Bank account vs assets issue
Wouter van Marle
wouter at squirrel-systems.com
Tue Mar 14 10:05:57 EST 2006
On Tue, 2006-03-14 at 07:43 -0600, Dale Alspach wrote:
> I think there are several possibilities. A lot depends on how intertwined
> your company and the company's arrangements are. If the companies are not
> close to gether so that you are essentially running an accounting service
> for the other company, I would keep a separate account tree for the other
> company. Then I would set up a few accounts to deal with the exchanges
> between the companies. You would need a receivables account (asset) so that
> each time you pay for something on behalf of the other company it is not an
> expense in your tree but goes to receivables. If you receive funds on
> behalf the other company that should go into a liability account. At the
> end of the month you would invoice for the difference.
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).
It's getting more complex for example when making a purchase like a
piece of furniture for the office:
- this is an expense for my company, should be booked as liability to
the other company.
- it's an asset for the other company, and should be booked as such.
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.
> If the companies are intertwined then you may want to adopt something
> closer to the three or four people sharing a house scenario which has been
> discussed on this list several times.
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.
> You may want to consult an accountant as to the proper way to do this for
> your countries laws, tax rules, etc.
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 :)
> Dale Alspach
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