Brightpearl handles all of your sales accounting entries for you. There are 6 key operations which automatically post accounting journals relating to sales orders and credits, plus additional entries created by allocation steps:

Sales orders Journal ID
1 Invoicing SI
2 Shipping JJ
3 Taking payment SR
Sales credits  
1 Crediting SC
2 Receiving inventory JJ
3 Make a refund SR
Allocating SR

These processes can be completed in any order and the same accounting journals will be created. The entries made rely on various nominal code rules and tax code rules, as well as additional controls for shipping charges and discounts.

Orders

Journals are automatically created and posted at the point of:

Invoicing (SI journal)

This is an example of an accounting journal created when an order is invoiced:

Debtors control account

The entry made to this account is the total of the invoice; the amount the customer owes. It will always be the Debtor Control Account 1100 and it cannot be changed. The amount posted will be added to the customer's account balance to pay. Where the customer has already made a payment against the original order, the two will automatically be matched together and cleared from the account (matched by both journals containing the same order and invoice references).

Sales tax control account

This nominal code is used by default and cannot be changed. The amount of tax posted is calculated based on the tax codes used on the order, which can be seen in the Tax Code column. A different code can be applied to each line of an order if required; each different tax code used will display as a separate line in the journal. The tax codes displayed here are used to ensure the figures display in the correct place on tax reports and VAT returns.

Sales account

The sales account code used is defined by the sales order. A different code can be applied to each line of the order if required; each different nominal code used will display as a separate line in the journal. The amount posted is the tax exclusive value.

Shipping (JJ journal)

A journal is only created at the point of shipping if cost of sales accounting is switched on. These are the accounting entries made when inventory is shipped (by marking a goods-out note as shipped):

Stock/inventory account

This nominal code is selected from the product record. The amount posted is the value of inventory removed from stock, which is calculated using FIFO (First In First Out).

Purchases (also known as cost of sales)

The purchases amount is equal to the value of the items sold.

Taking payment (SR journal)

When a payment is receipted against an order or invoice the accounting is automatically posted as follows:

Bank account

The bank account used is selected at the time the payment is receipted in Brightpearl. The amount posted depends on how much was received from the customer and does not have to match exactly to the total invoice amount.

Debtors control account

This account is always used and cannot be changed since the invoice amount is also posted to this account (recording how much the customer owes). This entry will reduce the customer account balance and therefore how much the customer owes.

Adjustments

Additional entries will be seen for over payments for small balance write-offs, the nominal code is selected at the point of receipting the payment and creating the adjustment.

Nominal code rules

The Brightpearl system follows these rules when creating sales orders:

Initially the sales order will use the product record:
If the item is set to manage stock and you have Cost of Sales accounting switched on, then the product stock code (1000-1199 assets) will be used.
If the item is not set to manage stock, or if you are not using Cost of Sales accounting, then the product purchase code (5000-5999 purchases) is used.
A nominal codes set against the customer:
If a nominal code is set against the customer it will override all nominal codes on the order.
Manually changing the nominal code:
If you change a nominal code directly on the sales order this setting will be kept, for that order only.

Tax code rules

The tax code is assigned to each line of an order. Each different tax code used will create a separate line in an accounting journal with the accumulated amount for that code.

UK
The code used will come from the customer record (if it exists).
If there is no code assigned to the customer record then the product tax code is used.
The tax code can be manually selected against each line item directly on the order.
USA
If the customer is set as taxable then the default company tax code will be applied.
If the customer is set as non-taxable then the tax code will be "- Not rated".
If the customer has no tax setting then Brightpearl will use the setting on the product. A product set as taxable will use the company default tax code and "- Not rated" when set as non-taxable.
The tax code can be manually selected against each line item directly on the order.

Shipping charges

If a shipping charge is applied to an order using the shipping methods and quotes section of the screen the nominal code used will default to the one chosen at Setup > Company > Accounting: Nominal Codes.

Discounts

If discount is applied to a line item using the discount percentage column the nominal code used will default to the one chosen at Setup > Company > Accounting: Nominal Codes.

Sales credits

Journals are created at the point of:

Crediting (SC journal)

This is an example of the accounting journal created when a sales credit is credited:

Debtors control account

The entry made to this account is the total of the credit note; the amount owed back to the customer. It will always be the Debtor Control Account 1100 and it cannot be changed. The amount posted will be subtracted from the customer's account balance; it can be used to off another invoice, left on account as credit to be used later or it can be refunded.

Sales tax control account

This nominal code is used by default and cannot be changed. The amount of tax posted is calculated based on the tax codes used on the order, which can be seen in the Tax Code column. A different code can be applied to each line of an order if required; each different tax code used will display as a separate line in the journal. The tax codes displayed here are used to ensure the figures display in the correct place on tax reports and VAT returns. If the credit was cloned from an original sales order all the same tax codes and amounts will used to reverse the original postings.

Sales account

The sales account code used is defined by the sales credit. A different code can be applied to each line of the credit if required; each different nominal code used will display as a separate line in the journal. The amount posted is the tax exclusive value. If the credit was cloned from an original sales order all the same sales nominal codes will be used in order to reverse the original postings.

Receive inventory (JJ journal)

These are the accounting entries made when inventory is received back into stock on a sales credit:

Stock/inventory

This nominal code is selected from the product record. The amount posted is the value of inventory returned to stock, which is calculated using the current cost price of the item.

Purchases (also known as cost of sales)

The purchases amount is equal to the value of the items returned.

Refunding (SR journal)

When a customer is refunded the following journal is created:

Debtors control account

This account is always used and cannot be changed, this entry will balance against the amount posted when the sales credit is credited.

Bank account

The bank account is selected at the point of processing the refund in Brightpearl.

Allocating on-account payments/credits to orders (SR journal)

Allocating will match on-account payments, credits and invoices against one another so that they are no longer considered outstanding. Allocating doesn't change the customer account balance. Allocation works by placing the relevant reference against the amount in the journal. When you ask Brightpearl to match an on-account payment with an invoice it will post this journal in order to put the invoice reference against the payment, therefore matching them together:

When an on-account credit is allocated to an invoice this type of journal will be posted: