Accounting Overview

Why Accounting Exists In Supply Weave

Business teams think in events: goods arrive, a supplier sends a bill, stock leaves, a customer is invoiced, and cash moves. Accounting turns those events into a consistent financial record so the business can answer three basic questions:

What does the business own and owe?
Did the business earn a profit or make a loss during a period?
Where did cash and bank activity come from and where did it go?

Supply Weave connects operational work to that financial record. The connection is important because a sales or procurement document explains the business event, while its journal explains the financial effect.

The Mental Model

Use this sequence whenever you investigate a number:

Business activity -> document -> posting -> journal -> report

Business activity: Something happens in the real business, such as receiving inventory or collecting a customer payment.
Document: An ADMIN records the event in the appropriate business document, such as a Goods Receipt Note or Customer Receipt. The document carries business meaning, dates, parties, quantities, and amounts.
Posting: The document reaches the action or status that has an accounting effect. Merely creating a draft does not guarantee a journal exists.
Journal: The accounting effect appears under Journal Entries as debit and credit lines. Every valid new journal must have equal debit and credit totals. If retained historical data is malformed, reports preserve and flag the imbalance instead of silently repairing it.
Report: Accounting reports summarize those journal lines by account and date.

When a report looks wrong, work backwards through the same chain. Open the relevant account in General Ledger, inspect the journal, identify its source document, and then compare that document with the real business evidence.

Posted Data Only

Accounting reports are generated from posted ledger transactions. A draft, unconfirmed, unreceived, undispatched, or otherwise incomplete document may be visible in an operational list while still having no accounting effect.

This distinction protects reports from unfinished work, but it creates an important operator responsibility: reports cannot reveal a real transaction that was never entered or a document that never reached its posting step.

Examples:

A draft Supplier Bill is not yet an accounts-payable posting.
A Commercial Invoice affects accounting when it is posted, not merely because it was created.
A payment made outside Supply Weave does not appear until the appropriate settlement document is successfully created. Creation is the posting action for Supplier Payments and Customer Receipts.
A CA adjustment does not appear in reports until it is posted through a journal.

Warning: “Balanced” does not mean “complete,” “correct,” or “audited.” A missing transaction can leave both debit and credit missing, so the remaining ledger may still balance perfectly.

Who Is Responsible For What

The Application

Supply Weave is responsible for applying its configured workflow controls, generating supported journals from posted documents, preserving journal history, and calculating reports from posted ledger activity. It also keeps visible reconciliation differences and warnings that require attention.

The application does not observe the real world. It cannot know that a delivery, invoice, bank transfer, tax obligation, accrual, or other event is missing unless a user records it or a control detects an inconsistency in existing data.

The ADMIN Operator

The ADMIN operator is responsible for:

entering complete, accurate documents from reliable source evidence;
checking dates, parties, quantities, currencies, rates, and amounts;
completing the intended workflow so accounting events are actually posted;
reviewing Journal Entries, reports, warnings, and unusual balances;
comparing application records with supplier, customer, inventory, cash, and bank evidence;
retaining approvals and supporting documents; and
asking the CA before entering an accounting treatment that is unclear.

The operator should not invent an account, date, or adjustment merely to make a report look expected.

The Business And Chartered Accountant

The business and its CA are responsible for professional judgments and external obligations, including accounting policy, account classification, cutoff, tax and VAT, depreciation, accruals, provisions, approved adjustments, statutory disclosures, audit procedures, and filing. The CA reviews the evidence and reports; the application does not replace that review.

How The Main Screens Fit Together

Journal Entries shows system-generated accounting entries and their lines.
Manual & Adjustment Journals records approved accounting entries that do not arise automatically from an operational workflow.
General Ledger shows activity and running balance for an account or account group.
Trial Balance summarizes opening balances, period debits and credits, and closing balances. It is the main check that recorded debits equal recorded credits.
Profit & Loss summarizes posted revenue and expenses for a period.
Statement of Financial Position shows posted assets, liabilities, and equity at a date.
Receipt & Payment summarizes posted activity in accounts classified as cash or bank for a selected month.

Warning: Receipt & Payment is not a bank reconciliation. It summarizes posted cash and bank activity, but it does not match the application balance to a bank statement, identify timing differences, or prove that every bank transaction was recorded.

One Business Cycle At A Glance

The continuing example in these guides uses these facts:

Inventory is purchased for BDT 100,000.
The supplier is billed and then paid BDT 100,000.
All inventory is dispatched to a customer.
The customer is invoiced and then pays BDT 150,000.
Tax, VAT, bank charges, foreign currency, and opening balances are excluded so the accounting path stays clear.

The operational and accounting flow is:

Business activity	Application document	Main financial effect
Receive inventory	Goods Receipt Note	Inventory increases; goods received but not invoiced increases
Record supplier bill	Supplier Bill	The temporary receipt liability clears; accounts payable increases
Pay supplier	Supplier Payment	Accounts payable and bank decrease
Dispatch inventory	Delivery Challan	Cost of sales increases; inventory decreases
Invoice customer	Commercial Invoice	Accounts receivable and revenue increase
Collect customer payment	Customer Receipt	Bank increases; accounts receivable decreases

After the complete cycle, the BDT 100,000 inventory cost has become cost of sales, the BDT 150,000 sale has become revenue, supplier and customer balances are cleared, and the cycle contributes BDT 50,000 gross profit before other expenses and taxes. The detailed debits, credits, and report effects are in Accounting Basics.

Return to the Accounting User Guides index.

Reviewed against the application on: 2026-08-21