Transactions and operations

You’ll need: Transactions, Cash accounts, Expense accounts — if you cannot see these, the module may be switched off for your business or outside your permissions. An administrator can change either.

Every movement of money is a transaction. Understanding how one is built explains most of what you will meet in this course.

A transaction holds operations

A transaction is not a single amount with a single purpose. It carries a list of operations, each with its own type, amount and references.

That is why one customer transfer can settle three invoices: the transaction is the money that moved, and the operations are what it was for.

   TRANSACTION  one payment received, 150,000
     op 1  invoice_payment   60,000  -> INV-2608-0041
     op 2  invoice_payment   50,000  -> INV-2608-0052
     op 3  invoice_payment   40,000  -> INV-2608-0063

Recording it as three separate transactions would be three fictions where one real event occurred, and your bank reconciliation would then have three entries to match against one line on the statement.

The operation type is what the accounting reads

The type is not a label for humans. It decides how the money is treated in your reports.

An invoice payment settles a receivable. A customer advance is a liability until an invoice exists — the Sales course covered why. A bill payment settles a supplier. An expense is a cost. They are different types because they mean different things, and choosing the wrong one puts the money in the wrong place on your income statement.

If you are unsure which type fits, that is worth asking about rather than guessing. The transaction will look fine either way; the reports will not.

Expense accounts

An expense account has a name and an expense category. It is how spending is classified — rent, fuel, salaries, repairs.

Categorising as you go costs seconds. Categorising a year of transactions in one sitting before an audit costs a weekend and produces worse answers, because by then nobody remembers what the payment on the fourteenth was for.

Every transaction names its account

From the previous lesson: money came from or went to a specific place. That is what lets the transaction be reconciled later.

Nothing is deleted

A transaction entered wrongly is corrected through the change pipeline, not erased. The audit trail from Essentials applies here more than anywhere: for money, who changed what and when is the whole point.

Try it

On staging.feeprime.com, record one payment settling two invoices, then look at how the transaction presents its operations. Then record an expense and give it a category.