Invoice credit for wire transfer fees?
Andrew Sackville-West
andrew at farwestbilliards.com
Wed Mar 23 13:34:41 EST 2005
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:
In Accounts Receivable
Date Description Account
Debit Credit
01/01/05 I(nvoice) Customer 1
Income
1000.00
Acccounts Rcvbl
1000.00
01/05/05 P(ayment) Customer 1
Accounts Rcvbl 1000.00
Undeposited Funds
1000.00
In Undeposited Funds
01/05/05 Customer1
Undeposited Funds 1000.00
Expenses:Wire Fees
25.00
Bank account
975.00
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.
A
Derek Atkins wrote:
>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" <crawford at goingware.com> writes:
>
>
>
>>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/
>>_______________________________________________
>>gnucash-user mailing list
>>gnucash-user at gnucash.org
>>https://lists.gnucash.org/mailman/listinfo/gnucash-user
>>
>>
>>
>>
>
>
>
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