Keep books with Accounting

A team's admins and its accountants can open Accounting. An accountant is a guest of the team with Accounting; in Personal, that is you and the accountants you invite. See Give your accountant access to the books to give an accountant access.

Accounting keeps double-entry books for a team or Personal: every journal entry has equal debits and credits. Invoices, payments, expenses, Store sales, Supporter and Form payments, Stripe fees and payouts are added to the books whenever an Accounting page is opened; see Invoices, payments and sales in the books. Record anything else with a journal entry, a bill or an imported bank statement.

Accounting's pages are listed under Accounting in the sidebar:

• Overview: what needs doing, cash and this year so far.
• Banking: bank and card statements; see Import and review bank transactions and Reconcile a bank or card account.
• Bills: what the business owes suppliers; see Enter and pay bills.
• Fixed Assets: equipment and its depreciation; see Depreciate fixed assets.
• Journal Entries and Chart of Accounts: this article.
• Recurring: bills and entries that repeat; see Repeat a bill or journal entry.
• Reports and Budgets: see Accounting reports and budgets.
• Settings: the books, the accounts records from other areas use, and accountants.

Set up the books

Open Accounting and choose the date the books start. Use the first day of your financial year, or the day you start keeping books in Magpie. No entry can be dated earlier.

The books start in the team currency; choose another in the sentence below the date if they should be kept in something else. If the team has not chosen a currency, the one you choose becomes the team currency. If it has one, that stays as it is. Neither the start date nor the books' currency can change after setup. The team currency still can, on the team page or, for Personal, in account settings; the books keep theirs.

Choose Set up Accounting. Setup adds a standard chart of accounts, which you can rename, renumber and add to.

The overview

Overview opens on what needs doing in the books:

• transactions to review in each bank or card account;
• bills due within a week, and how many are overdue;
• payments waiting to be deposited, and Undeposited funds is below zero when a deposit took out more than the payments now hold;
• records that need an amount in the books' currency, or could not be added;
• repeating bills or entries that have stopped;
• Enter opening balances, until they are entered.

Each links to where it is done. When many records from other areas are waiting, such as just after setting up books with a long history, they are added in parts: Add more records to the books adds the next ones.

Below that, Cash shows what each bank and card account, Cash, Undeposited funds and Stripe balance hold in the books today. This year shows income, expenses and net income so far in the financial year, on the basis Profit and Loss opens with.

Opening balances

Records dated before the books start are not added, so enter what the business had and owed on the start date: each bank balance, what is owed on each card, cash, unpaid invoices, unpaid bills, unsold stock and sales tax not yet paid. Every other asset, liability and equity account is listed after those, such as Equipment, Accumulated depreciation and Loans. Choose Enter opening balances on the overview, or Opening balances in Settings, fill in the amounts and choose Save opening balances. Leave an account blank if it was zero; a negative bank balance is an overdraft.

They are saved as one journal entry on the start date, balanced against Opening balance equity. Saving again reverses that entry and posts the new amounts. Profit or loss from before the books start is part of Opening balance equity; your accountant may move it to Retained earnings.

To fill in the amounts from a trial balance exported from QuickBooks, Xero or another program, see Move books from QuickBooks or Xero.

The chart of accounts

Chart of Accounts lists accounts by type. Each asset, liability and equity account shows its balance today; each income and expense account shows this financial year so far, as the reports do. The types are:

• Assets are what the business owns, such as its bank account.
• Liabilities are what it owes, such as a credit card or sales tax.
• Equity is what belongs to the owners.
• Income is money earned.
• Expenses are money spent to run the business.

Assets and expenses grow with debits. Liabilities, equity and income grow with credits. Balances are shown so that the usual direction is positive.

Choose Add account, enter a name and a type, and choose Add account. The new account opens. Click its name, number or description to change it, or choose a different type or detail type. The detail type sets where the account appears in reports: Bank account and Credit card add it to Banking, and Cost of goods sold puts it above gross profit in Profit and Loss.

Accounts marked Used by Magpie are where Magpie's other areas record invoices, payments and sales. They can be renamed and renumbered, but keep their type and cannot be archived. Any account keeps its type once it has entries.

Archive account, in the account's More menu, stops it being used in new entries and keeps its history; Restore account in the same menu offers it again. An account with a balance cannot be archived; move the balance to another account with a journal entry first.

Each account's page lists its entries between two dates, starting with the balance before the first date and showing the balance after each entry.

Post a journal entry

Choose New journal entry on Journal Entries. Enter the date and a memo, then a line for each account: choose the account and enter a debit or a credit, with a memo for the line if you want one. Add line adds another. Totals under the lines show whether debits equal credits.

For example, money the owner puts into the business is a debit to Bank and a credit to Owner contributions.

Choose Post entry. An entry is refused when debits and credits differ, when a line has no account, or when the date is before the books start or in a closed period. The form opens again with what you entered.

Journal Entries lists every entry, newest first. Search memos, show the entries between two dates, or choose Entered by hand or one area, such as Invoice or Store order, to see only those entries. Export lines downloads a CSV of every line between the dates, with its account, contact, debit and credit.

Correct an entry

Click the memo of an entry entered by hand to change it. Its date, accounts and amounts cannot be changed, and it cannot be deleted. To correct them, open the entry, choose More, then Reverse this entry, and choose the date of the reversal. Magpie will post the opposite entry, so the two cancel out, and link them to each other. Post a corrected entry if one is needed.

Use the same date to remove the entry from its period. If that period is closed, choose a later date.

An entry added from another area, such as an invoice, cannot be reversed by hand. Change or remove the record it came from instead, and the books will follow.

Attach receipts and documents

A bill or a journal entry can have files attached, such as the supplier's bill as a PDF or a receipt for a card payment. Under Attachments, choose Attach files and pick one or more JPG, PNG, WebP or PDF files of up to 10 MB each. Click a file's name to open it, or choose Remove to delete it. A journal entry also lists the files on the bill it came from. For a bank transaction, open the journal entry it added under Done and attach the receipt there.

Anyone who can open the books, including an accountant, can open the files.

Close the books

In Settings, choose the month under Financial year starts. The financial year starts on the 1st of that month. Changing it changes only how reports and the overview group the entries.

At the end of a financial year, click Closed through in Settings and choose the year's last day, or any other date that has passed. No entry can then be dated on or before it, including reversals, so reports for those periods do not change. A record from another area dated in a closed period is added on the first day after it, with a note of its own date. Clear the date to reopen the periods. Recording a sales tax return can also close its period; see Accounting reports and budgets.

Settings also shows the books' currency, the start date and who set up the books. Activity, in Settings, lists changes to the books and who made each one.

If an entry cannot be posted or the books look wrong, Contact support.