Partnership

[Mike or Penny Novack]

Jason Dunham wrote:

>I am using GnuCash 2.2.9 for a partnership (co-ownership of real estate).
> For the most part, it is going fine, and I really like GC.
>
>Sometimes the partners have to kick in money (repairs, mortgage), and
>sometimes they get money back (rents, reimbursements).
>
>I am treating each partner as a customer, and trying to use invoicing and
>accounts receivable to track how much each partner owes.  I am currently
>using a separate accounts receivable sub-account for each partner.
>
>I can issue charges on an invoice and receive payments, and it shows up on
>the customer report, which is pretty nice, but it doesn't do everything.
>
>  
>
The place to start is with an "Accounting for Partnerships 101" sort of 
book. The problem I see with the way you are doing it is that a partner 
COULD also be a "customer" of the partnership. Same person but a 
different business relationship.

Normally with partnerships paying in is an increase in investment, 
paying out a withdrawal of investment (hopefully there were profits so 
the total investment went up) and this done via "drawing" accounts. And 
"reimbursements" would be neither (you could set up accounts for 
liabilities to partners -- in addition to putting in money as per the 
partnership agreement a partner might loan* the partnership money). But 
that's just from memory and keep in mind that I am not an accountant.

Michael D Novack, FLMI

* be careful -- you might need to be able to treat this as a loan for 
internal to the partnership accounting but to the outside world probably 
is not. The rest of the world isn't bound by the agreements between 
partners and courts will treat this as just "this partner made a greater 
investment" should things go south.