Struggling with vendor payments

[Andrew Greig]

Bottom Posted

On Wed, 2005-08-03 at 22:25 -0700, Beth Leonard wrote:
in response to Andrew Greig: 
> Let's assume you need to pay $10.00 for parking.
> Example 1: You pay it from your business's Petty Cash account, and
>   there is no tax involved to keep track of.

Can't do it using Method 1 or 2 but 3 seems to fit my scenario


> Example 3: You pay for it from your business Petty Cash, and
>   need to track how much was for "Parking" and how much was
>   the associated taxes -- say 8% tax rate.  (I'll call it GST
>   in this example, but being from the US, I don't actually
>   know what that means.)

The tax is GST (Goods and Services Tax) at 10%


>   Open the Assets:Petty Cash account.  Enter the description.
>   Skip the transfer account for now.  In the Spend column
>   (also called Credit if you have accounting labels turned on) enter
>   10.00.  Now hit the split button on the toolbar.  It should
>   show Assets:Petty Cash on one line, next to the 10.00 spend (aka
>   credit).  In my setup, which I believe has default colors, it's
>   sortof a tan color.  Click on the tan blank line below it.
>   
> 
>   Enter "parking" in the memo (or leave blank).  The account is
>   Expenses:Auto:Parking.  The amount we need to calculate --
>   either you can read it from your receipt, or you can do
>   some math in gnucash.  We said the total charge was $10.00,
>   which included 8% tax on top of the real fee.  If X is
>   the base parking fee, 10.00 is 8% more than X, or 10.00 is
>   1.08 times X.  So X = 10.00/1.08.  Enter "10.00/1.08" without
>   the quotes in the receive/debit column (a 10.00 should be
>   pre-filled there for you.)  Gnucash does the math and comes
>   up with 9.26.
> 
>   Gnucash also does the subtraction for you and lets you know
>   that you still have .74 of the transaction un accounted for,
>   it creates a third line with the .74 pre-filled in the debit/receive
>   column.
> 
>   Give this third line a memo of "GST" if desired, enter the
>   transfer account Expenses:Taxes:GST, accept the default 0.74
>   (which is also 8% of 9.26) and you are done.  (If you wanted
>   to, you could have cleared the .74 and entered 9.26*.08
>   instead, or even 10.00 - 9.26)
>   
>   Whew!  Done.  It's not as complicated as I make it sound, but
>   trying to type out an explanation takes much longer than looking
>   over your shoulder and saying "move here, click there, Type!"

I followed this as best I could and screwed up , so I printed it out,
and followed it more closely, and achieved an excellent result. Now for
the other 54 items of Petty Cash.  It is very involved at first but
someone once said that "Repetition is the Mother of Skill", who knows
some understanding may come along as well.

Many thanks for your detailed assistance, I really appreciate it.  I was
tempted to head back to MYOB and Windows, but that would be inconsistent
with my mission statement

Given that the Fancy invoice is in HTML, wouldn't it be great to design
an invoice in OpenOffice.org and then be able to import it into gnucash.

But that is for another email ;)
Andrew Greig
Community Distributor, OpenOffice.org