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Understanding Docyt's Chart of Accounts

Docyt introduces several specialized accounts to streamline financial operations and enhance accounting automation. The account names within Docyt cannot be edited, as they are structured to support the platform's functionalities and ensure accurate financial tracking.

Accounts Overview

Accounts Payable - Docyt
  • Purpose: Holds invoices until processing decisions are made.
  • Use: Whenever a bill is uploaded in Docyt, it remains in this account until further action is selected. This is part of a double-entry system where one account reflects the expense (e.g., repairs, maintenance) and the other is a balance sheet account named "Accounts Payable - Docyt".

Accrued Liability - Docyt

  • Purpose: This feature accounts for expenses that have been incurred but not yet paid. It reflects obligations that have been accrued by the end of the accounting period but have not yet been settled in cash.
  • Use: Accrued Liability is often used to recognize expenses in the periods they relate to, even if the payment is made in a future period. This ensures that financial statements reflect the true cost and financial status of the business at the end of each period.

Employee Reimbursements - Docyt
  • Purpose: Manages expense reimbursements for employees.
  • Use: Specifically for expense reports submitted by employees through Docyt, ensuring these transactions are tracked separately from other types of payables.
Inter-Company Settlement Bank - Docyt
  • Purpose: Facilitates settlements and transfers between company divisions.
  • Use: Used to settle and close inter-company Bills by moving the balance into a liability account.
Owner's Investment - Docyt and Owner's Withdrawal - Docyt
  • Purpose: Track equity transactions for business owners.
  • Use: These are default accounts that are selected for owner's investments and withdrawals.
Payroll Liability - Docyt
  • Purpose: Records liabilities associated with payroll transactions.
  • Use: This is a default liability account that is selected for booking any payroll charges in the bank. Payroll journal entries that record payroll expenses also use this default liability account.

Prepaid Expense - Docyt

  • Purpose: Manages expenses paid in advance of the period in which they will be expensed. This feature ensures that payments made for future periods are properly recorded and recognized.
  • Use: Prepaid expenses are utilized to defer the recognition of expenses to match them with the revenue they help to generate in future periods. This is essential for adherence to the matching principle of accounting, ensuring that expenses are recorded in the same period as the revenues they help to produce.

Revenue Receivables - Docyt
  • Purpose: Accounts for daily sales entries on an accrual basis.
  • Use: Used to temporarily hold discrepancies in daily revenue until the correct allocations can be determined, acting as a catch-all for uncertain payment processor allocations.