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What are journal entries? Discover types and how to optimize management

What are journal entries? Discover types and how to optimize management

By Anaraya Albornoz

Published: May 6, 2025

Accounting is the discipline that makes it possible to codify and keep track of a company's daily financial operations. The accounting entries constitute a record of all operations.

It is a mandatory process for the fulfillment of legal obligations and the growth of the company. This implies respecting a certain number of rules regarding presentation, calculation and format. Here are some basic concepts, as well as some tools to make accounting entries in just a couple of clicks.

What are journal entries?

An accounting entry is an operation that consists of recording a commercial, economic or financial flow within the company. The entries are kept in a document known as a journal.

From the accounting entries, the rest of the processes that make up a company's accounting are built.

Journal entries are the basis of accounting, in effect accounting for every financial transaction.

Accounting entry: debit and credit

Basically, it is composed of 2 parts:

Debit

It records any financial movement received by a company or an account, it is recorded on the left side of the table.

Credit

It records any financial movement that leaves a company or an account, it is recorded on the right side.

Debit credit
150€ 115€
50€ 35€
Balance Balance
200€ 150€

Types of accounting entries

According to the fund

This classification takes into account the type of transaction recorded. In this regard, most experts agree that there are 7 types of journal entries:

1. Opening entry

The opening entry refers to the first entry made at the beginning of a new fiscal year .

2. Operating entries

It regroups the recording of all the accounting operations that have taken place in the company during a fiscal year.

3. Adjusting entries

These are the entries made at the end of the fiscal year, just before the presentation of the balance sheet. The purpose is to present the accuracy of the accounts, taking into account all circumstances that may have given rise to changes in the balance of the accounts, for example: forgetting to record a transaction or depreciation.

4. Adjustment entry(s)

The regularization entry or entries are the records that make it possible to settle the accounts for the fiscal year and to classify the operations as expense or income (profit or loss).

5. Closing entry

This is the last entry of the fiscal year, it cancels all the accounts that have a balance. These entries definitively close the accounting for the fiscal year.

According to the form

6. Simple accounting entries

Only two accounting accounts are involved: debit and credit.

7. Compound accounting entries

More than one accounting account is involved in the debit, credit or both.

How to make accounting entries?

To make an accounting entry, the first step is to draw up a General Chart of Accounts. Indeed, the GAP indicates the guidelines for keeping the company's accounts correctly.

It defines the "details of the nomenclature to be used for keeping the accounts, in particular for keeping the journal and the general ledger".

From there on, it is all a matter of a rigorous and accurate registration of each of the company's financial operations according to Spanish law.

Today's accountants are very lucky compared to the accountants of a few years ago. Technology offers numerous possibilities when it comes to automating tasks, calculations and processes.

Accounting automation: definition

Accounting automation involves eliminating manual processes and replacing them with automated processes through the use of an IT tool.

Automation encompasses processes such as:

  • Accounting registration: invoice entry, entry of accounting entries, entry of bank statements, entry of payrolls.

  • Dematerialization of invoices (becomes a legal obligation).

  • Establishment of the balance sheet and income statement.

  • VAT management.

The automation of repetitive processes avoids errors due to manual entry and frees up time for higher value-added tasks. In addition, it participates in the automatic generation of reports and reports and is synchronized and updated with other business processes:

  • Payroll management.

  • Editing budgets and invoices.

Example: the accounting software is able to "read" a scanned invoice, identify relevant information such as quantity, customer name, date, etc. and automatically process the invoice processing.

Optimize your accounting processes

To offer the best service to customers, you must dedicate as much time as possible to business development.

Implementing a simple solution to manage accounting is a guarantee of peace of mind.

Online solutions are at your disposal to simplify the task and speed up management. In addition to maintaining control of the entire chain over time, you can work from a secure environment and comply with legislation.

Article translated from Spanish