Accounting Basics
Here's the secret most business owners are relieved to hear: in MGH Books, you're already doing accounting just by billing customers and recording expenses. Every invoice, bill and payment quietly posts the correct double-entry behind the scenes — no debits and credits to memorise, no ledgers to write by hand. This guide explains what's happening under the hood, and where your accountant can find the formal books when they want them.
Read this first — you don't need to "know accounting"
- Accounting happens automatically. Raise an invoice → income and a receivable are recorded. Record a bill → an expense/asset and a payable. Log a payment → cash/bank moves. You just run your business; the books keep themselves.
- It's proper double-entry. Every transaction posts equal debits and credits, so your statements always balance — but you never have to think in those terms.
- The formal books are always available. Trial Balance, General Ledger, Journal Register, Day Book — all built live for your CA, with nothing to prepare.
- Accountants can still post manual entries (adjustments, opening balances, depreciation) when they need to.
- Your books are only as right as your entries. Record sales, purchases and payments faithfully and the accounting takes care of itself.
- Enter opening balances once (capital, party balances, stock) so your very first Balance Sheet and Trial Balance are exact.
- Manual Journal Entries & the General Ledger are Samridhi+. The automatic accounting behind your documents works on every plan.
- It's a record-keeping tool, not a substitute for a CA. For audits, filings and judgement calls, work with your accountant.
How a transaction becomes accounting
| When you… | MGH Books automatically records… |
|---|---|
| Raise a sales invoice | Sales income, output GST, and a receivable from the customer |
| Record a purchase bill | Purchase/stock, input tax credit, and a payable to the vendor |
| Log an expense | The expense head and the cash/bank reduction |
| Receive a payment | Cash/bank increase and the receivable cleared |
| Pay a vendor | Cash/bank decrease and the payable cleared |
Behind each of these sits a balanced journal entry — you simply never have to write it.
For accountants — the formal books
Manual Journal Entries Samridhi+
Need an adjustment, accrual, depreciation or opening entry? Post a Journal Voucher (auto-numbered JV-0001…): add a date, a narration, and the debit/credit lines. The voucher must balance (total debit = total credit) before it saves.
help-shots/ab-01-journal.pngGeneral Ledger Samridhi+
The General Ledger shows every account (sales, a specific customer, cash, GST…) with its transactions and a running balance — the account-by-account view auditors love.
help-shots/ab-02-ledger.pngWhere to see your books
All the standard books live under Reports:
- Day Book — every transaction in date order.
- Journal Register — all journal entries.
- General Ledger — account-wise with running balances.
- Trial Balance — all balances; debits = credits.
- P&L & Balance Sheet — the final statements.
help-shots/ab-03-trialbalance.pngReal situations
📖 A shop owner who "doesn't do accounts"
Suresh just bills customers and records his purchases. He's never written a ledger — yet at year-end his CA pulls a complete Trial Balance and Balance Sheet straight from MGH Books, because every entry was posted automatically as he worked.
📖 A CA posting an adjustment
At year-end Suresh's CA needs to book depreciation. On Samridhi, she posts a Journal Voucher (debit Depreciation, credit the asset), it balances, and it flows into the P&L and Balance Sheet.
📖 Checking one account
To see exactly what a customer was billed and paid, she opens that account in the General Ledger and reads the running balance line by line.
Words you'll see, in plain language
| Term | What it means |
|---|---|
| Double-entry | Every transaction affects two accounts equally (one debit, one credit) so the books always balance. |
| Debit / Credit | The two sides of every entry. You don't need to set these manually for normal documents. |
| Journal / Voucher | A recorded entry; a manual one is a Journal Voucher (JV). |
| Ledger | All transactions for one account, with a running balance. |
| Trial Balance | A list of every account's balance; total debits must equal total credits. |
| Narration | A short note explaining a journal entry. |
| Opening Balance | Starting balances you carry in when you begin using MGH Books. |
Troubleshooting
| What you see | Why | What to do |
|---|---|---|
| Journal won't save | Debits don't equal credits | Adjust the lines so totals match, then save |
| Balance Sheet shows a "balancing figure" | Opening balances not entered | Post opening balances (capital/parties/stock) |
| Can't find Journal / General Ledger | They're Samridhi+ | Upgrade; the automatic accounting still works on every plan |
| A figure looks off in the statements | A missing or mis-entered transaction | Trace it via Day Book / the account's ledger |
Best practices
- Record transactions as they happen — the books stay current automatically.
- Enter opening balances once at the start for exact statements.
- Use narrations on manual journals so they're self-explaining later.
- Review the Trial Balance monthly as a quick health check.
FAQ
Do I need to know debits and credits?
No. For normal billing and expenses, MGH Books posts the correct entries for you. Debits/credits only appear if you choose to post a manual journal.
Where are my ledgers?
Under Reports — Day Book, Journal Register, General Ledger and Trial Balance. See CA Reports.
How do I enter opening balances?
Set party opening balances on the party, item opening stock on the item, and post an opening Journal for capital/other balances (Samridhi+).
Is this real accounting my CA can rely on?
Yes — it's standard double-entry and produces Trial Balance, P&L and a Schedule III Balance Sheet your CA can work from.
- Sales / Purchases / Payments → auto-post the entries behind your documents.
- Parties & Items → opening balances and stock.
- Reports → Trial Balance, Ledger, Journal Register, P&L, Balance Sheet — see CA Reports.
📸 Screenshot capture checklist
Drop each PNG into help-shots/ with the exact filename and it appears automatically.
| # | Screen to capture | Save as |
|---|---|---|
| AB-01 | Journal Voucher form (debit/credit lines) | help-shots/ab-01-journal.png |
| AB-02 | General Ledger for an account | help-shots/ab-02-ledger.png |
| AB-03 | Trial Balance (debits = credits) | help-shots/ab-03-trialbalance.png |
Tip: use a populated demo company so ledgers and the trial balance look realistic.