Journal Entries¶
Target Audience: Users, Stakeholders
Introduction¶
Every financial event in Payway produces one or more journal entries — double-entry bookkeeping records that document exactly what happened financially. Journal entries are the core output of the bookkeeping module.
All journal entries are exported to Engage BI, where they are normalised and accessible through SQL. This allows publishers to build custom reports, dashboards, and accounting exports based on the full journal data.
Monthly Journals¶
Journal entries are grouped into monthly journals — one per subscription per month. A journal for January 2026 contains all entries for that subscription during that month. When a new financial event occurs, the entry is added to the journal for the event's month. If a customer has multiple subscriptions, each subscription has its own separate journal.
Entry Types¶
Each journal entry has an entry type that identifies what kind of financial event produced it. This allows filtering and grouping entries for reporting and export purposes.
Online Subscription Payment¶
When a customer pays for a subscription with a credit card or other online payment method, a PSP receivable is created against the payment provider and the net amount is recorded as deferred income:
| Account | Debit | Credit | |
|---|---|---|---|
| DR | PSP Receivable (1580) | 99.00 | |
| CR | Deferred Income (2990) | 79.20 | |
| CR | VAT Output (2610) | 19.80 |
The PSP receivable represents money owed by the payment provider (e.g., Adyen) to the publisher. This is kept separate from customer receivables (1510) used for invoices, so that publishers can reconcile payment provider settlements independently — the difference between the PSP receivable and the actual bank settlement is the payment provider's fee. The net amount (excl. VAT) becomes deferred income — a liability representing the obligation to deliver the subscription service. VAT is recorded separately.
Online Article Payment¶
When a customer purchases a single article with a credit card or other online payment method, the revenue is recognised immediately (not deferred) since the article is delivered at the time of purchase:
| Account | Debit | Credit | |
|---|---|---|---|
| DR | PSP Receivable (1580) | 50.00 | |
| CR | Revenue (3001) | 40.00 | |
| CR | VAT Output (2610) | 10.00 |
The key difference from subscription payments is that articles credit the Revenue account directly, not Deferred Income. The article provides immediate value to the customer, so no performance obligation remains after purchase. The revenue account used depends on the accounting profile assigned to the package.
Invoice Sent¶
When an invoice is sent to a customer (for invoice-paid subscriptions), a receivable is created:
| Account | Debit | Credit | |
|---|---|---|---|
| DR | Accounts Receivable (1510) | 99.00 | |
| CR | Deferred Income (2990) | 79.20 | |
| CR | VAT Output (2610) | 19.80 |
The receivable represents money owed by the customer. Deferred income is created at the same time — the revenue recognition obligation begins when the invoice is sent, not when payment is received.
Invoice Payment Received¶
When the customer pays an invoice, the receivable is reduced:
| Account | Debit | Credit | |
|---|---|---|---|
| DR | Bank (1930) | 99.00 | |
| CR | Accounts Receivable (1510) | 99.00 |
The money moves from "owed to us" (receivable) to "in our bank". No deferred income is affected because that was already recorded when the invoice was sent.
Revenue Recognition¶
Revenue recognition entries convert deferred income into earned revenue:
| Account | Debit | Credit | |
|---|---|---|---|
| DR | Deferred Income (2990) | 3.30 | |
| CR | Revenue (3001) | 3.30 |
These entries are created daily for time-based subscriptions, or on distribution dates for issue-based subscriptions. The revenue account used depends on the accounting profile assigned to the package.
Credit¶
When a credit is issued on an invoice, reversal entries are created. The exact entries depend on how much revenue has already been recognised at the time of the credit.
Credit before revenue recognition (e.g., credit on day 1):
| Account | Debit | Credit | |
|---|---|---|---|
| DR | Deferred Income (2990) | 79.20 | |
| DR | VAT Output (2610) | 19.80 | |
| CR | Accounts Receivable (1510) | 99.00 |
The full net amount is reversed from deferred income because no revenue had been earned yet.
Credit after partial revenue recognition (e.g., credit on day 10 of a 30-day subscription):
| Account | Debit | Credit | |
|---|---|---|---|
| DR | Deferred Income (2990) | 52.80 | |
| DR | Revenue (3001) | 26.40 | |
| DR | VAT Output (2610) | 19.80 | |
| CR | Accounts Receivable (1510) | 99.00 |
The credit amount is split proportionally between deferred income (for the unearned portion) and a revenue reversal (for revenue that was already recognised but is no longer earned due to the credit). This follows IFRS 15 principles.
Refund¶
When an online payment is refunded (e.g., through Adyen), the entries follow the same proportional split logic as credits. The example below shows a refund before any revenue has been recognised:
| Account | Debit | Credit | |
|---|---|---|---|
| DR | Deferred Income (2990) | 79.20 | |
| DR | VAT Output (2610) | 19.80 | |
| CR | PSP Receivable (1580) | 99.00 |
If revenue has already been partially recognised at the time of the refund, the debit side is split between deferred income and a revenue reversal — the same way as for credits.
The refund reduces the PSP receivable (money owed by the payment provider). The payment provider handles the actual return of funds to the customer.
Reconciliation Payment¶
Reconciliation payments are manual adjustments — see Special Payments for full details. The clearing account used depends on whether the adjustment is internal or external:
Internal reconciliation (e.g., upgrade/downgrade fund transfer):
| Account | Debit | Credit | |
|---|---|---|---|
| DR | Internal Clearing (2998) | 52.80 | |
| CR | Deferred Income (2990) | 52.80 |
External reconciliation (e.g., recording a direct bank transfer):
| Account | Debit | Credit | |
|---|---|---|---|
| DR | External Clearing (2999) | 99.00 | |
| CR | Deferred Income (2990) | 99.00 |
Negative reconciliation payments reverse the entries (DR Deferred Income, CR Clearing).
Reading a Journal Entry¶
In Engage BI, each journal entry is represented as a set of rows — one per line (post). Each entry records the date, entry type, and one or more lines. Each line contains:
| Field | Description |
|---|---|
| Account | The financial account affected (from the chart of accounts) |
| Debit | Amount added to the account (assets increase, liabilities decrease) |
| Credit | Amount removed from the account (assets decrease, liabilities increase) |
The golden rule: In every journal entry, the sum of all debits equals the sum of all credits. This invariant can be verified in Engage BI by grouping posts by entry and checking that debits and credits sum to the same amount.
Debit and credit conventions
- Assets (bank, receivables) increase with debits and decrease with credits
- Liabilities (deferred income, VAT) increase with credits and decrease with debits
- Revenue increases with credits and decreases with debits (reversals)
Related Pages¶
- Bookkeeping Overview — how the bookkeeping module works
- Revenue Recognition — how deferred income converts to revenue
- Accounting Profiles — configuring which revenue accounts are used
- PSP Settlement Reconciliation — how to clear PSP receivables and account for payment provider fees