What's the best way to model "in-flight" transactions?

[Buddha Buck]

Remember that your books are supposed to reflect your view of the
transactions you are making, not those of other entities.

Instead of a credit card payment or an account-to-account transfer,
consider the more traditional case of paying a vendor with a check.

On January 1st, you buy a CD from a folk musician at a concert, and you
write them a check for $15.00. You put that into GnuCash as "Tanglefoot CD,
Db. Exp:Music $15, Cr. Ass:Bank $15 (check #1423)".

On January 15th, you check your balance online, and see that the check
cleared on the 10th. You go into GnuCash, pull up your register for
Ass:Bank, find the transaction for buying the CD, and tick the cleared
column so it shows a "c".

On January 28th, you get your bank statements, and reconcile it against
Ass:Bank, and change the "c" in the cleared column to an "r", for
reconciled.

As far as you were concerned, the transaction happened on the 1st; the fact
that the bank didn't register it until the 10th is "recorded" only in so
much as in the time frame between when the transaction was put into GnuCash
(on the 1st) and when it was noticed (on the 15th), the transaction was not
marked "cleared".

There is one slight complication: *transactions* are not marked as
"cleared" or "reconciled". The part of the transaction associated with a
particular account (what GnuCash calls a *split*) is "cleared" or
"reconciled". So it is possible, and in many cases common, for only parts
of a transaction to be reconciled. For instance, in the above example, it
makes no sense to reconcile the $15 cebit to Exp:Music. Reconciliation is a
comparison against someone else's record of the transaction, and there
isn't another record to reconcile against.

So to get back to your situation; Let's deal with a complicated credit card
payment setup I'll likely have to deal with tomorrow.

On Friday, Sep29, I get paid by my client, and I deposit the check into my
bank. That evening, I go online and I schedule an "immediate" payment to my
CC for $500. Because it is Friday night, the CC company doesn't process the
payment until Monday. It takes a day for the request to get processed by my
bank, and two more days for the payment to wend its way through the
clearinghouse systems to the CC company. At which point, the CC company
lists the transaction on my statement as happening on Friday, Sep29, but
before then, it didn't appear.

So how should this be modeled in GnuCash?

Sep29 Payment of Invoice #2345 by XYZCo, Db: Ass:Bank $1000, Cr:
Inc:Services $1000
Sep29 Pay Visa, Db: Lia:Visa $500, Cr: Ass:Bank $500

Then on Oct03, I notice that the bank has processed it, and mark the
Cr::Ass:Bank $500 as "cleared".
On Oct05, I notice that Visa has processed it, and mark the Db: Lia:Visa
$500 as "cleared".

I believe that GnuCash has modes for showing the "cleared" balances on
accounts, which is what you should really be looking at when comparing
statement (or online) balances with GnuCash balances.




On Thu, Sep 28, 2017 at 9:00 AM replicon <replicon at gmail.com> wrote:

> Hey all,
>
> I've been using/loving GNUCash for almost a year now, and one thing I'm
> sure
> I'm doing wrong is how I'm showing credit card payments.
>
> For paying credit card bills, I just use my bank's bill pay. The bank is
> different from the credit card provider, so there's some "in-flight" time
> for that money. The day the withdrawal shows up on my checking account is
> not the same as the day the payment shows up when I login to my credit card
> provider and check transactions there.
>
> Right now, in GNUCash, I just do a transaction from checking account to
> credit card, and by convention, always adjust the time to reflect checking
> account, but I wonder if there's a more correct way to do it.
>
> The best I can think of is to have a separate account for "in-flight"
> transactions between establishments, and turn the credit card payment into
> two transactions that go through this account. Is that the best way to do
> it? If so, what account type would that be? Would it be an asset, because
> in
> a way, it's like I'm loaning money to some imaginary entity for a while,
> which it will repay to my other account a day or two later? :)
>
> Thanks!
>
>
>
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