Creative accounting

[Ian Konen]

On Wed, Oct 2, 2013 at 4:39 AM, Henry Gomersall <heng at cantab.net> wrote:
> On 02/10/13 06:51, Kim C. Callis wrote:
>>
>> Now I need
>> to invoice the client (the same client that I am "paying" rent to) for my
>> billable items. Again, not a big deal, it becomes an AR entry. The issues
>> was how to take the Rent: Business and pass to the AR: Client so that it
>> would reduce the overall receivable so that is would be my billed time -
>> Rent: Business and that would reflect properly.
>
> Why can't you just use balance accounts receivable from accounts payable?
>
> Actually, there is an interesting question here that I've had in the past.
> If one raises an invoice, the only way it seems to clear that is through the
> payment dialogue (otherwise reminders persist). I noticed that the payment
> dialogue is rather restrictive in the ways in which invoices can be paid.
> Perhaps there should be ways in which debits from A/R can be tied to an
> invoice?


Yeah, this is a good point that I didn't really spell out in my
previous answer (although is sounds like Kim has some previous GC
experience and may already be familiar):  If you're using GnuCash to
generate invoices, the idea is to set up individual customers and let
the business functions track who owes what.  It is generally
recommended by the package author (Derek who might jump in if I say
this wrong...) that you NOT enter transactions directly to or from A/R
or A/P by hand, but you also shouldn't need to.  You should be able to
do what's needed through the invoice generation process and the
posting and payment dialogs, and this will correctly track your
customer (and vendor) payments and debts.  If you enter equivalent
transactions by hand, GnuCash won't know to apply them to the correct
customer and/or invoice.

Having said that, though, I think the payment dialog is not as
restrictive as you think:  when first called, it defaults to paying an
invoice in full (the number that starts in the "amount" field) but
that number is editable so you can enter a partial payment toward an
invoice.  Normally the "transfer" account would be an asset:bank
account...indicating the customer paid you money and you deposited the
cash/check etc. in your bank account, but the transfer account could
be also a liability account like liabilities:prepayment, indicating
that you owed the customer some money (like for rent) and are applying
that towards paying off the invoice.  If it wipes your debt and the
customer still owes you more, than you run the payment dialog again
when the customer pays you for the remainder.


>
> Henry
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-- 
Ian Konen
iankonen at gmail.com
www.linkedin.com/in/iankonen
978-821-6498