how to account for payments from others to my vendors

[Derek Atkins]

Hi,

Quoting paul morgan <queries0 at gmail.com>:

> 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?

Via a process payment of a Customer Invoice.

In other words you would track it as if they paid you and you paid
the vendor, even if the funds never actually reach your own accounts.

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

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-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available