multiple tax categories based on state so if they have a multiple state warehouses they were creating multiple but now in version 14 and version 15 you need only two tax categories one for instate okay here in Source State you have to select nothing okay and no configuration it's just a simple name you have to give and save okay instate or whatever name you want and second setting is in outstate only one just you have to click on E interstate so outstate is used for transaction between two states say Gujarat to Maharashtra Maharashtra to Karnataka Karnataka to Delhi right when transactions are happening between two states that is e interstate and for that you need to create one outstate tax C only two tax categories earlier in versin 13 you might be having multiple tax categories statewise different tax categories but now in version 14 you need only two tax categories okay now we have created the tax category the next step is say tax and charges template okay so we have a separate templates for sales tax charges and Purchase Tax charges so for purchase side you have a Purchase Tax charges and sales side you have a sales tax charges template okay now this is again company wise we just I just filter I'll show it only two tax charges template you required one for instate and one for outstate so if your transaction is happening within same state instate will apply if your transaction is happening between two states out State app okay and this system will apply automatically that is I'll show uh okay so this is the next step here what you have to do if you have defined this tax rate you just have to make sure you are making it zero okay only in case of say Service Company where they all their services are buil on 9% and 18% only okay they can follow this they can keep this tax rate nine and they they have to select the one tax template only right but the companies which are dealing into multiple tax rate items 5% 12% 18% in that case in the sales tax and charges template you need to make this tax rate zero okay and in the sales tax and charges template in case of instead you just have to tag the right tax category in case of instead the tax category will be inate in case of outstate the tax category will be outstate okay and there are other settings available if you are if your taxes are included in the uh item uh rate only then you you will you can check this box is this is tax included in your basic rate okay in in that case only you will check this check box okay so this is the basic settings which you have to correct or either do or correct in the system you have so in the outstate again outstate tax category need to be tag and rate should be zero okay now the last thing this is related to taex template okay so I'll just quickly go on the sales uh invoice and we'll see when you are selecting company right and when you're are selecting your customer okay after selecting company after selecting customer what you select you select the address is right your company address and customers's address just check yeah so let's use the another company for now just to show you the setting is similar just since we have a address created by default we'll use the frapping okay and customers are sha Electronics okay so let's take this sha Electronics okay now after selecting company after selecting customer you go and select the addresses right of sha Electronics you will select the uh sha Electronics will have multiple addresses right so you can select the their addresses so here we have a Gujarat and Maharashtra address Mumbai address so say I in Gujarat address okay now I'll also select my address say my goods are also going from which address okay so if it is going from my Maharashtra Warehouse right the system will Define the template automatically so when I selected customer as address as a Gujarat and my my address as a uh Maharashtra system has selected automatically output outstate GST right which is applying the 18% similarly if I select customer address is of Maharashtra mbai okay system will apply the yeah and my mine is also Maharashtra and customer is also Maharashtra so now system will apply the text template of uh instate supplier address is not changed I guess in the invoice so I need to just duplicate it or basically we need to create the addresses properly based on address collection it will work okay hello yeah contact an address you have the supplier address I think you have not selected the uhuh so I'm selecting two addresses but here what has happened we have not added the uh okay so that is what I expl I explain just just wait yeah okay so when you're creating your addresses right you need to put proper GST number and categories and based on your and customer address right so my and company's address system will fet this template automatically okay so here if it is between two states system will F the WR template now I'll explain and we also create let's quickly create the addresses for our new company only so okay so I can give whatever name I want [Music] to give to my address title address line you need to add okay now this Corrections City town is now mandatory okay Country Now is the drop down available so state is also now at drop down is available okay so earlier in version 13 you you are not having this drop down for country and state Province okay so if you're migrating from version 13 to 14 you you might face some issues while saving submitting your addresses so all these things you need to correct like many times there is a spelling mistake in state Province right so all these things you need to make sure that you have updated because now these fields are mandatory and these are the drop downs okay so now the important thing what we have added is the state all these things also postal code in case of you want to do a EV will then postal code is also important uh so make sure you also add the postal code now when you are selecting like when you are putting the GST number right so I'll just take one GST number okay so this GST number you need to put properly okay when you put a proper GST number system automatically takes this category right but if you're migrating from say version 13 to 14 you have selected the wrong category some wrong GST number was there so just you want to make sure that you are correcting all this thing okay on correction of this uh you okay we'll also add one more uh address and then I'll show it how it works okay e okay so here you need to put the GST number and this is very important based on this category only all your tax all your tax calculations works on the transaction so 5368 yes see the all these validations are already put okay if you're putting wrong text uh postal code system will also 53 068 Y6 yeah so uh the address Master is now very much important the selection of State country postal code categories okay uh one more thing I just wanted to show here like if you're creating customers address right uh and if you have a export customers or sez customers now earlier what used to happen you you need to create a separate tax categories and sales tax charges template and all these things right now based on selection of this GST categories system will not apply any tax okay if you selected scz or overseas system will not apply any tax okay so no need to create tax rule tax category sales tax and charges template or manually delete it no need to do based on this tech text category system will automatically uh will not select any text template in the transaction now let's try I'm not added for any customer but uh let's see okay now sh Electronics I have selected in address Master what I'll do I'll select the this is unregistered address this is open yeah so this is Karnataka to Karnataka billing let's see it applies the yeah so it applies the out of tax like instate tax like cgst and sgst uh let me change the address now of Gujarat now it will select the igst okay so based on your customer address selection okay what happens here you will see when I change the C when I uh when I change the any uh tax categories okay when I change any address this tax category gets changed and this is the important thing when you select any customer and based on that customer's address category system applies the tax automatically not applies the taex just the text template automatically how tax applies that I'll explain but this is how like for example now if I have any other customer who uh let's quickly click create uh sh Electronics overseed address fine now your category will be overseas right uh so I'll just quickly add the okay so I'm adding overseas address in the Sha Electronics uh customer master yeah so there is a message as said overseas transactions are disabled in GST settings please enable this I'll just quickly go on uh GST settings yeah this is unable just let's see yeah so when I select USA address right now the text category is overseas the T text template should not come okay so system has not selected any text template here okay so earlier we used to create tax Rule and all these things for this oversiz transaction s transaction now system will based on the selection of address system will apply the right tax template okay now the next thing is how my taxes will Define like when I select item multiple rates item how my taxes will apply on the item Master right so now here if I selected uh 700 I'll just go to details and again come back to address I'll just select Gujarat billing okay now here if I have selected item right the item rate is 700 but my tax is not got calculated so what we can do here in the item Master you have a text tab where you need to Define your item text template okay item text template means this item is of how much how much percentage okay so say if I have a uh let me open the item text template company fret yeah so this is the GST 12% this is item text template doc type where you have to define the percentage whatever name you want to give just Define define the company okay total percentage you can Define and breakup you have to give like this okay so for output and input for both you need to create only one item text template okay uh even for RCM also you need to create only one no need to create separate for output separate for input and separate for RCM okay and when you give a breakup here you just have to give breakup for cgst and sgst okay this item text template you just need to tag in item Master yeah so GST 12% this belongs to this company I'll just saved it okay I'll just come back I'll select this item again I just have to reload yeah so just reloading okay my text came automatically on selection of item yeah so this is is the way you can create item text template we'll just quickly tag in few item Masters and we'll let's tag in consumable so here I'm tagging 18% and one item I have tagged the 12% let's see if it is getting calculated h e so on selection of item this item text template should get Auto selected sure why it is not working so here the basically the item text template is not coming automatically uh that's the issue but I'll just check if I found anything sure e yeah so now see text on selection of item on selection of item this text template came automatically okay GST 12% so I'll also try to select uh MacBook Air yeah so see if your item text template gets selected it will automatically calculates the text on that item okay so so what happens when you tag item text template in item Master Okay uh your item taxes are getting calculated based on your item Master okay now on Save I'll just show one more thing tax breakup is there okay so this is a tax breaker like on item one you have applied uh 28% and on item two you have applied uh 6% each right like uh 12% and 18% 28% so this is the breakup now this breakup if I want want to see based on HSN code right for that there is a setting if I if I want to see a breakup based on HSN code I'll just check this and I'll click on Save and I have to define the HSN code in item master and then I'll be able to see the breakup on HSN code basis okay so yeah this is how your taxes will also get calculated automatically based on address selection and item selection okay so no need to select anything manually like text template or taex or nothing it will automatically get selected okay now after saving and submitting after saving and submitting you will be able to see the uh I'll just apply to Frapp Tech so let's see yeah so after submitting sales invoice now we will be able to see the uh generate to generate the E invoice and e as well okay so uh and for earlier in version 13 e invoicing was generating after drafting the sales invoice but now in version 14 your e invoice will get generated only after submitting the sales invoice okay and the second thing is for e e bill this transporter details you need to fill while doing a transaction so all the information distance vehicle number driver name uh LR number all these things you have to fill the information and then only you will be able to generate the E Bill okay that you can try like it's uh on generation of EV Bill and invoicing you will also be able to see the print formats okay QR code and other things so that you can also try in your test site so like just enable the sandbox mode and just try generating EV and okay and also detailed documentation is available step by step guide is available how we can configure invoicing and EV that steps is also available