Accounting Principles

Lynx contains literally hundreds of functions to help you run your propane business more efficiently and more profitably. While many of these functions are "accounting" in nature, every effort has been made to make them usable to the non-accountant whenever possible.

If you use Lynx for your Billing and Accounts Receivable only, there is no particular need to know anything at all about formal accounting. That is, you will not have to deal with debits or credits nor will you need to do journal entries. In fact, you probably have an outside accountant who takes care of this kind of thing. They might also do your taxes, depreciation schedules, governmental reporting, year-end processing and other accounting functions. This leaves you free to focus on running the office, dealing with customers, and getting the bills out.

If this describes how you use the system, the following information does NOT apply.

However, if you use Lynx for General Ledger, Accounts Payable, and/or Journal Entries, it's important that you understand the following principles and at least a minimum amount of accounting. Every effort was made to make the system non-technical but in some cases it's simply not possible to eliminate all accounting references.



1. The General Ledger accounting module is automatically available to you and does NOT have to be "turned on".  

2. The General Ledger is where the results of all your other processing eventually is kept.  It is organized by account number and a strict debit-credit balance is maintained.  When you "post" your accounts receivable, accounts payable, journal entries, or , this is where the data goes.  All of your financial reports (like the Income Statement or Balance Sheet) are produced from this file.

3. The first thing you need to do when you begin using the General Ledger module is to set up your Chart of Accounts.  A "typical propane company" Chart of Accounts is provided with the system but you will undoubtedly want to modify it to fit you particular needs.  Your owner(s) and/or accountants will undoubtedly play a key role in this.

4. You can use your existing account numbers if you wish but it is suggested that you use four digit numeric account numbers.

5. It is also suggested that your Chart of Account numbers are structured as follows. You can use any four digit account numbers you like but they should adhere to this format:

Account Number(s) Account
1000 through 1099 Bank Accounts
1100 Accounts Receivable
1101 through 1599 Assets
1600 through 1999 Inventory
2000 Accounts Payable
2001 through 2999 Liabilities
3000 through 3999 Owner's Equity
4000 through 4999 Sales
5000 thru 5999 Cost of Goods Sold
6000 thru 9999 Expenses


6. You will be asked to supply the appropriate account numbers to your products and some of your transactions. The system will usually help you with this by supplying selected lists of accounts to choose from. However, it's important to understand that the computer system can not distinguish between accounts that are "right" versus those that are "valid".  It can only insure that they are "valid". For an example of this, left-click here.



1. Before you can use the Accounts Payable accounting module, you first need to "turn it on". This is done from the Company Preferences window (left-click on "Company" on the Main Menu title bar). For help on this, go to Activate the Accounting Modules.

2. When you "post" an Accounts Payable (or Accounts Receivable) batch to the General Ledger, the system automatically creates the proper double entry accounting entries.



1. Journal Entries are actually a part of the General Ledger module. So, when you use the General Ledger, you automatically get the ability to do journal entries.  

2. Of all the parts of the Lynx system, doing journal entries probably requires more knowledge of accounting than any other. Journal entries provide you with a way to directly go into the General Ledger without going through Accounts Receivable or Accounts Payable. They are always entered as two part transactions (a debit and a credit) and they must balance. The vast majority of your financial transactions that reach your General Ledger will automatically be correctly formatted for you by the system. However, while there aren't very many, there are still some entries that must be done by Journal Entries (like once-a-year depreciation, for instance). If you use an outside accountant, they can undoubtedly help you with this.