# Pay In/ Pay Out Transactions

***

### Create an Add Pay In / Pay Out Transaction

1. Go to **Accounting → Ledger.**
2. Click **New Transaction** in the top-right corner.
3. Choose **Pay In** or **Pay Out** based on the transaction type.
4. Enter transaction details:

<table><thead><tr><th width="172.1107177734375">Field</th><th width="357.267822265625">Description</th><th>Required/Optional</th></tr></thead><tbody><tr><td><strong>Party</strong></td><td>For <em>Pay In</em>, select the <strong>pay-from</strong> party; for <em>Pay Out</em>, select the <strong>pay-to</strong> party.</td><td>Required</td></tr><tr><td><strong>Reference Number</strong></td><td>Tracking or reference number for the transaction (e.g., invoice or receipt number).</td><td>Optional</td></tr><tr><td><strong>Date</strong></td><td>Choose the transaction date.</td><td>Required</td></tr><tr><td><strong>Memo</strong></td><td>Internal note for context or reference. </td><td>Optional</td></tr><tr><td><strong>Category</strong></td><td>Choose the correct ledger category.</td><td>Required</td></tr><tr><td><strong>Description</strong></td><td>Short description of the transaction.</td><td>Optional</td></tr><tr><td><strong>Amount</strong></td><td>Enter the amount. </td><td>Required</td></tr><tr><td><strong>Department</strong></td><td>Assign the transaction to a department, if applicable.</td><td>Optional</td></tr></tbody></table>

{% hint style="info" %}
**Tip:** Add extra lines for multi-split entries by clicking **+ Add Line** at the bottom.
{% endhint %}

5. When finished entering your details, you can choose how to save:
   * **Save & Close** — Save and return to the Ledger.
   * **Save** — Save and stay on the current entry.
   * **Save & New** — Save and immediately start another transaction.

***

### Recording Refunds or Reversals

Need to enter a refund, return, or adjustment?\
You can enter **negative amounts** in both *Pay In* and *Pay Out* transactions.

Common use cases include:

* Vendor or customer refunds
* Reversing incorrect entries
* Recording partial credits or bank fee adjustments

Digits automatically processes negative entries correctly for reporting and reconciliation.

***

### Need to record a journal entry instead?

If your entry affects multiple accounts or adjusting entries, use **Journal Entries** instead of Pay In/Pay Out. See: [journal-entries](https://help.digits.com/firms-agentic-general-ledger/journal-entries "mention")

***

### Frequently Asked Questions

<details>

<summary>Can I edit or delete a Pay In / Pay Out transaction later?</summary>

Yes. Open the transaction in the Ledger, make your changes, and click **Save**. You can also delete it from the dropdown menu.

</details>

<details>

<summary>What’s the difference between Pay In, Pay Out, Journal, and Transfer?</summary>

* **Pay In:** Incoming cash or income transactions.
* **Pay Out:** Outgoing payments or expenses.
* **Journal:** Adjusting or non-cash entries between accounts.
* **Transfer:** Moves money between connected accounts (e.g., checking → savings).

</details>

<details>

<summary>Will Pay In and Pay Out affect reconciliations?</summary>

Yes. These transactions are included in reconciliation workflows; ensure the categories and dates are accurate.

</details>

<details>

<summary>Can I add a transaction from a party or category page?</summary>

Yes! You can add a new transaction directly from any party page (vendor or customer) or category detail page — no need to navigate back to the Ledger. Just click **+ Add Transaction** from the page you're on.

</details>

***

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***


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