A journal entry is a single record of a transaction with matching debits and credits. This guide explains what they are and when manual journals are needed.
Published July 2026 · Updated July 2026
A journal entry records one transaction, showing which accounts it affects and the matching debit and credit amounts. It is the raw 'this happened, and here is how it hits the accounts' note.
When you raise an invoice or record a payment, software creates the journal for you behind the scenes. Manual journals are reserved for things software cannot infer, such as spreading a cost over time, recording depreciation, or fixing an error.
Because each journal has equal debits and credits, the books never drift out of balance. If a manual journal does not balance, the software will not let you post it.
Recording £1,200 of rent paid from the bank:
For adjustments like accruals, prepayments, depreciation, or to correct a miscoded transaction.
Yes. A journal can affect several accounts at once, as long as total debits still equal total credits.
They can. Be careful with manual journals that touch VAT accounts, as they can change what appears on your VAT return.
Source: Investopedia ↗. This glossary is written for small business owners, so definitions are simplified. Tax rates and thresholds reflect 2026/27 UK rules and change over time. Berified does not provide accounting, tax or legal advice; always check the source or a qualified adviser.