Understanding linked journals
What is a linked journal? A linked journal allows you to create a single journal entry that impacts both your Profit & Loss and Balance Sheet accounts simultaneously.
For example:
Accrued bonuses: Expense on P&L (Salary Expense) + Liability on Balance Sheet (Accrued Compensation)
Prepaid insurance: Asset on Balance Sheet (Prepaid Assets) + Expense reduction on P&L (Insurance Expense)
Depreciation: Expense on P&L (Depreciation Expense) + Asset reduction on Balance Sheet (Accumulated Depreciation)
Before you begin, make sure:
Ensure your Group Reporting Template (GRT) is configured as "Both" type (includes both P&L and Balance Sheet accounts) - Linked journals are only available with "Both" type GRTs
ℹ️Info: Linked journals require a "Both" type GRT. If you only have P&L or Balance Sheet GRTs, you won't see this functionality.
Step 1: Access linked journal creation
Navigate to your Complete Consolidation working papers
You can work from either the Profit & Loss or Balance Sheet tab
The linked journal feature works identically from both views
Click the green Add Journal button in the top right corner
Flexibility: Unlike other journal types, you can create linked journals from either the P&L or Balance Sheet tab - the system automatically handles both sides.
Step 2: Configure journal header information
Narration
Enter a clear, descriptive title for your linked journal
This appears across both P&L and Balance Sheet reports
Date
Select the appropriate date for this journal entry
Should align with your consolidation period
The system defaults to today's date
Ref No (Optional)
Add a reference number for tracking purposes
Useful for audit trails and internal documentation
Example: "LJ-2025-001" for Linked Journal
Tag
Select the appropriate classification from the dropdown:
Elimination: For removing intercompany items
Reclassification: For moving amounts between accounts
Accounting Adjustment: For corrections and GAAP adjustments
Other: For miscellaneous adjustments
Include Group Class (Optional)
Check this box if you need to assign the journal to a specific Group Class
Useful for segment reporting or subsidiary-specific adjustments
You can only select one Group Class per journal entry
Tag Reporting Cadence for Journal (Optional)
Enable this if the journal should be included in regular reporting cycles
Controls how often this journal appears in your reporting
Step 3: Set up your linked account structure
First Account Line - P&L Account:
Click "Select GRT account" dropdown
Choose your Profit & Loss account (Revenue or Expense)
Description:
Enter a clear description for this line
Amount Entry:
Enter the amount in either Debit or Credit column
Follow standard P&L account rules:
Expenses: Debit increases, Credit decreases
Revenue: Credit increases, Debit decreases
Second Account Line - Balance Sheet Account:
Click "Add Another Line" to create the second entry
Click "Select GRT account" dropdown for the new line
Choose your Balance Sheet account (Asset, Liability, or Equity)
Balance Sheet Amount:
Enter the balancing amount in the opposite column
Follow standard Balance Sheet account rules:
Assets: Debit increases, Credit decreases
Liabilities: Credit increases, Debit decreases
Equity: Credit increases, Debit decreases
Step 4: Add multiple lines (if needed)
For complex adjustments:
Click "Add Another Line" for additional accounts
You can include multiple P&L accounts, multiple Balance Sheet accounts, or both
Step 5: Add Notes
Notes (Optional but recommended)
Use the notes section for additional context
Include supporting calculations or documentation references
Maximum 500 characters available
Example: "Based on HR report dated 15/03/2025 - see supporting schedule"
Step 6: Review and create your journal
Final checks:
Verify all account selections are correct
Ensure Total debits equal Total credits
Confirm the Difference shows zero (balanced entry)
Review all descriptions for clarity
Create the journal:
Click the green Add button to create your linked journal
Click Cancel if you need to make changes
The system immediately applies the journal to both P&L and Balance Sheet
You'll return to the consolidation view with your adjustments visible
Confirming your success
After creating your linked journal, you should see:
In Profit & Loss view:
Your P&L accounts show the journal impact
Revenue/Expense accounts reflect the adjustments
Journal appears in the appropriate period column
In Balance Sheet view:
Your Balance Sheet accounts show the corresponding impact
Assets/Liabilities/Equity accounts reflect the adjustments
The same journal appears consistently
Balancing verification:
Total Assets still equal Total Liabilities + Equity
P&L impact flows through to Balance Sheet via retained earnings
Audit trail shows complete transaction history
Common questions
Q: I don't see the linked journal option - what's wrong?
A: Linked journals require a "Both" type GRT that includes both P&L and Balance Sheet accounts. Check your GRT configuration.
Q: My journal won't balance - what should I check?
A: Ensure your total debits equal total credits. The "Difference" field must show zero.
Q: Can I edit a linked journal after creation?
A: Yes, you can edit linked journals like other journal types. Changes will appear in both P&L and Balance Sheet views automatically.
Q: How do linked journals appear in reports?
A: Linked journals appear in both P&L and Balance Sheet reports, showing the
complete impact of your adjustment across both financial statements.
Q: Can I create linked journals with multiple P&L or Balance Sheet accounts?
A: Absolutely. Use "Add Another Line" to include multiple accounts on either side, allowing for complex multi-account adjustments.
What's next?
Once you've mastered linked journals:
Master Working Papers: Use linked journals in consolidation workflows
Advanced Reporting: Generate detailed reports showing linked journal impacts
Have questions or need assistance❓
Contact our support team at support@gather.nexus