Categorizing Journal Entries—Organizing Debits & Credits

It seems like the Journal Entries reference field is used for many purposes—to identify the purpose of the entry (e.g., reclassify payroll expenses), categorize the entry (e.g., audit adjustment) or even note the approver (e.g., per Betty). This is a lot of information to squeeze into 30 characters, which is why, when you look at the detailed trial balance of a seasoned GP user, you’ll find any number of interesting abbreviations—ADT for audit, anyone?

On each GP journal entry, there are actually three fields you can use to describe the entry.

Transactions | Financial | General


As discussed above, there is the “Reference” field. This field, in the header of the journal entry, applies to the entry as a whole, so it should generally be used for descriptions applying to the entire entry.

The next field is the “Distribution Reference.” To display this field, click the “Show Details” icon and enter the distribution reference below the appropriate debit or credit. This description applies to the specific debit or credit, so you could have different distribution references for each line of the entry. This is a great way to enter further detail about the entry, specific to a particular account’s debit or credit.

Hint! Both the Reference and Distribution Reference are available in SmartList for reporting in the General Ledger. Choose Microsoft Dynamics GP | SmartList | Expand Financial | Expand Account Transactions.  Click on the asterisk to select the default SmartList, then click on “Columns” to add or remove columns. Note:  The Distribution Reference field is actually called “Description” in the column list.

Although Reference and Distribution Reference are a great way to track more information about a journal entry, they are not the best way to categorize entries for reporting purposes, because each user might abbreviate or enter information in a slightly different way, making it difficult to pull by category (e.g., all audit entries). This is where the Source Document field can be helpful.

For entries that originate from a subledger (e.g., Bank Transactions, Payables Transactions or Payroll Checks), the source document is automatically set. Though you may be able to see this field for subledger journal entries appearing in the General Ledger Transaction Entry window, you should not change this value, since it may lead you to believe the transaction originated elsewhere.

Transactions | Financial | General

With a subledger entry displayed, do not change the Source Document on subledger transactions.

However, when you make a journal entry directly in the General Ledger, the Source Document field can be used for further categorization. It’s recommended you set up new source document codes for this purpose (Microsoft Dynamics GP | Tools | Setup | Posting | Source Documents). Using existing source document codes can lead you to assume something originated from a subledger when it did not.

Microsoft Dynamics GP | Tools | Setup | Posting | Source Documents


Simply enter a new source document code and description. Then when you enter your journal entry, pick the new source document code; this code will appear in SmartList and on your Financial Trial Balance report.

Transactions | Financial | General


However, there is also a report specifically for pulling entries for a specific source document:  the “Cross Reference by Source Document” report. You can use this report to view entries for a specific source document code and date range (and account, if needed).

Reports | Financial | Cross Reference | Source Document


Source Document codes can be used to identify internal and external audit entries, month-end adjusting entries and journal entry imports from other systems.

For more information regarding source document codes or for assistance in setting up source document codes to meet your needs, contact BKD’s support center at gpsupport@bkd.com.

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