Invoice credit for wire transfer fees?

[Michael D. Crawford]

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 
from my wire fee account and credit it to my client's account, so their 
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
crawford at goingware.com

     Read "GoingWare's Bag of Programming Tricks" at:
              http://www.goingware.com/tips/