Transactions and operations

Before you start, open these. They are all under Cash in the menu: Transactions, Cash Accounts and Expense accounts.

Can’t find one? It may be turned off for your business, or your account may not be allowed to open it. Ask the person who set up your FeePrime. They can fix both.

Every movement of money is a transaction. Understanding how one is built explains most of this course.

A transaction holds operations

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

That is why one payment from a customer can settle three invoices. The transaction is the money that moved. 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 that as three separate transactions would be three made-up events where one real one happened. And then your bank check would have three entries to match against one line on the statement.

The 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 what a customer owed. A customer advance is money you are holding until an invoice exists, which the Sales course covered. A bill payment settles a supplier. An expense is a cost.

They are different types because they mean different things. Pick the wrong one and the money lands in the wrong place on your profit report.

If you are not sure which type fits, ask rather than guess. The transaction will look fine either way. The reports will not.

Expense accounts

An expense account has a name and a category. It is how your spending gets sorted. Rent, fuel, wages, repairs.

Sorting it as you go costs seconds.

Sorting a year of payments in one sitting before an audit costs a weekend, and gives worse answers. By then nobody remembers what the payment on the fourteenth was for.

Every transaction names its account

From the last lesson. Money came from, or went to, a specific place.

That is what lets you check the transaction against your bank later.

Nothing is deleted

A transaction entered wrongly gets corrected through the normal change process. It is not erased.

The audit trail from Essentials matters here more than anywhere else. With money, who changed what and when is the whole point.

Try it

On staging.feeprime.com, record one payment that settles two invoices, then look at how the transaction shows its operations.

Then record an expense and give it a category.