Money moving is the other half of the books. Recorded with a party and an account against it, a payment answers two questions instead of none.
A figure written down as "received 10,000" is almost useless a month later. Received from whom, against which bills, and into which account — those three facts are what make it possible to reconcile anything.
Recording payments with the party and the account attached keeps both sides true: the customer’s balance falls by exactly what they paid, and the account balance rises by exactly what arrived in it, which is what a bank statement can then be checked against.
From a customer, against their bills.
Cash in hand, or the account it reached.
To a supplier, or as an expense.
Party by party, account by account.
The money side of the business: what has been billed, what has been collected, what is still owed, and what the tax on all of it comes to. Party ledgers sit at the centre — every bill and every payment lands on somebody’s khata, and the balance there is the number you act on.
Most of this area runs on its own once bills are being raised: ledgers update as you bill, reminders go out on their due dates, and the GST reports are built from what is already recorded.
What a payment settles and where it sits.
It can settle specific bills, which is what keeps a party’s outstanding list exact rather than approximate.
Because that is what makes the balance checkable against a bank statement or a drawer count.
Yes — supplier payments and expenses leave from an account the same way.
An amount with no party and no account behind it cannot be reconciled with anything.
