how do I record money I paied for someone?

Keith A. Milner kamilner at superlative.org
Sun Jan 27 07:46:13 EST 2008


On Sunday 27 January 2008 02:09:18 张韡武 wrote:
> Dear all
>
> I run small personal business. When I work for my customers I often have
> to pay for my hotel, travel and so like, with my own credit card, and
> from the hotels and travel agencies get the special receipts issued by
> tax office(called Faiao here), which later I give to my customer who
> pays me back. Sometimes my customer pays me back after several months,
> thus it's worth tracking with Gnu Cash.
>
> In this case, I think I am paying for someone else (my customer) and I
> get money back later. How do I record such transactions?

The way this normally works is that you (personally) are making payments on 
behalf of your own company. Your company owes you. Your company then 
recharges these expenses to the customer.

My suggestion is to use the "Employees/Expenses" business functions.

For instance:

Create  the following "Business" entities (from the "Business" submenus):

1. An "Employee" representing yourself.
2. A "Customer" for each of your customers (naturally)
3. A customer "Job" for each project you work on. You need at least one "job" 
for each customer you pass expenses on to
4. A bunch of expense accounts (e.g. Hotel, Meals, Travel, etc.)
5. An income account called something like "Recharged Expenses"

When you pay business expenses from your personal account for a 
project/customer create a new "expense voucher". Do these regularly (weekly 
or monthly) as required. You can put multiple expense items on each Voucher. 
They key is they must all be for the same project, or "job". If you work on 
multiple jobs over the week/month then you'll need to create a separate 
Voucher for each job.

When you create the voucher, set the "Default Chargeback Project" customer to 
the appropriate one, and then select the appropriate job.

When you fill in the expense form, simply select the appropriate expense 
account for the expense and make sure you put a cross in the "Billable?" 
column for the expenses you want to pass onto the customer. Normally you 
should select "Cash" as the payment type**. Note you can use this to record 
non rechargeable personal expenses you make on behalf of your business. Just 
leave the "billable?" box unchecked. In this way you can track how much your 
business owes you personally.

[** It is possible to register a liability account for a credit card and 
associate it with the employee. However, I believe it is incorrect to do this 
for your own personal credit card. Assuming you keep your business and your 
personal accounts separate, your credit card is your liability, not the 
businesses. This should only be used if you get a separate company credit 
card for business expenses.]

Once you've posted that (to Accounts Payable) the expenses side is completed. 
Gnucash will then track how much your business owes you.

Now, the customer side:

When you are ready to invoice the customer, create a new "Invoice", making 
sure you select the appropriate  customer and job in "Billing Information". 
When the ivoice comes up, it should list all of your rechargeable expenses. 
You can select the ones appropriate to the invoice by putting a check 
againsed the "Invoiced?" column, and setting the "Income Account" 
to "Recharged Expenses" (or whatever you called the income account).
You can then add any other charges to the end of the invoice before you "Post" 
the invoice. You can then print out the invoice and send it to the customer.

Gnucash will also track how much you are owed by the customer. If you check 
the Reports menu, "Business->Customer Report" will show you the invoicing and 
payment history and how much is owed.

I hope you can follow this, and that it helps.

regards,

-- 
Keith A. Milner


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