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On Tue, 2006-03-14 at 07:43 -0600, Dale Alspach wrote:
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<FONT COLOR="#000000">I think there are several possibilities. A lot depends on how intertwined</FONT>
<FONT COLOR="#000000">your company and the company's arrangements are. If the companies are not</FONT>
<FONT COLOR="#000000">close to gether so that you are essentially running an accounting service</FONT>
<FONT COLOR="#000000">for the other company, I would keep a separate account tree for the other</FONT>
<FONT COLOR="#000000">company. Then I would set up a few accounts to deal with the exchanges</FONT>
<FONT COLOR="#000000">between the companies. You would need a receivables account (asset) so that</FONT>
<FONT COLOR="#000000">each time you pay for something on behalf of the other company it is not an</FONT>
<FONT COLOR="#000000">expense in your tree but goes to receivables. If you receive funds on</FONT>
<FONT COLOR="#000000">behalf the other company that should go into a liability account. At the</FONT>
<FONT COLOR="#000000">end of the month you would invoice for the difference.</FONT>
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I have at the moment everything in expenses/income accounts - but they are separated. This as for example the rent I have to make a split booking; $2500 for my company, the rest of the about $8000 a month goes to the other company. Stationery is shared - 50/50 splits in this case. Same for household related items and the like. Pretty straightforward there. Invoicing gets a little more complex as it's not just the difference; my company also takes a commission on trades. Trades that at the moment I do not enter into GnuCash (yet).<BR>
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It's getting more complex for example when making a purchase like a piece of furniture for the office:<BR>
- this is an expense for my company, should be booked as liability to the other company.<BR>
- it's an asset for the other company, and should be booked as such.<BR>
Currently I have two separate files for the two companies; otherwise I really don't understand it anymore. I'm not a book keeper really :) But it'd be nice if I can merge those files, including the trades, to make invoicing easier. Another thing I know GnuCash can do pretty well - but something I haven't gotten into yet.<BR>
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<FONT COLOR="#000000">If the companies are intertwined then you may want to adopt something</FONT>
<FONT COLOR="#000000">closer to the three or four people sharing a house scenario which has been</FONT>
<FONT COLOR="#000000">discussed on this list several times.</FONT>
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I'll look for those discussions - I don't think it's fully applicable as it's not that much intertwined. My company (just me) works as sales agent for the other company (no personnel there), I invoice commission on sales. For the rest we share the office.<BR>
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<FONT COLOR="#000000">You may want to consult an accountant as to the proper way to do this for</FONT>
<FONT COLOR="#000000">your countries laws, tax rules, etc.</FONT>
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Well in Hong Kong those rules are very simple. Cost is cost, even if it's entertainment (I know other companies happily put receipts from Mainland "massage" bars and the like on their expenses account). And the turnover is still under $0.5 mln so no need to have an audit in the first place. So I'm not worried about that :)<BR>
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Wouter.<BR>
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<FONT COLOR="#000000">Dale Alspach</FONT>
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