What is a journal entry?

A customer pays an open invoice. Money arrives in your bank account and, at the same moment, the customer no longer owes you anything. In the books this is recorded as one booking: the amount is added to the bank and taken off the debtor. That one booking, with its two sides, is the journal entry.

Each entry carries a date, a description and a reference to the evidence, such as an invoice number. Entries are gathered in journals, for example one for sales, one for purchases and one for the bank. That lets you look back by type at what happened. The entries feed the general ledger.

What goes wrong? A booking on the wrong account, an amount entered twice, or an entry with no clear description. These mistakes often surface only months later, when the accountant asks why a balance does not agree. Then someone has to go back through the bookings.

A few habits help. Book as close to the event as you can, with a description that someone else can follow. Do not quietly change an existing entry; correct it with a new one, so that the history stays visible. For corrections you decide on yourself, such as spreading an annual cost, an accountant uses an adjusting entry.

A booking whose two sides do not balance is usually refused by a good system in the first place. Manual booking will always be needed, but it should be the exception. The more bookings that arise by themselves from invoices and bank transactions, the fewer the mistakes and the faster the month-end close is done.