Skip to main content

26.4 PCN Account Mapping for Common SME Transactions

Introduction to Transaction Mapping​

Mapping business transactions to PCN accounts is a fundamental accounting skill. Every transaction affects at least two accounts (double-entry bookkeeping), and each account must be classified according to PCN standards.

Purchase Transactions​

Purchasing Inventory (Goods for Resale)​

Transaction: Purchase €500 of inventory on credit from a supplier

PCN Mapping:

  • Debit: Account 601 (Purchases of goods) - €500
  • Credit: Account 401 (Suppliers) - €500

With VAT (17%):

  • Debit: Account 601 (Purchases) - €427.35
  • Debit: Account 44551 (Input VAT recoverable) - €72.65
  • Credit: Account 401 (Suppliers) - €500.00

Purchasing Fixed Assets​

Transaction: Purchase €5,000 equipment, paid by bank transfer

PCN Mapping:

  • Debit: Account 218 (Machinery and equipment) - €5,000
  • Credit: Account 512 (Bank account) - €5,000

With VAT:

  • Debit: Account 218 (Equipment) - €4,273.50
  • Debit: Account 44551 (Input VAT) - €726.50
  • Credit: Account 512 (Bank) - €5,000.00

Sales Transactions​

Cash Sales​

Transaction: Sell €200 of goods for cash (VAT 17%)

PCN Mapping:

  • Debit: Account 530 (Cash) - €234.00
  • Credit: Account 701 (Sales of goods) - €170.94
  • Credit: Account 44581 (VAT on sales) - €29.06

Credit Sales​

Transaction: Sell €1,000 of services on credit (VAT 17%)

PCN Mapping:

  • Debit: Account 411 (Customers) - €1,170.00
  • Credit: Account 706 (Services rendered) - €854.70
  • Credit: Account 44581 (VAT on sales) - €145.30

Payment Transactions​

Paying Suppliers​

Transaction: Pay €800 to supplier (including €136 VAT)

PCN Mapping:

  • Debit: Account 401 (Suppliers) - €800.00
  • Credit: Account 512 (Bank account) - €800.00

Receiving Customer Payments​

Transaction: Receive €1,170 from customer (payment for invoice)

PCN Mapping:

  • Debit: Account 512 (Bank account) - €1,170.00
  • Credit: Account 411 (Customers) - €1,170.00

Payroll Transactions​

Paying Salaries​

Transaction: Pay €3,000 gross salary (employee portion: €600 social charges, employer portion: €900)

PCN Mapping:

  • Debit: Account 621 (Salaries) - €3,000.00
  • Debit: Account 641 (Social charges - employer) - €900.00
  • Credit: Account 431 (Social charges payable) - €1,500.00
  • Credit: Account 512 (Bank account) - €2,400.00

Expense Transactions​

Paying Rent​

Transaction: Pay €1,200 monthly rent

PCN Mapping:

  • Debit: Account 641 (Rent) - €1,200.00
  • Credit: Account 512 (Bank account) - €1,200.00

Paying Utilities​

Transaction: Pay €150 electricity bill (VAT 17%)

PCN Mapping:

  • Debit: Account 613 (Electricity) - €128.21
  • Debit: Account 44551 (Input VAT) - €21.79
  • Credit: Account 512 (Bank account) - €150.00

Depreciation Transactions​

Recording Depreciation​

Transaction: Record €200 monthly depreciation on equipment

PCN Mapping:

  • Debit: Account 671 (Depreciation of fixed assets) - €200.00
  • Credit: Account 281 (Accumulated depreciation - equipment) - €200.00

VAT Transactions​

VAT Return Filing​

Transaction: File VAT return (VAT collected: €1,000, VAT paid: €600, net payable: €400)

PCN Mapping:

  • Debit: Account 44551 (Input VAT recoverable) - €600.00
  • Credit: Account 44581 (VAT on sales) - €1,000.00
  • Debit: Account 44571 (VAT payable) - €400.00

When paying VAT:

  • Debit: Account 44571 (VAT payable) - €400.00
  • Credit: Account 512 (Bank account) - €400.00

Common Transaction Mapping Table​

Transaction TypeDebit AccountCredit AccountNotes
Purchase inventory (cash)601 (Purchases)512 (Bank)Add 44551 for VAT
Purchase inventory (credit)601 (Purchases)401 (Suppliers)Add 44551 for VAT
Cash sale530 (Cash)701 (Sales)Add 44581 for VAT
Credit sale411 (Customers)701 (Sales)Add 44581 for VAT
Pay supplier401 (Suppliers)512 (Bank)
Receive payment512 (Bank)411 (Customers)
Pay salary621 (Salaries)512 (Bank)Include 431 for social charges
Pay rent641 (Rent)512 (Bank)
Record depreciation671 (Depreciation)281 (Accum. Depreciation)
Pay VAT44571 (VAT payable)512 (Bank)

Luxembourg Compliance Note​

All transactions must be mapped to PCN accounts. When using accounting software, ensure it's configured with PCN 2020 account structure. Manual journal entries should always reference PCN account numbers, not just account names.

Think It Through​

Marie's restaurant receives a €500 invoice for kitchen equipment maintenance. The invoice includes €85 VAT (17%). How would you map this transaction to PCN accounts? What if she pays immediately vs. on credit terms?

Concepts in Practice​

Restaurant Daily Operations

Le Petit Bistro processes these transactions daily:

  1. Morning: Purchase €200 food inventory (cash, VAT 17%)

    • Debit 601, Debit 44551, Credit 530

  2. Lunch Service: €500 cash sales (VAT 17%)

    • Debit 530, Credit 701, Credit 44581

  3. Afternoon: Pay €150 utility bill (VAT 17%)

    • Debit 613, Debit 44551, Credit 512

  4. End of Day: Record €50 depreciation on equipment

    • Debit 671, Credit 281

All transactions are properly mapped to PCN accounts, ensuring compliance and accurate reporting.