Journal Entries are the manual, double-entry alternative to the standard Add Expense / Add Income flow. Use them for adjustments, accruals, depreciation, owner contributions/draws, and anything else that doesn't fit the everyday transaction model.
When to Use a Journal Entry
Adjusting entries — moving expenses between months, fixing a misclassification across many transactions
Accruals & deferrals — recording revenue earned but not yet invoiced, or expenses incurred but not yet paid
Depreciation — annual write-down of fixed assets
Owner equity — capital contributions, owner draws, partner distributions
Closing entries — year-end income → retained earnings transfers
Anatomy of a Journal Entry
Every journal entry has:
Date — when the entry takes effect
Memo — describes why (this is your future-self trying to remember what you did)
Lines — two or more lines, each with an account and either a debit or credit amount
Balance — total debits must equal total credits. Books won't let you save until they balance.
Creating a Journal Entry
Go to Journal Entries → Create.
Set the date and write a memo explaining the purpose.
Add lines: pick an account, enter a debit or credit amount.
Add more lines until debits and credits balance.
Save.
Reversing Entries
Sometimes you want a journal entry to reverse itself the next period (common for accruals). When creating an entry, check Auto-reverse on: pick a future date, and Books creates a mirror-image entry on that date automatically.
Recurring Entries
For entries you make every month — monthly depreciation, recurring accruals — save the entry as a recurring journal entry. Books generates the entry automatically on the schedule you set. You can review and approve each occurrence, or have them auto-approve.
Journal Entries vs. Transactions
In day-to-day work, prefer Add Expense / Add Income / Add Transfer over journal entries. The standard flow:
Updates your bank balance automatically (debits and credits land on the right accounts without you thinking about it)
Shows up in payee and category reports automatically
Plays nicely with reconciliation
Journal entries DON'T update a bank balance (they're ledger-only). Use them for things that aren't cash movements — adjustments, accruals, and non-cash entries.