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<tt>Process your invoices received for the full amount of the invoice
(before the deduction for wire fees) into a "Undeposited Funds" asset
account. Then make a "bank deposit" by transfering the NET amount
(after the wire fees) from Undeposited Funds into your gnucash account
for the bank account. Split the transaction and show a debit to
undeposited funds for the full amount of invoice, a credit to an
expense account called "banking fees" or "wire fees" or whatever, and a
credit to the bank account for the balance. It'll look like this:<br>
<br>
In Accounts Receivable<br>
Date Description Account
Debit Credit<br>
01/01/05 I(nvoice) Customer 1<br>
Income
1000.00 <br>
Acccounts Rcvbl
1000.00<br>
01/05/05 P(ayment) Customer 1 <br>
Accounts Rcvbl
1000.00 <br>
Undeposited Funds
1000.00<br>
<br>
In Undeposited Funds<br>
<br>
01/05/05 Customer1 <br>
Undeposited Funds
1000.00<br>
Expenses:Wire Fees
25.00<br>
Bank account
975.00<br>
<br>
<br>
That way the Net amount goes into the bank account, you record an
expense for the wire transfer, you record your income at the amount
actually billed, and your A/R stay current. I hope the above layout is
reasonably clear. Select all and set "fixed width font" if its not.<br>
<br>
A<br>
</tt> <br>
Derek Atkins wrote:
<blockquote cite="midsjm8y4eb7is.fsf@dogbert.ihtfp.org" type="cite">
<pre wrap="">generally the way to handle it in gnucash is to process a payment in
the amount of the fee, but process it to an expense account instead of
your checking account. Note that you may need to go through an
intermediate "Asset" account in order to get the process payment
feature to accept your account choice.
-derek
"Michael D. Crawford" <a class="moz-txt-link-rfc2396E" href="mailto:crawford@goingware.com"><crawford@goingware.com></a> writes:
</pre>
<blockquote type="cite">
<pre wrap="">I am preparing to switch my business bookkeeping from QuickBooks 99 to
gnucash because I'm about to receive a check for my consulting fees that
for the first time ever won't be in U.S. dollars - I moved to Canada a
year ago, and now have clients in both countries. Up until now I have
done all my banking in the U.S., but soon I will also have an account at
a bank here in Truro, Nova Scotia under the local currency.
Maybe the latest version of QuickBooks supports multiple currencies but
my experience with Intuit's determination to nickle-and-dime me to death
makes me determined never to use another Intuit product, not even if
they were to offer me bug fixes for free. (Let that be a warning to all
software developers: if your user's first experience is bad enough, he
won't give your application a second chance.)
I have been using gnucash for my personal accounts for over a year and
have been very happy with it. I'm ready to take the plunge and use it
for all of my financial records. But I have an question about an
accounting problem I have never been able to solve in Quickbooks:
I often ask my clients to pay me by wire transfer. They usually agree,
but it is inconvenient for them because they have to go to the bank to
sign the wire order, and there is a fee that ranges from $25 to $35.
To encourage their enthusiasm, I always write on my invoices that they
can deduct the wire fee from the amount due. Most of the time the wires
arrive in my checking account with $25 to $35 less than the amount
recorded in QuickBooks' invoices. It's worth it to me to not have to
pay to FedEx my check to my bank in the US.
Each time I fill in QuickBooks' Recieve Payments dialog, the wire never
fully covers the invoices, with the amount QuickBooks thinks is past due
growing larger as my relationship with my client lasts longer. If I
receive a wire every two weeks, then the total past due amount for all
my clients grows by $600 each year. I estimate that QuickBooks now
thinks my clients have stiffed me for over two thousand dollars.
How do I account for my wire fees in gnucash?
I'm still a little puzzled by double-entry accounting, but I think it's
a good idea and that it's worth my while to fully understand it.
I expect there would be an account from which the wire fees would come,
and an account for each client's balance. When I generate an invoice,
my fee would be deducted from the client's account, and when they paid,
their wire would be credited to it. I would then deduct the wire fee
</pre>
<blockquote type="cite">
<pre wrap="">From my wire fee account and credit it to my client's account, so
their
</pre>
</blockquote>
<pre wrap="">invoice would be fully balanced.
What I don't understand is where the money in the wire fee account would
come from. It's that it's costing me real money that I pay by mailing
a check to my client. I handle it by earning a little less than what I
invoice. But I am paying a fee for a genuine service provided by my
client, and a valuable one too: sometimes my fees are for thousands of
dollars, and getting a wire saves me days of anxiety waiting by the mailbox.
I expect I'll have other questions, but I should be able to figure out
most of what I need to know on my own. I'm going to spend the rest of
my day working on my books and setting up gnucash.
As soon as I reconcile my outstanding bank statements in QuickBooks, I'm
going to start gnucash on January 1st of this year and enter all my
transactions since then by hand. I don't have so many that it's worth
trying to get an import to work right. It's probably better not too, I
expect there will be other errors I can fix with my fresh start.
Thanks for your help!
Michael D. Crawford
<a class="moz-txt-link-abbreviated" href="mailto:crawford@goingware.com">crawford@goingware.com</a>
Read "GoingWare's Bag of Programming Tricks" at:
<a class="moz-txt-link-freetext" href="http://www.goingware.com/tips/">http://www.goingware.com/tips/</a>
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</pre>
</blockquote>
<pre wrap=""><!---->
</pre>
</blockquote>
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