Why Double Entry Is Important?

Importance of Double Entry System Importance of Double Entry System

Accounting is an important function in any business. Through accounting we can keep a complete track of income as well as expenses borne in a business. Accounting is the foundation of any financial analysis. There are mainly 2 types of accounting processes:

  • Single-entry system
  • Double-entry system

The double-entry system is more beneficial than the single-entry system. This is the reason behind the wide acceptance of double accounting system all over the world.

What is double-entry system?

The double-entry system is a system of bookkeeping. Here every financial transaction is recorded in at least 2 different accounts. In the general ledger, each credit is offset by a debit. If we put it simply, every transaction for a credit and debit entry are noted in different accounts.

For example, you drank tea during some office work and paid through cash payment or paid for a rickshaw to go somewhere. Now in accounts, you will show credit of this money in the office account and debit in the cash account. In the double-entry system, both credit and debit have to be entered for every transaction. Credit entries are those transactions that bring money into the account. Whereas every payment done is recorded in the debit section. In a nutshell, the amount of entry in both credit and debit accounts should be equal.

Take a look at this table to understand:

Representation of double entry system
Representation of double entry system

Benefits of double-entry system

There are many advantages of a double-entry system such as:

  • The accounting is accurate.
  • You can enter the details of all your transactions.
  • With all transactions recorded, it is easy to reconcile later.
  • You can easily look at the outstanding amount.
  • Tax payment is also easy.
  • Any fraud can be easily detected.
  • It simplifies year-to-year financial analysis.

Importance of double-entry system

Generally, we mix up debit and credit which makes it difficult to keep track. But this is not the case in the double-entry system. In this, debit and credit are entered separately. This is the reason that even though initially it may seem a task to enter every transaction but these small expenses add up to be a big amount at the end of the month. With the double-entry system, you not only get the accurate amount of transactions but also get to know about your expenses.

Double-entry on ChargeERP

Go to the Journal section on the dashboard of ChargeERP. Here you will find information about ‘Date’, ‘Unique ID’, ‘Transaction Type’, ‘Account Name’, ‘Amount Withdrawn’, ‘Amount Deposited’ and ‘Short Description’. On the footer, information about ‘Total Debit Amount’ and ‘Total Credit Amount’ will be displayed.

If you want to make a new journal entry then click on the ‘New Record’ button. The ‘Add New Journal’ form will open. Here you will have to fill information such as ‘Date’, ‘Dr/Cr’, ‘Account Name’, ‘Amount’ and ‘Short Description’. Fill these details and click on the save button and the entry is recorded.

You can easily record Double entry on ChargeERP. All the information, all the records are not only safe, but the accounts are also equal.

Why ChargeERP?

The facility of double entry is provided by almost every accounting software. Then the question is why ChargeERP? So here is the answer. ChargeERP is an offering by Bijak which is India’s Number 1 Agritrading App. It is a mandi accounting software that has been designed after multiple rounds of interaction with commission agents to solve their problems.

There are many benefits of it –

  • Remotely access the software
  • Have 100% control over the data
  • Guarantee of data security
  • Manage the team from anywhere
  • Get support in regional languages
  • Use on multiple devices
  • Manage inventory easily
  • Share bill & reports on WhatsApp
  • Extract detailed reports
  • Download bills and reports easily

ChargeERP is the solution

ChargeERP accounting software has been designed keeping in mind the daily interactions of commission agents in agricultural mandis. It is a cloud-based accounting software introduced with the core aim of reducing the agent’s workload. ChargeERP is the easiest, fastest and most secure mandi accounting software available in India. One of the many benefits of this platform is that it can be accessed from anywhere and from multiple devices. It provides data security with end-to-end encryption. Plus, it doesn’t require any kind of technical or accounting expertise.

If you are looking to explore more about this next-level accounting software, feel free to dial +91 9311341199 or visit www.chargeerp.com, and request your free demo today. We also suggest that you follow us on Facebook for regular updates. You can also view the latest instructional videos on the ChargeERP YouTube channel.