Fortax Journal Entry

Journal entry preparation

Needs Python 3 and internet: runs scripts/fortax.py (the Fortax engine on ai.fortax.in; your file is processed and not stored).

Prepare journal entries with debits, credits, narration, supporting working and review documentation. This skill helps prepare entries; the CA or the client's accountant reviews and posts them. Never post to the accounting software yourself.

What to ask for

• Type of entry (below) and the period (e.g. 2026-08, Q2 FY 2026-27, FY 2026-27).
• Data: the trial balance or ledger balances for the affected accounts (Tally/Busy/Zoho export, .xlsx/.csv, or pasted), the supporting schedule (fixed asset register, salary register, prepaid list, contracts, bills received after period end), and last period's entries of the same type if any.
• The client's ledger names from their ledger list or TB — entries use the client's names, not generic ones. A ledger that does not exist is listed for the CA to create.

Look in <Client>/<FY>/ or wherever the CA dropped files. If something is missing, say what, and prepare what the evidence supports.

Step 1 — calculate the entry (in a workbook with formulas or a short script, never mentally)

Expense accrual / provision for expenses (goods or services received, bill not yet booked):

• Identify from bills received after period end, POs/GRNs, contracts, or recurring monthly charges.
• Dr the expense (or the asset, if capital) / Cr Outstanding Expenses or the party.
• Where TDS applies on credit to the party's account or payment, whichever is earlier, the TDS is due on the provision too when the payee is identifiable — flag it. Section and rate: python3 scripts/fortax.py kb "TDS on provision for expenses year end" --topics tds.

Depreciation and amortisation:

• From the fixed asset register: asset class, cost, put-to-use date, useful life, residual value, method.
• Companies Act: Schedule II useful lives, SLM or WDV, pro rata from the put-to-use date. Income-tax: block-wise WDV rates, half rate for assets put to use for under 180 days in the year — a separate working, not a book entry.
• Dr Depreciation (by class or cost centre) / Cr the asset or Accumulated Depreciation.

Prepaid expenses:

• From the prepaid schedule (insurance, AMC, software subscriptions, rent paid in advance).
• Period amortisation = amount x months elapsed / months covered.
• Dr the expense / Cr Prepaid Expenses. At payment: Dr Prepaid Expenses / Cr Bank.

Salary and payroll provisions:

• Salary for days worked but unpaid; employer PF and ESI contributions; bonus (Payment of Bonus Act, where applicable); leave encashment and gratuity (AS 15 / Ind AS 19 — actuarial valuation where required); professional tax deducted.
• Dr Salaries & Wages, Contribution to PF & ESI, Bonus, Gratuity / Cr Salary Payable, PF Payable, ESI Payable, PT Payable, TDS Payable - 192, Provision for Bonus/Gratuity.
• Flag s.43B (Income-tax Act, 1961): employer contributions, bonus and leave encashment are allowed on payment; employees' PF/ESI contribution must be deposited by the due date under that law (s.36(1)(va)). From tax year 2026-27 the Income-tax Act, 2025 applies — confirm the section via kb. Detail of the payroll run: fortax-payroll-monthly-run.

Revenue:

• Review contracts and what has been delivered or performed (AS 9 / Ind AS 115).
• Unbilled revenue: Dr Unbilled Revenue / Cr Sales or Service Income.
• Advance billed but not earned: Dr Sales / Cr Income Received in Advance.
• GST follows the time of supply rules, not the accounting accrual — note the difference for 3B.

GST entries (common in rectifications):

• Purchase: Dr Expense/Asset, Dr Input CGST/SGST/IGST / Cr party.
• Sale: Dr party / Cr Sales, Cr Output CGST/SGST/IGST.
• Reverse charge: Dr Expense, Dr Input GST (RCM) / Cr party (net), Cr Output GST (RCM) Payable.
• Monthly set-off: Dr Output GST / Cr Input GST, Cr Electronic Cash Ledger or Bank for the cash portion. Ineligible credit (s.17(5) CGST Act) goes to the expense or asset, not to input.

TDS on payments to others:

• Dr Expense (gross) / Cr party (net), Cr TDS Payable - <section>; on deposit Dr TDS Payable / Cr Bank.

Rectification entries (from a BRS or reconciliation): reverse the wrong posting and pass the right one, or a single net correcting entry; the narration names the original voucher number and date.

Step 2 — present the entry

Journal Entry: [Type] — [Period]
Company: Sharma Traders Pvt Ltd
Prepared by: [name]          Date: [period end date, e.g. 31-03-2027]

| Line | Ledger                    | Group            | Dr (Rs)  | Cr (Rs)  | Cost centre | Narration |
|------|---------------------------|------------------|----------|----------|-------------|-----------|
| 1    | Audit Fees                | Indirect Expenses| 1,00,000 |          | HO          | Statutory audit FY 2026-27, engagement letter dated ... |
| 2    | TDS Payable - 194J        | Duties & Taxes   |          | 10,000   |             | TDS on audit fee provision |
| 3    | Outstanding Expenses      | Current Liabilities|        | 90,000   |             | Audit fee payable |
|      | Total                     |                  | 1,00,000 | 1,00,000 |             |           |

Supporting working: [basis, assumptions, the schedule or document it comes from]
Reversal: [Yes/No — if yes, the reversal date, e.g. 01-04-2027]

Figures in the table come from the working file (formulas), with totals computed, not typed. Amounts use the Indian grouping (1,00,000). The rate shown in the example is illustrative — take the actual one from kb and quote its source.

Step 3 — review checklist

• Debits equal credits (a formula check in the working, not a glance)
• Correct period and voucher date
• Ledgers exist in the client's books and sit under the right group
• Amounts traced to the supporting working; the working traced to documents
• Narration is specific enough for an auditor: what, which period, which document
• Cost centre / branch coding is correct
• Treatment is consistent with last period's entry of the same type
• Reversal flag set where appropriate (accruals and provisions for bills that will be booked)
• GST and TDS consequences considered and flagged
• Within the authority of whoever will approve it
• Nothing unusual or out of pattern left without a note

Step 4 — output

Into <Client>/<FY>/Books/ (or next to the inputs), named with the client and period, e.g. JV_year-end-provisions_2027-03.xlsx:

1. The formatted entry (sheet Entries), one row per line, in the columns above.
2. The supporting calculations (sheet Working), with live formulas.
3. Comparison with last period's entry of the same type, where available.
4. Items flagged for review or follow-up (TDS not deducted, ledger to be created, missing document).
5. Posting instructions: manual entry in Tally (Gateway of Tally -> Vouchers -> F7 Journal), or the import layout the client's software accepts. The CA or accountant posts.

Credit

Workflow, entry types and checklist adapted from anthropics/knowledge-work-plugins (Apache-2.0). Changed by Fortax: Indian ledgers and groups, Companies Act/Income-tax depreciation, GST, TDS and payroll entries, rupee formatting, no connector placeholders.