Zikpro - Finance Book
A Finance Book is utilized to post all the accounting entries in a structured way.
You can have different finance books—one for reporting to tax authorities and another for internal stakeholders. This is useful when financial numbers such as depreciation must be reported differently for legal requirements or for internal use. It also helps you to keep alternative versions of the balance sheet for different reporting purposes.
Creating a Finance Book is not required. However, if you do decide to set up more than one, you can pick which Finance Book to enter a Journal Entry into. If the Finance Book field is blank, then the entry will go into all finance books by default.
One common application of multiple finance books is for fixed asset depreciation. It is possible for the company to use different depreciation methods (like Straight Line, Written Down Value, or Double Declening Balance) for each Finance Book. You can define specific depreciation schedules for each Finance Book in ERPNext, and depreciation entries will automatically be applied to those schedules.
To access a finance book, go to:
1. How to Setup A Finance Book
1- Enter the name of the finance book. This makes it easier to determine the book's goal (for example, tax reporting or accounting standards).
- For instance: If the book is designed to adhere to IFRS reporting standards for 2024, type "IFRS 2024".
2- If this finance book will be used exclusively for income tax purposes, tick the "For Income Tax" box.
ERPNext uses a special depreciation rule when this is checked, which lowers the depreciation by 50% for the first year if an asset is used for fewer than 180 days.
Many tax laws, particularly those in nations like India, frequently employ this rule.
3- To create and save the Finance Book in the system, click the "Save" button in the upper right corner.
2. Related Topics
Cost Center
Budgeting