how to account for payments from others to my vendors

[paul morgan]

Hi,

New to GnuCash and setting up a test account, derived from the very helpful
"GNU_Cash_for_Business_users_Howto_Guide"...I have a question which is maybe
more acctg than GCash, but, any help would be very much appreciated.

Often our clients pay vendors' bills directly, and I'm trying to determine
how to represent that in GnuCash. Example: we have a project with total
contract amount of $50,000, and for that project our vendors' bills total
40,000. Of that 40,000, our client might pay 15,000 directly, and it
wouldn't necessarily be known where payment would come from (our business or
our client) at the time vendors' bills are posted.

In short, as I understand it, the vendor's bill is a liability to our
company, but the funds which satisfy that liability come from another
source, and I would like to track those transactions. How can I account for
those payments? I thought to establish an account Current Assets:Client
Direct Payment Funds with sub-accounts "client A", "client B" etc,
sub-accounts which could, I guess, be used to properly "Process Payment",
but how do funds get into that account?

I hope my question is clear, thanks for taking the time to read.

Paul