Manual journal

A manual journal is the bookkeeper’s last resort and most powerful tool. Where every other Xero transaction flows through a document — an invoice, a bill, a bank line — a manual journal writes directly to the ledger. It must still obey double-entry rules: debits must equal credits, or Xero will not let you save it. A typical use is the month-end accrual: debit Wages Expense £3,200, credit Accruals Creditor £3,200, to recognise payroll costs in the period they were incurred before the payroll run settles the following week.

Common reasons to raise one in Xero

Manual journals are used to reverse a previous accrual once the real invoice arrives, write off a balance in a suspense account, reclassify an amount posted to the wrong code, or record a depreciation charge that no automated rule handles. Xero supports both one-off and repeating journals, so predictable adjustments — monthly depreciation on a £12,000 asset, say — can be set up once and run on a schedule.

Because manual journals bypass the normal document workflow, they are harder to audit than invoices or reconciled bank lines. Most practices stamp each journal with a narration explaining why it was raised, which saves significant time when an accountant reviews the ledger at year-end.